Mira Syahida explains the difference between a hire purchase transaction and credit sale transaction
Credit sale in general is defined as purchases made by a consumer that do not require a payment made in full at the time of purchase.
In Malaysia, credit sale is governed under Consumer Protection (Credit Sale) Regulations 2012 which came into operation on 1st October 2012. These Regulations apply to all types of businesses that are required to be registered under any laws relating to the registration of companies or businesses except co-operative societies registered under the Co-operative Societies Act 1993. The most common credit sale in Malaysia involves the purchase of home appliances, furniture and electrical items with seller or credit facility provider such as Courts, Singer and AEON.
According to the Regulations, the term “credit sale” means the sale of goods where –
(a) credit facilities are provided by the seller or the credit facility provider to the purchaser in the sale transactions of such goods;
(b) the purchaser is a consumer;
(c) the goods involved in the credit sales are as interpreted in the Act;
(d) the credit payment involves payment by installment;
but does not include sales where full payment is made via credit card.