The Legal Issues in the Hire-Purchase Business Regarding the Issuance of the Contracts Committee’s Notification Prescribing Car and Motorcycle Hire-Purchase as a Contract-Controlled Business 2022

Abstract

Hire purchase is a pivotal transaction in Thailand’s economy and has been subject to regulatory oversight since 2000. The control of hire purchase agreements, particularly those involving automobiles and motorcycles, falls under the authority of the Office of the Consumer Protection Board, pursuant to Section 35 bis of the Consumer Protection Act B.E. 2522 (1979). This regulation classifies hire purchase businesses as subject to contract regulation. The most recent amendment, enacted in 2022, addresses key issues, particularly the financial burdens on hirers, by limiting the rights of businesses to impose excessive fees. This is in response to the growing issue of non-performing car loans, exacerbated by the COVID-19 pandemic. This thesis aims to explore legal reforms in Thailand’s contract law to enhance financial protection for consumers, while ensuring minimal disruption to business operations. Excessive regulation can lead to increased operational costs, which are ultimately borne by consumers. To address these concerns, a review and revision of the Notification of the Contract Committee on the Regulation of Automobile and Motorcycle Hire Purchase Business B.E. 2565 (2022) is proposed, with a focus on (1) increasing financial literacy among hirers of potential post-contract costs, (2) revising limitations on claims for outstanding debt following auction sales, and (3) eliminating regulations that unnecessarily inflate business costs, allowing cost adjustments through natural market mechanisms.