Excess mileage charge

[R0b]

Re: Excess mileage charge

[MENTION=77627]Openlaw15[/MENTION] I'm afraid s.99 is a defence to the excess mileage charges, just because there is a term in the contract doesn't make it enforceable. If you look at the definition of "total amount" you will understand what I mean (s.189 I think)

[MENTION=76782]taraoscar08[/MENTION] if you wish to make a payment to BMW by all means go ahead, this is what finance companies do to recoup their monies lost on borrowers VTing their agreement, they put pressure on and make you think that you owe them money. Not a lot of people I think are aware that once you VT then the law says as long as you have paid 50% of the total amount payable then you are liable for no more (you can't recover amounts paid over the 50%).

I would tell them your not paying it but if you've already made a payment then you may wish to remember this point if you take another car out on finance. [MENTION=39331]ostell[/MENTION] has hit the nail on the head, the likely reason why this hasn't gone to court is because the law is quite clear, there's already been a few county court cases which judges have agreed that liability is restricted and they don't obviously want a precedent set where everyone knows about it. It's far easier for them to recover money from people who are not aware that they only need to pay 50% of they VT.

[taraoscar08]

Re: Excess mileage charge

Thanks for your reply, I've not contacted them yet so not paid anything as of yet. What do you suggest I say to them then? I'm not very good with wording of emails as I don't feel confident without you guys. Are you able to draft something up for me. I am scared that they will take me to court and this will have an affect on my credit rating.

[R0b]

Re: Excess mileage charge

I would suggest that you do not pay them a penny, I've already outlined and mentioned what the law says in that they cannot claim back any additional charges beyond the total amount payable if you have VT'd the agreement. However, I don't want you to take this the wrong way but if your scared then just pay them and make it all go away. As I said, this is exactly what lenders do to claw back any losses they have made due to you VT'ing the agreement, they throw some law at you and then people get scared and pay up. Any reasonable judge who looks at the Act will likely agree that your liability is restricted, however the choice is yours and ultimately its your decision.

If you want to defend it, then feel free to use the template below.

Dear Sirs,

I write in response to your email/letter dated [ ].

s.100 outlines the liability of the debtor on terminating the agreement in accordance with s.99 of the Act. Provided that half the total price payable under the agreement has been reached, the debtor's liability is restricted to that amount. I refer you to the definitions of the Act under s.189, more specifically the definition of "total amount". As you will note, total price is defined as a sum payable under the agreement but excluding any sum as a penalty or as compensation or as damages for breach of the agreement. You will also notice that the total amount payable under my agreement is [£ ], and therefore half of the total amount payable equates to [£ ]. The total amount payable does not include any charges for excess mileage, I have paid half of the amount in accordance with ss.99-100 and I am therefore under no further obligation to pay any further monies to you. Furthermore, the excess mileage charge forms part of the contractual agreement and although you may argue that this is a breach of the agreement, the Act specifically excludes any penalties, compensation or damages as part of the total price for the purposes of terminating in accordance with s.99 of the Act which is confirmed by virtue of s.173 insofar as any term of an agreement which is inconsistent with the Act shall be void.

To further clarify matters, in First Response v Donnelly the judge confirmed that where a debtor exercises their right to terminate the agreement in accordance with s.99, the liability of the debtor will be limited to the amount set out under s.100(1), namely one half of the total amount payable and in this case, [£ ]. You mention that I was invoiced prior to the agreement terminating however, the Agreement was terminated upon my notification to BMW that I wish to invoke my statutory rights under s.99 of the Act.

In light of the above, it would appear that your interpretation of the Act is simply incorrect and for the reasons set out above, please treat this letter/email as my final position on the matter. I do not intend to correspond any further unless it is your intention to commence legal proceedings, which I shall defend in full. I confirm that I accept service of proceedings to the following address [ ].

Please note that should you continue to contact me requesting payment without any intention of issuing proceedings, this shall be deemed harassment and I will consider taking further action and or measures against RMS Receivables as a result.


Yours faithfully

[taraoscar08]

Re: Excess mileage charge

Thank you, I am not scared to stand my ground just scared that if they do take me to court on this matter I will get a ccj or something. can that happen? I am going to send the email to them now and see what their response is. Thanks again for your help.

[R0b]

Re: Excess mileage charge

Thank you, I am not scared to stand my ground just scared that if they do take me to court on this matter I will get a ccj or something. can that happen? I am going to send the email to them now and see what their response is. Thanks again for your help.

There's always going to be the possibility that if you go to court you may lose, however in this situation the law is pretty clear on this point - there's a reason why there's only a handful of cases that have gone to court about excess charges. Even if you did lose and the judge awards a portion of the money they claim you will have 1 month to pay it off in full before you get a CCJ.

[taraoscar08]

Re: Excess mileage charge

There's always going to be the possibility that if you go to court you may lose, however in this situation the law is pretty clear on this point - there's a reason why there's only a handful of cases that have gone to court about excess charges. Even if you did lose and the judge awards a portion of the money they claim you will have 1 month to pay it off in full before you get a CCJ.

Great that's reassuring.

Will let you know what their reply is tomorrow. Thanks again for all your help.

[R0b]

Re: Excess mileage charge

I would expect them to say you still owe the money, just make sure to fill in the gaps in brackets before you send it off. The person on the other end of the email is unlikely to be legally trained and they may be on a commission basis so its in their interests to recover monies from you.

Let us know their response.

[Openlaw15]

Re: Excess mileage charge

Great that's reassuring.

Will let you know what their reply is tomorrow. Thanks again for all your help.

Tara I studied contract law as part of a law degree. The case they're citing is County Court case from 2006. My best advice to you was to say that the salesman made a representation which induced you to sign the contract with the incorporated term 'excess mileage charge' but you did so only on the understanding that this would not personally affect you. If any of these Legalbeagles have studied contract and commercial transaction law, then their opinion pertaining to this matter is relevant. In the First Response case incidentally the other was entitled to damages and the consumer argument failed (assuming it's the same case). Unless you read the case for yourself and understand its application to your situation you're going down a dangerous path. BMW will simply challenge it if you go to court and given County Courts are inferior you will likely be saddled with unexpected court costs. If you breach a contract the other party is entitled to damages simple as that. If however you argue that the term was a clause where there was a misrepresentation you have a far better chance of having this not go to court and not have to pay for the excess mileage. It's like endowments were mis-sold during the 1980s and 1900s, ie misrepresented... this argument was successful as the salesman exaggerated the claims of endowments for massive sales' commission. Please use your own logic before you listen to anyone on here. If ever I say something I will back it up with legal authority. Look at my posts under property law issues etc.

[R0b]

Re: Excess mileage charge

Tara I studied contract law as part of a law degree. The case they're citing is County Court case from 2006. My best advice to you was to say that the salesman made a representation which induced you to sign the contract with the incorporated term 'excess mileage charge' but you did so only on the understanding that this would not personally affect you. If any of these Legalbeagles have studied contract and commercial transaction law, then their opinion pertaining to this matter is relevant. In the First Response case incidentally the other was entitled to damages and the consumer argument failed (assuming it's the same case). Unless you read the case for yourself and understand its application to your situation you're going down a dangerous path. BMW will simply challenge it if you go to court and given County Courts are inferior you will likely be saddled with unexpected court costs. If you breach a contract the other party is entitled to damages simple as that. If however you argue that the term was a clause where there was a misrepresentation you have a far better chance of having this not go to court and not have to pay for the excess mileage. It's like endowments were mis-sold during the 1980s and 1900s, ie misrepresented... this argument was successful as the salesman exaggerated the claims of endowments for massive sales' commission. Please use your own logic before you listen to anyone on here. If ever I say something I will back it up with legal authority. Look at my posts under property law issues etc.

No offence Openlaw but I did have a giggle at what you wrote there.

Firstly, the mis-representation argument is weak, if she was told about this orally prior to signing the agreement then I highly doubt it will stick. Sounds like you've done a law degree but never really worked in practice - oral arguments are difficult to prove even on a balance of probabilities.

In the First Response case incidentally the other was entitled to damages and the consumer argument failed (assuming it's the same case). Unless you read the case for yourself and understand its application to your situation you're going down a dangerous path.

Yes the case related to a matter where the creditor terminated the agreement and the debtor attempted to rely upon s.100 restricting liability. The judge rejected the debtor's argument stating that the protection of s.100 can only be relied upon when the debtor terminates in accordance with s.99 not the creditor.

BMW will simply challenge it if you go to court and given County Courts are inferior you will likely be saddled with unexpected court costs.

Sure BMW could take her to court and in the event they lose they may appeal however would they really want to do that when the law is appears heavily against them and set a precedent? I think not, and my point is proven in the fact there is no current precedent on this point - maybe because the law is already clear? So, I disagree with you on this.

If you breach a contract the other party is entitled to damages simple as that.

You might need to brush up on your contract law about this point and maybe read the Consumer Credit Act too.

Please use your own logic before you listen to anyone on here. If ever I say something I will back it up with legal authority. Look at my posts under property law issues etc.

Not every area of law is going to be riddled with case law, and this particular area is on of them.

I think you might have jumped into the deep end here without actually thinking or taking the time to review what the issue is and how it applies. You seem to have just spouted out something and i'm sorry but it is in no way constructive. Relying on misrepresentation only is certainly not going to get her anywhere on this issue at all and whilst it could provide a defence, realistically the chances are slim to none.

[nemesis45]

Re: Excess mileage charge

No offence Openlaw but I did have a giggle at what you wrote there.

Firstly, the mis-representation argument is weak, if she was told about this orally prior to signing the agreement then I highly doubt it will stick. Sounds like you've done a law degree but never really worked in practice - oral arguments are difficult to prove even on a balance of probabilities.


Yes the case related to a matter where the creditor terminated the agreement and the debtor attempted to rely upon s.100 restricting liability. The judge rejected the debtor's argument stating that the protection of s.100 can only be relied upon when the debtor terminates in accordance with s.99 not the creditor.


Sure BMW could take her to court and in the event they lose they may appeal however would they really want to do that when the law is appears heavily against them and set a precedent? I think not, and my point is proven in the fact there is no current precedent on this point - maybe because the law is already clear? So, I disagree with you on this.


You might need to brush up on your contract law about this point and maybe read the Consumer Credit Act too.


Not every area of law is going to be riddled with case law, and this particular area is on of them.

I think you might have jumped into the deep end here without actually thinking or taking the time to review what the issue is and how it applies. You seem to have just spouted out something and i'm sorry but it is in no way constructive. Relying on misrepresentation only is certainly not going to get her anywhere on this issue at all and whilst it could provide a defence, realistically the chances are slim to none.

Rather too much of this through a number of threads I think Rob it's not helpful at all!!

nem

[Openlaw15]

Re: Excess mileage charge

No offence Openlaw but I did have a giggle at what you wrote there.

Firstly, the mis-representation argument is weak, if she was told about this orally prior to signing the agreement then I highly doubt it will stick. Sounds like you've done a law degree but never really worked in practice - oral arguments are difficult to prove even on a balance of probabilities.


Yes the case related to a matter where the creditor terminated the agreement and the debtor attempted to rely upon s.100 restricting liability. The judge rejected the debtor's argument stating that the protection of s.100 can only be relied upon when the debtor terminates in accordance with s.99 not the creditor.


Sure BMW could take her to court and in the event they lose they may appeal however would they really want to do that when the law is appears heavily against them and set a precedent? I think not, and my point is proven in the fact there is no current precedent on this point - maybe because the law is already clear? So, I disagree with you on this.


You might need to brush up on your contract law about this point and maybe read the Consumer Credit Act too.


Not every area of law is going to be riddled with case law, and this particular area is on of them.

I think you might have jumped into the deep end here without actually thinking or taking the time to review what the issue is and how it applies. You seem to have just spouted out something and i'm sorry but it is in no way constructive. Relying on misrepresentation only is certainly not going to get her anywhere on this issue at all and whilst it could provide a defence, realistically the chances are slim to none.

How does the 2006 case relate to an excessive mileage clause, is my first question. I do not know about a CC Court being a precedent...if you believe this am not really sure you understand stare decisis. BMW does not want its customers reliant on consumer rights ergo the entire industry of vehicle agreements will be prejudiced which will have an affect on business. As for the verbal statement - nearly all of the mis-sold endowments were verbal and not recorded in writing. In contract law verbal contracting are binding notwithstanding written terms as part of the same contract, no less.

[R0b]

Re: Excess mileage charge

[MENTION=77627]Openlaw15[/MENTION]

I think you've mis-read or possibly not understood what I have said.

The case is related because the agreement was regulated by the CCA 1974, if you read my last post about the case then you'll understand why.

At what point did I say that a CC judgment was binding?

Not sure what point you are making about BMW and the vehicle industry but I'll try to make it simpler, you may or may not know that statute says a business cannot exclude liability for death or personal injury, so if a business had a term in their contract that excluded death and personal injury, does that mean they are not liable?

I am already aware how contracts can be formed but again, you don't seem to have read my last post.


Your post confirms to me that you've not fully read/understood the original poster's problem as you have failed to understand, read, interpret the applicable laws and/or case law. It's all well and good knowing the law and citing authorities but unfortunately we are not all lawyers who've studied a law degree and the majority of people on here are ordinary people with no legal background whatsoever (aside from those with personal experience and/or some legal knowledge).

You need to know your audience and give practical advice that can be easily digested and understandable. I'm all for respecting other people's opinions who may disagree with me but so long as its constructive and valid and unfortunately I don't feel your post was constructive given what you've said so far.

[taraoscar08]

Re: Excess mileage charge

Well I've not heard anything since I sent that last email. Either they are preparing a court summons or they are not going to Persue me any further 😐

[R0b]

Re: Excess mileage charge

Well I've not heard anything since I sent that last email. Either they are preparing a court summons or they are not going to Persue me any further 😐

I wouldn't worry about it, they would have to at least send you a letter before action before court. They will no doubt pass it over to a debt collector who will try and extort the money that way but you should hold your ground. They may take some time so just sit tight and see what happens.

[taraoscar08]

Re: Excess mileage charge

I've jinxed it.. Just had a letter.

Thank you for your email dated 28th December relating tithe vt excess milage invoice which you received in December . Having had the opportunity to review your agreement in full and investigate further please allow me to confirm Bmw financial services position.

At the beginning of your agreement you gave us a predicted annual mileage of 8k per annum. In turn we therefore expected the vehicle to have a maximum return mileage of 32000 the entire foundations of your agreement would have been based on this given mileage including your balloon figure and monthly rentals

Under the terms of a select product there is a guaranteed future ballon figure. To predict this figure we would take into account the vehicle specification, age term of agreement and predicted mileage. The foundations of this agreement are directly impacted by the mileage allowance, including the ballon figure and monthly rentals. Had this agreement included a higher mileage allowance your final ballon figure would have been lower, your monthly rentals higher. The amount we have charged you for in the form of excess mileage, is no different to the rental increase, had the additional miles included in the contract.

As you exercised your right to voluntary terminate the agreement, I must brig to your attention that your financial document clearly outlines that your mileage will be pro-rated if the agreement ends early.

Excess milage is chargeable under the provision set out in section 99 (2) of the consumer credit act. This section specifically states that the right to vt Dones not affect liability under the agreement which has accused before termination. This means that we can lawfully recover excess milage in addition to the 50% figure allowed by section 100 (1) as your milage was accured before you ended the agreement, we are able to invoice you for this.

Section 100 (1) limits the customers liability to one - half the total price. However, section 100 (4) states that the cost of any damage to the goods shall be added to the amount due under sub section 100 (1) the excess milage charge is a pre termination liability under section 99 (2) and therefore recoverable. Any breach or charge die is treated as it it were due prior to termination

Ther wording termination of your rights section is prescribed by the consumer credit agreements regulations 2010 the wording advises that no more payments will have to be made if there are no areas and if the vehicle is returned in good condition. Bmw financial service have no control over he wording and can only make every effort to make it clear in your agreement that milage will be calculated pro rota as confirmed in the excess milage section on the first page of your agreement. Bmw financial services would also view the vehicle being returned above the agreed milage as putting the vehicle out of good condition.

I note that you mention the law case first response v donelly the issue in the donelly case was whether the debtors liability should be capped at one half of the total price in circumstances where the ageeement was terminated for breach, not where the agreement was voluntary terminated. Donnelly tried to argue that it would be unfair for the lender to recover all their losses but the court disagreed with her and decided in the lenders favour and allowed them to recover all losses arising from the breach, not just one half of the total price which only applies to vt regardless of the ruling the case has no relevance to vt.

In the light of all of the above I remain confident that Bmw financial services have not acted incorrectly by raising this invoice and consider our charge to be an accurate reflection of the additional milage incurred.

Whilst I understand that this is not the response that you were looking for, I hope it has given you a clearer understanding of our position and why the vt milage invoice remains payable in full.

Should you remain dissatisfied with our response you may regret to the financial ombudsman... Bla bla