Citizens Advice unveils the murky world of logbook loans

[Michael Browne]

Action needed on the shady lenders who can take your car

 

Aggressive behaviour, sexual harassment and death threats are just some of the brutish tactics logbook lenders used to intimidate customers, reveals new evidence from Citizens Advice.

 

The charity exposes the murky world of logbook loans as it finds borrowers face high interest rates, ridiculous charging structures and bamboozling language. Citizens Advice analysed 261 client cases about logbook loans which were reported between February 2011 and January 2014. New voluntary practices for the industry were introduced in 2011 but Citizens Advice evidence suggests this code of conduct is being flouted.

 

One in five people had had their car repossessed despite not being the original borrower. As it stands, cars sold with a logbook loan against them can be repossessed by the lender even though the new owner did not take out the loan. The car had been sold with the loan still attached to it and the new owner was completely unaware as the loans don’t have to be registered.

 

Citizens Advice wants this practice to be reversed and is calling on the Financial Conduct Authority and Government to require lenders to get a court order before they can take away someone’s car and to stop repossessions of cars that have been sold on with loans.

 

Logbook loans, or ‘bills of sale’ as they are known officially, are often taken out by people who find it difficult to get credit elsewhere as they’re able to secure the loan against their car. If the borrower struggles to keep up with repayments the car is taken away without any official process.

 

 

http://www.citizensadvice.org.uk/press_20140217

[citizenB]

I agree there should be some way of recording that a car has a LBL on it. Perhaps the same way that a charging order is placed on a property !

 

It must be very distressing for someone to have purchased a vehicle in good faith to find that the previous owner had a loan which was unpaid and lose both the car and their money !!

[advisee]

So are we saying that these 'logbook loans' don't show up when doing a HPI check?

 

If so, surely that would be the first thing to try to get changed?

[Caveat_Emptor]

Am I missing something here? Do some people really buy a car without a registration document (or whatever the log book is called now)? A fool and his money etc...

[dx100uk]

LBL are nothing to do with V5C when selling

 

the seller still has all the docs etc

 

just that is has a loan attached to it by a bill of sale

 

its worthy to note that a good proportion of 'bill of sale' documents

are unregistered and are not worth the paper they are written on.

 

a car with a BOS CANNOT be repo'd from PRIVATE LAND without a COURT ORDER

 

no matter if / if not 1/3rd has been paid

 

dx

[Caveat_Emptor]

LBL are nothing to do with V5C when selling

 

the seller still has all the docs etc

 

just that is has a loan attached to it by a bill of sale

 

its worthy to note that a good proportion of 'bill of sale' documents

are unregistered and are not worth the paper they are written on.

 

a car with a BOS CANNOT be repo'd from PRIVATE LAND without a COURT ORDER

 

no matter if / if not 1/3rd has been paid

 

dx

 

Thanks for putting me straight; I had assumed the log book was handed over as surety. So there is no enquiry an intending car buyer can make that would reveal the LBL's existence. I see the problem! Presumably the police would say this is a civil matter.