The Car Finance Company. terminating HP agreement but wanting payments

[alandun]

Hi everyone. just a quick question.

 

i defaulted payments in march this year.

They claimed to me that they Terminated the Hire Purchase agreement in May 17.

since then i have had calls and emails to contact them regarding payment.

 

This morning a letter arrived of NOTICE OF SUMS OF ARREARS.

from what i can gather from google this is sent out because the hire purchase agreement is still active.

 

They have not sent any debt recovery letters but just always send letters under the HP agreement.

 

Is it right they are still sending letters out when the HP agreement is terminated??

 

Many Thanks

[dx100uk]

which they can.

so whos got the car?

[alandun]

It went into a garage for repairs which the garage previously messed up. I went on holiday and he sent a false invoice to them and they cleared the HPI and allowed him to sell it.

[dx100uk]

oppss

 

how far were you in to the agreement

[alandun]

Short of halfway on term and short on halfway on payments.

The police wanted them to make a complaint of fraud but they have refused to make the complaint.

 

I just didn’t get the termination letter and have been in contact with them since April and have never mentioned it to me.

 

they still want me to make monthly Payments as if the HP agreement still stood

and getting the letters of sums of arrears

and asking me to pay but there has been nothing of any debt recovery or that.

[dx100uk]

you'd paid more than 1/3rd it was protected goods.

 

they didn't have a court order.

[alandun]

What does that mean? They have done it wrong and I have a claim? Or I am stuffed and liable for the payments ?

[dx100uk]

This article explains well--

.

- Motor finance is an area which often requires an additional consideration when contemplating debt recovery action,

because the relevant credit agreement may be a hire-purchase or conditional sale agreement.

.

In these cases, where the debtor (or hirer) has paid over one third of the total amount payable,

the vehicle is provided with the special status of ‘protected goods’ under section 90 of the Act.

.

This means that it cannot be taken from the debtor without either a court order or his consent.

.

If a vehicle is taken in the absence of either of these,

then it could become an expensive and time-consuming exercise for the lender that entirely defeats

the purpose of seeking to recover the asset in the first place.

.

This is because section 91 provides that where section 90 is breached,

the debtor is released from all liability under the agreement,

but he retains a right to recover damages equal to all payments made.

.

These payments may even include the value of a part exchange vehicle.

.

The first issue to be addressed

– in common with all credit agreements

– is that of bringing the contract to an end through default and termination.

.

In the event that this is not done correctly,

then there is no basis upon which to take the vehicle,

and instead the debtor will retain his contractual right to possession under the terms of the agreement.

.

Assuming that the agreement has been brought to an end correctly,

then the contractual right to possession will terminate alongside the agreement.

But that is not the end of the story

.

– if the hirer has statutory protection against the owner

repossessing the vehicle under section 90,

then, in view of the consequences,

.

it means the lender will have to approach the matter with a certain degree of care.

.

In theory the easiest method of repossessing a protected vehicle is for the lender to obtain the debtor’s consent to take the vehicle from him.

This approach also has a commercial logic in minimising costs when ultimately they may not be recovered.

.

It is important to remember that the consent must be genuine and given voluntarily,

and, therefore, lenders should make sure that where third party recovery agents are used to repossess protected vehicles,

the processes that they adopt are reliable in this regard.

.

Practices involving either coercion or misrepresentation could cause licensing issues

when considered under the Irresponsible Lending Guidance.

.

As a minimum,

the lender should obtain from the debtor a signed mandate at the time of the repossession,

stating clearly and unequivocally that the consent is given freely.

.

The mandate should also provide full details including the debtor’s name, address, vehicle description and related agreement number.

It is useful too if the mandate includes a declaration to this effect,

together with a comment on the fact that the keys and logbook have been provided

– such an approach is likely to indicate informed consent and so reduce the risk of any future claim under section 90.

.

If consent to repossess the protected vehicle cannot be obtained from the debtor,

the only option available to the lender is to obtain an order from the court for its return.

.

As ever, the process of issuing proceedings inevitably involves risk, additional costs

and may cause delay in recovering the vehicle because attendance at a hearing is likely to be necessary.

[alandun]

Many thanks for this information.

 

I shall make an official complaint to them

 

I believe they will make their excuses

 

I shall then take it to the financial ombudsman who should in theory find it my way and order them to correct their failings.