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Help! Finance company have revoked finance on new car after my taking delivery :(

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Hi - I have been reading your thread with great interest - I too have come up against the very same problem :( . My mother took out car finance for me through Mercedes Benz Finance - from the get go I made it crystal clear that I had an adverse credit history and as such I would require my mother to take the finance out for me. I was unaware this was frowned upon and the dealership certainly did not make me aware.

 

They processed the finance in my mothers name (without her being there or with her express permission to cary out a credit check (she had given it to me) and the finance was agreed after a hard search on her credit profile. They inputted all my mothers details and bank details, after the finance was agreed but prior to my mother signing the financial agreement they switched her bank details to mine. I had asked at the beginning if it would be ok for the direct debit to be taken from my bank account and if the vehicle could be registered in my name etc and they told me this was ompletely fine so after the finance was accepted by Mercedes Finance online but before my mother signed the paperwork the dealer changed the bank details from my mothers to mine. At the time I did not think much of this as it all seemed above board and just normal practice.

 

This was almost one week ago, my mother signed the paperwork last Saturday and they registered, taxed and insured the car in my name. Yesterday morning I took delivery of the vehicle (collected from the forecourt) and everything seemed fine, until.... Last night we had a call from the dealer to say the finance company had revoked the finance agreement. They said they had revoked the deal as my name was on the direct debits and as registered keeper - it seems they credit checked me, although I am usure of this.

 

The dealer said that the car must be returned as there is no finance on it. I have refused as my mother has a credit agreement in place which she has not breached. I have spoken to a solicitor, police and citizens advice and have had conflicting reports.

 

The more I think about it the more I am drawn to conclude that it is the dealership that is at fault due to the 'tampering' of the paperwork after approval but before signing. Myself and my mother were completely upfont about what we wanted and asked advice from the dealership and the advice we were given it seems is completely incorrect.

 

The dealership since then have made a few calls back and forth the last of which was from teh dealer to my mother basically saying she committed fraud and that in her line of work she could get into trouble so best she gets me to return the car.

 

I have told the dealership I do not intend on returning the car I do intend on keeping up with payments however so I suggested they organise some other form of finance. Thy are coming back to me tomorrow.

 

Have you gotten any further forward with your problem - if there is anyone here that can help it would be MUCH appreciated!

 

Thanks

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This is reposted from another thread - thought it might get more reply's here - any help is greatly appreciated I am at a loss :(

 

Hi - I have been reading your thread with great interest - I too have come up against the very same problem . My mother took out car finance for me through Mercedes Benz Finance - from the get go I made it crystal clear that I had an adverse credit history and as such I would require my mother to take the finance out for me. I was unaware this was frowned upon and the dealership certainly did not make me aware.

 

They processed the finance in my mothers name (without her being there or with her express permission to cary out a credit check (she had given it to me) and the finance was agreed after a hard search on her credit profile. They inputted all my mothers details and bank details, after the finance was agreed but prior to my mother signing the financial agreement they switched her bank details to mine. I had asked at the beginning if it would be ok for the direct debit to be taken from my bank account and if the vehicle could be registered in my name etc and they told me this was ompletely fine so after the finance was accepted by Mercedes Finance online but before my mother signed the paperwork the dealer changed the bank details from my mothers to mine. At the time I did not think much of this as it all seemed above board and just normal practice.

 

This was almost one week ago, my mother signed the paperwork last Saturday and they registered, taxed and insured the car in my name. Yesterday morning I took delivery of the vehicle (collected from the forecourt) and everything seemed fine, until.... Last night we had a call from the dealer to say the finance company had revoked the finance agreement. They said they had revoked the deal as my name was on the direct debits and as registered keeper - it seems they credit checked me, although I am usure of this.

 

The dealer said that the car must be returned as there is no finance on it. I have refused as my mother has a credit agreement in place which she has not breached. I have spoken to a solicitor, police and citizens advice and have had conflicting reports.

 

The more I think about it the more I am drawn to conclude that it is the dealership that is at fault due to the 'tampering' of the paperwork after approval but before signing. Myself and my mother were completely upfont about what we wanted and asked advice from the dealership and the advice we were given it seems is completely incorrect.

 

The dealership since then have made a few calls back and forth the last of which was from teh dealer to my mother basically saying she committed fraud and that in her line of work she could get into trouble so best she gets me to return the car.

 

I have told the dealership I do not intend on returning the car I do intend on keeping up with payments however so I suggested they organise some other form of finance. Thy are coming back to me tomorrow.

 

Have you gotten any further forward with your problem - if there is anyone here that can help it would be MUCH appreciated!

 

Thanks

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"I have refused as my mother has a credit agreement in place which she has not breached" By giving you the car she has breached the terms of her credit agreement. All hire purchase/pcp/car finance agreements have a clause stateing that the finance company's customer is legally responsible for the vehicle they must not allow anyone other than those named on the agreement access to use the vehicle and must not transfer the vehicle to anyone else. This is why the finance company have not paid out for the vehicle and why the garage want the car back. It has now not been paid for.

 

By 'fronting' the agreement your mother has committed fraud. Unless you can get finance yourself on the car you will have to give it back as it has not been paid for.

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Same reply to the one i posted in the other thread:

 

"I have refused as my mother has a credit agreement in place which she has not breached" By giving you the car she has breached the terms of her credit agreement. All hire purchase/pcp/car finance agreements have a clause stateing that the finance company's customer is legally responsible for the vehicle they must not allow anyone other than those named on the agreement access to use the vehicle and must not transfer the vehicle to anyone else. This is why the finance company have not paid out for the vehicle and why the garage want the car back. It has now not been paid for.

 

By 'fronting' the agreement your mother has committed fraud. Unless you can get finance yourself on the car you will have to give it back as it has not been paid for.

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Thank you for your reply.

 

My mother did not give me the car, we asked the advice of the dealership and followed it to the letter. The dealership registered the car in my name, told me it was inconsequential that the direct debit payments were coming out of my account and that it was all above board.

 

From what I posted earlier I do not see how you came to the conclusion that my mother committed fraud?

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It is considered fraud as you were unable to get the finance yourself, it was assumed no one would allow you to buy the car so your mother has put her name on the agreement so you could get the car. Essentially you have decieved the finance company into financing you, something they didn't want to do. This can result in having fraud markers on your mother's credit file and being entered onto a fraud register.

 

Fortunately it was spooted so early on by the finance company. Discovery of this further down the line could have resulted in termination of the agreement, repossession of the car and an outstanding balance to pay.

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A fraud is an intentional deception made for personal gain or to damage another individual - as my mother and myself entered into this agreement without knowing it was termed 'fronting' then no fraud was committed - there was no intention to deceive.

 

Also this is not the view of Citizens Advice and a Solicitor. So 'essentially' you are wrong.

 

Yes my mother put her name on the financial agreement thus she is responsible for the upkeep of payments for the vehicle - irrespective of the fact the direct debit for the monthly payments are coming from my account she is liable for the upkeep of the agreement.

 

As it stands I am still in possession of the vehicle, we feel the dealership have committed fraud and as such we do not intend on returning the vehicle until our solicitor has read through my mothers financial agreement and related paperwork to see where we stand.

 

I merely came to this website to find out if anyone else had any knowledge of dealerships behaving in this way and or finance companies and what I can do to help my situation i.e. keep the car.

 

Regards

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I work for a finance company so have knowledge of your situation. By having your mother put the finance in her name so you could have a car that a finance company wouldn't let you is deceiving them. They wouldn't have financed you so you have got someone else to take out the finance so you could get the car. In doing so you have deceived the finance company for personal gain. Fraud.

 

Regardless of where the direct debit payments are coming from, your mother would have been the finance company's customer and, as per their terms and conditions, would have had to held possession of the vehicle. The only way you can keep the car is if you can find a finance company/personal loan to pay for it otherwise you will need to hand it back as it has not been paid for.

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You are mistaken, the definition of fraud is to intentionally deceive - there was no intention there.

 

I suggest you look this up and educate yourself - I find your comments rather offensive. Neither I nor my mother deceived nor committed fraud.

 

And can I ask, do you work for Mercedes Benz Finance? I only ask as you mention 'as per their terms and conditions' I take it you must work for them to know the in's and outs of their agreements or is it a pastime of yours to troll through car financing companies terms of business?

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I do not work for them. All vehicle finance contracts have the same clause in their terms and conditions stating the customer must have sole responsibilty for the vehicle and must not transfer it to a third party.

 

I'm sorry you find my comments offensive. As stated I work in the industry and just explaining why the deal has not been paid for. Dozen's of cars are repossessed annually by my company for this reason. Below is a link to an article on the Financial & Leasing Assocciation explaining why 'fronting' is considered fraud

 

http://www.fla.org.uk/media/081210_Q3_motor_fraud_stats

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My mother did not transfer it to another party - the dealer did this.

 

I have already read that article and it relates to people committing fraud - something which with have already ascertained we did not commit. Or would you disagree? If you do agree then who is at fault? The dealer I presume, so with your experience in the finance industry, have you come across the dealer being the one committing the fraud and if so what was the outcome?

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In circumstances similar to yours what has happened is the car gets returned as it hasn't been financed. Normally, as the finance company spotted this before payout, no further action is taken as the garage has the car back and the finance company lost no money. The only person who would seem to lose out is you who would have to hand back the car and start again. Unless, of course you can find another company to finance the car.

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You mentioned no further action would be taken, I presume you are referring to action against the car dealer? I have spoken to a solicitor regarding taking action against the dealer for committing fraud with my mothers details. Have you ever come across this?

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No as that would be a matter between yourselves and the dealership, hopefully someone with some knowledge on that will pop along and offer advice. I'm afraid I can only comment on how the finance company would act and you taking legal action the dealer should have no impact on the finance company.

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That is good to know - so as it stands my keeping the vehicle has no impact on the finance company, thus I am sure they have no interest in the fact I have the car as they have bowed out. The matter as you stated is between the dealership and my mother/me.

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Yep, they never paid for it so will not be bothered what happens.

 

All the best in trying to keep the car.

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You are mistaken, the definition of fraud is to intentionally deceive - there was no intention there.

 

I suggest you look this up and educate yourself - I find your comments rather offensive. Neither I nor my mother deceived nor committed fraud.

 

 

 

Why did you get you mother to put her name down then?

 

There was clearly intent to make the finance company believe she was taking out the agreement and not you as you would not have got credit.

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Well the way I see it is that you were intending to defraud someone by saying it was your mother who was buying the car and therefore getting credit in her name, even if the dealership were the ones to change the name bank account etc you were complicit in this. I agree its a problem getting finance when you have a bad credit rating but there are companies that specialise in obtaining car finance for people who would struggle. I can see where you were coming from with this but its still wrong.


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I wish people would stop using the "fraud" and "defraud" terms against the OP. As I see it, neither he nor his mother have committed nor coluded to "fraud". At best they can be accused of mis-understanding how this type of finance could/should work. It is deemed fraudulent only because the car finance industry has decided it to be so and such financing is regularly used in other industries.

 

The only person who has knowingly mis-informed a 3rd party of what or how they intended this finance to work was the dealer. If the dealer tells the customer that this method is ok and he's done it like this loads of times, then I see no reason for the customer to dis-believe them. In other areas of finance it is regularly done with the exception that the finance company (or perhaps bank) are involved in the planning. When it is done like this correctly his mother would have been called the "guarantor".

 

Guarantors are often used, for example, when someone needs a bank loan that they are unlikely to qualify for in their own right, or perhaps a house rental where the renter fails a credit check (maybe they are too young to have a full credit history) so a parent acts as guarantor for the rent. All perfectly legal and used on a regular basis.

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With many married couples, one person is responsible for the finance and the vehicle is registered and insured with the other. Is this fraud? Where on the finance document does it state that the vehicle cannot be registered in the name of any one else other than the person being financed?

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Why did you get you mother to put her name down then?

 

There was clearly intent to make the finance company believe she was taking out the agreement and not you as you would not have got credit.

 

The dealership told us this would be no problem - it would in fact be like a guarantor. We were miss informed we had no intention to deceive. I thought that would have been plainly obvious from previous comments? Any your response is in no way helpful to the initial plight.

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I wish people would stop using the "fraud" and "defraud" terms against the OP. As I see it, neither he nor his mother have committed nor coluded to "fraud". At best they can be accused of mis-understanding how this type of finance could/should work. It is deemed fraudulent only because the car finance industry has decided it to be so and such financing is regularly used in other industries.

 

The only person who has knowingly mis-informed a 3rd party of what or how they intended this finance to work was the dealer. If the dealer tells the customer that this method is ok and he's done it like this loads of times, then I see no reason for the customer to dis-believe them. In other areas of finance it is regularly done with the exception that the finance company (or perhaps bank) are involved in the planning. When it is done like this correctly his mother would have been called the "guarantor".

 

Guarantors are often used, for example, when someone needs a bank loan that they are unlikely to qualify for in their own right, or perhaps a house rental where the renter fails a credit check (maybe they are too young to have a full credit history) so a parent acts as guarantor for the rent. All perfectly legal and used on a regular basis.

 

Thank you for your understanding, we wanted to find out if anyone knew where we stand in this instance? The dealership have called my mum telling her she has committed fraud and might loose her job etc with the intent to scare her into returning the car. She does not have the car I do as I refuse to return it until all avenues are exhausted, I really feel they have acted fraudulently and misinformed us. It is very stressful - I really do not want to give the car back - I am happy to pay for it as agreed.

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From where I'm sitting, the dealer is very much at fault here - if the OP and her mother made their situation clear to them, they should have refused to attempt to get finance in this manner. I agree that guarantors are a common enough occurrence, but this was not a guarantor arrangement - and the fact that the garage allowed the OP to provide her mother's details without her being present is really quite alarming, especially for a high value purchase like a car.

 

That being said, the car is currently not paid for and I'm not sure that the OP has any choice but to return it and look for alternative finance, preferably at a different dealership. I'm pretty certain that until payment is made, the car would remain the property of the garage.


"Then they came for me--and there was no one left to speak for me". Martin Niemöller

 

"A vital ingredient of success is not knowing that what you're attempting can't be done. A person ignorant of the possibility of failure can be a half-brick in the path of the bicycle of history". - Terry Pratchett

 

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Could the OP and his guarantor approach the finance company?.

If it were explained there was no intent to deceive, and the dealership suggested the arrangement ; could the original finance company not reprocess the finance, with the OP named on the agreement but with the mother as guarantor?.

 

Dealership gets their money, finance company not disadvantaged, OP and their mother no worse off than under the first arrangement?

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Thank you for your understanding, we wanted to find out if anyone knew where we stand in this instance? The dealership have called my mum telling her she has committed fraud and might loose her job etc with the intent to scare her into returning the car. She does not have the car I do as I refuse to return it until all avenues are exhausted, I really feel they have acted fraudulently and misinformed us. It is very stressful - I really do not want to give the car back - I am happy to pay for it as agreed.

 

 

You have posted on a public forum so should expect a range of views and opinion.

 

Incidently, I don't buy the story that you thought this was like a "guarantor". It isn't and you know it, you and your mother (with the help of the dealer) tried to fool the finance company into thinking she was taking the finance out, not you. If it was a guarantor agreement, the finance would be in YOUR name, not your mothers.

 

Anyway, back on topic you have not paid for the car so you cannot keep it. Not hard really is it?!

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