Mercedes Benz - Ridiculous back and forth VT situation

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

That's the difficulty with the FOS, as I said they are not legally trained and no doubt reading and understanding the law is probably costly in terms of resources and I don't think they are equipped to deal with anything beyond a simply issue. The sooner a High Court decision is made on this the better as then the FOS have no leg to stand on in terms of rejecting these sort of arguments.

Well i have till the 7th to respond again, and this time a final judgement will be made from FOS, I would love to put it all into a perspective that gets me the win, but i feel quite confident that FOS will take the usual approach and side with the lender. I feel if they favour myself it will open an industry wide can of worms that for some reason they are trying to avoid currently.

Any help putting a final piece together for review from FOS would be greatly appreciated. Im really not the best at writing these things. I tend to vent to much emotion rather than stick to the points!

Thanks

[R0b]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Not much more that I can add Jonny other than what I've said really. I would suggest compiling it together that youve not already mentioned.

[AlfonsoBellacroft]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Very interested in the outcome, just before I VT my BMW agreement.

There is not much conclusive reporting going on here - are people instructed to not mention the positive outcomes and therefore generate loads of VTs?

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

To shine light on the progress of this case, as seen above the ombudsman found in favour of MBFS, from the argument made. I was asked to respond before the case was finalised, giving me an option to further my points and for this to be looked at by a senior FOS.

My last response was as follows:

Good morning FOS,

I have emphasised certain points for you in response to your recent findings in favour of the lender, I must request that this is looked at fairly and without bias. I spent a great deal of time investigating, and speaking with professionals to formulate my case, and I would like to say I fell 100% confident in my arguments.

Understanding you have explained this will be your final response I would hope that this is not taken lightly and if further opinion is needed then that you do so.

Please find my responses as follows: in bold to be clearer

1. The maximum liability when terminating under section 99 of the CCA (Voluntary Termination)

“You’ve said that you feel the excess mileage clause has been inserted in your contract to circumvent the maximum liability set out in the Consumer Credit Act 1974. I understand the point you’re raising here, but terms like this are very common in these types of agreements. So, I don’t think that a term relating to this is trying to circumvent the act.

The CCA covers various types of credit agreement and isn’t specific to vehicles. So, placing a term specific to vehicles in a contract for vehicle finance is reasonable. And I don’t agree that this term is ambiguous or contradicts the term you’re referring to. This is because subsection 4 of section 100 states:

If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly.

This clearly makes provisions for a business to increase the amount payable if an obligation to take reasonable care of the goods is contravened. In this case the obligation was to stick to an agreed maximum mileage, which hasn’t been done.”

Section 100(1) effectively states that if you terminate under Section 99 then liability is capped at 50% of total price payable - which is made up of the total price of the sums paid to date and any sums of the total price due immediately before termination. 'total price' is defined in s.189 of the CCA as specifically excluding charges which are a penalty, compensation or damages for breach of the agreement, therefore any other sections of the CCA are in fact irrelevant if not stated as part of Section 99.

2. Vehicle damage

“You’ve said that section 100 only concerns itself with the condition of the car and not the value, but in actual fact “condition” isn’t mentioned. What is mentioned is an “obligation to take reasonable care of the goods.””

In this case then the question is not about condition of the vehicle and more about the terms of the contract, then section 100(1) is a statutory provision under the CCA which is implied automatically into the agreement and cannot be removed.

“I’ve also reviewed the case of Brady v St Margaret’s Trust, but I feel the ruling made in that case is very different to the issue being disputed here. The case refers to the condition of a vehicle and a breach of contract for repair, whereas this dispute is about the contravention of an excess mileage clause. We’re not talking about damage to the car, we’re talking about the mileage done.”

The mileage, according to MBFS side of the argument, is claimed to be stating the car has not been kept in ‘reasonable condition’ If this is the case, according to the case of Brady v St Margaret’s trust would then still apply as this stated it will then be on the lender to prove that the car is not in reasonable condition, due to the excess mileage. They have not done so. Other than stating that the car will hold less value. This again will contradict what is set out in the CCA section 100, that if I terminate as per section 99 –

Then liability is capped at 50% of total price payable - which is made up of the total price of the sums paid to date and any sums of the total price due immediately before termination.
'Total price' is defined in s.189 of the CCA as specifically excluding charges which are a penalty, compensation or damages for breach of the agreement.

As I don’t agree that the court case you’ve referred to is about the same issue, I can’t agree that we’re departing from any relevant law. But I do want to explain my approach clearly:

You took out a hire purchase agreement and signed to say you agreed to be legally bound by the terms. One of the terms you agreed to said:

If you don’t exercise your right to purchase the vehicle, an excess distance charge will be payable at the rate of 9.00 pence (plus VAT) for each Mile, by which the total distance travelled by the vehicle and the end of the period of hire exceeds the allowed distance, calculated at the rate of 10000 Miles per year (see Condition 12).

This term was clearly set out in the agreement and I don’t agree that it’s unfair or unreasonable. As you agreed to be bound by the terms, I believe that it’s fair for them to be applied here.

I took out a hire purchase agreement and signed to say I am legally bound by the terms under regulation of the Consumer Credit Act 1974,

Therefore, under the CCA1974 section 100, that if I terminate as per section 99 –

Then liability is capped at 50% of total price payable - which is made up of the total price of the sums paid to date and any sums of the total price due immediately before termination.
'Total price' is defined in s.189 of the CCA as specifically excluding charges which are a penalty, compensation or damages for breach of the agreement.


I would also like to bring up another point which further emphasises my argument. I have attached the copies of the contract MBFS sent to me via email when I began to pursue this, due to thinking that the contract was ended and cleared I discarded the paperwork after a month or so.

You will note that two pages were missing from the document PDF that they sent to me, these were pages 2 and 3 out of 7

I have attached scanned copies of these two pages, after obtaining them. You will note in the section headed;

TERMINATION: YOUR RIGHTS
You have a right to end this agreement. To do so, you should write to the person you make your payments to. We will then be entitled to the return of the goods and to half the total amount payable under this agreement, that is £19268.90. If you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will not have to pay any more.

Underneath this statement you will see I have signed the hire purchase agreement regulated under the CCA 1974

As discussed under CCA 1974, section 100 applies to hire purchase agreements and section 99 applies to voluntary termination and again I will emphasise the point

Then liability is capped at 50% of total price payable - which is made up of the total price of the sums paid to date and any sums of the total price due immediately before termination.
'Total price' is defined in s.189 of the CCA as specifically excluding charges which are a penalty, compensation or damages for breach of the agreement.


The terms set out in the agreement contradict the CCA 1974, they also contradict the terms on pages 2 where it shows more detail on termination rights and cannot specify that additional charges can be enforced. And then on page 3 where it states;

“VEHICLE CONDITION TERMS”

Mileage is not noted under this sections at all.

So, my argument is further emphasised, that MBFS specify in the terms under TERMINATION: YOUR RIGHTS, that as long as 50% of the total is paid and the car is kept in reasonable condition, then there is nothing else to pay. Overleaf where it then explains VEHICLE CONDITION TERMS which do not include a section about mileage. It is quite clear that if terminating under section 99 that excess mileage charges are not enforceable

I would argue that taking ownership of a vehicle, maintaining it, repairing it, and servicing it are keeping the car in “reasonable” condition. As mentioned on page 3 of the contract with MBFS where it specifies – Servicing, Damage, Keys, and Registration Documents

I would argue that the mileage of a car is not an indication of its condition, the appearance and how the car is looked after is.

I would argue that MBFS stating that exceeding a limit of mileage is not an indicator of condition, other than speculating that the goods may be lesser in value if this is the case. I have not received any evidence to suggest this, and even if I were to as I have stated several times, I would not be liable after voluntarily terminating under section 99.

I would hope that this is clear enough at this point to allow your full understanding that MBFS contract is contradicting both of itself and the CCA 1974 when applied to Voluntary Termination under section 99



Kind regards

Today i recieved another resopnse from the FOS in light of my last reply shown above i recieved this:

Dear ...

Thank you for your further email.

I’ve reviewed your points, but I don’t believe these change my opinion. I’ve therefore asked for an ombudsman to review the complaint and issue a decision.

I’ve attached a fact sheet that explains what this means. And I wanted to let you know that, in the interests of fairness, I’ve asked the case to be reviewed by an ombudsman who hasn’t been involved, rather than the one I took advice from previously. This will ensure that the decision is reached independently of what has gone before.

If you have any final evidence you want to send, please forward this to me. And feel free to let me know if you have any questions.

Kind regards

I have responded with the following:

Dear FOS,

I appreciate you getting back to me, I am somewhat confused how you have not found the recent details that Mercedes failed to show initially as irrelevant. The contract I signed you could argue includes mileage charges, these are not specific to voluntary termination. Which is a separate section in the CCA, and explains that I am not liable as long as 50% is paid and have maintained reasonable condition of the goods.

The second page which I included explains these rights and does not include mileage charges, page 3 even shows the conditions that dictate reasonable condition and they also do not include mileage charges.

To quote the statement on the second page: “If you have paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will not have to pay any more”

The only way that I could be liable to pay for anything further, if excess mileage charges can be recognised as making the condition of the car unreasonable. MBFS have not put forward any proof of this whatsoever.

The point you argued in favour of MBFS was as follows:

Subsection 4 of section 100 states:

If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly.

This clearly makes provisions for a business to increase the amount payable if an obligation to take reasonable care of the goods is contravened. In this case the obligation was to stick to an agreed maximum mileage, which hasn’t been done.”

However Section 100 subsection 1 specifically overrules this as I have voluntarily terminated under section 99 stating:

If you terminate under Section 99 then liability is capped at 50% of total price payable - which is made up of the total price of the sums paid to date and any sums of the total price due immediately before termination.

'Total price' is defined in section 189 of the CCA as specifically excluding charges which are a penalty, compensation or damages for breach of the agreement, therefore any other sections of the CCA are in fact irrelevant if not stated as part of Section 99


Again I would like to draw your attention back to the comment made in an earlier email:

I would also like to refer you to a publication by the FOS (Issue 91, myths and truths about the ombudsman service, http://www.financial-ombudsman.org.u...and-truths.htm) where it suggested one of the myths was that the “Ombudsman ignores the law by using “fairness” to decide complaints”.

In response by the FOS, it confirmed that “In most cases, our approach is based on what the courts would be likely to do in similar circumstances.”

Furthermore, I also refer to another Court of Appeal case, R (Heather Moor & Edgecomb Ltd) v FOS[2008] EWCA Civ 642. Lord Justice Stanley Burton commented (para. 49 of the judgment) that DISP 3.6.4 allows an Ombudsman to “to depart from the relevant law, but if he does so he should say so in his decision and explain why”. This is a legally binding decision on the FOS and they must comply with it, failing to do so means they are in breach.


I do not feel you have made an effort to look further into the points I have made and give me a response as to why you fail to change your mind and fall in favour of the lender. I have specifically argued against points you have made and followed my comments up with back up showing , where I feel they are incorrect as per the CCA sections 99 and 189. I have also introduced new evidence in MBFS contract which contradicts other aspects of the contract, and does not specifically state mileage charges are to be part of “reasonable condition” I signed this document, and it appears that this is now being over looked and you are not offering me a clear understanding as to why. You simply state you have not changed your mind without giving evidence for your reasoning.

I appreciate that this will now be escalated to a senior ombudsman, however I feel that I have not received satisfactory response from yourself.

As I have countered your findings and you have simply deferred from responding to my argument.

Kind regards

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

So guys an update today..

received letter from FOS, again ignoring all the points ive made and simply stating that MBFS are fair and just to pursue me. I obviously will decline accepting this decision.

So now i presume i will wait to bombarded by MBFS with letters pursuing me for the money, probably have a mark on my credit file and never receive a court summons!

Cant wait!

I am not clued up about what to do next as you can tell so any further advise appreciated at this stage

Thanks

[R0b]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Disappointing as usual from the FOS but, the ball is in their court now (and yours if you have a default on there to take action yourself).

There has been one case ongoing at the moment I think where MBFS have issued a claim around £8,000 but they might not choose to do this against you if they don't feel it's worth it.

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

So after the final response from FOS they gave me till yesterday to accept or reject the final decision. I rejected of course. Now i await MBFS next move. What is typical to expect at this stage? I presume i will see a marker appear on my credit file? Just what i need when im trying to get a mortgage!

So what are people doing at this stage?

Cheers

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Just to bring this thread back to light, After FOS final decision favouring MBFS, i received a letter from a third party (Mortimer Clarke Solicitors) acting upon MBFS stating that i owe the money still. I did not respond to this letter, and have not heard anything from them since which is now several months. I believe the company have tried to call me on my landline and once on my mobile. I had not answered either call but checked the number on google to find out who it was. no voicemail were left.

Yesterday i received another letter from Mortimer Clarke Solicitors, expressing that i need to make the payment or potentially face court action. I would love to hear from anyone... [MENTION=71570]R0b[/MENTION]

AS it becomes more evident that this might actually go to court at this stage. Should i have replied to date, or should i respond at this stage etc?

Please offer opinions.

Thanks

[R0b]

Re: Mercedes Benz - Ridiculous back and forth VT situation

If you are able to post up the letter and redact your personal information that would be helpful but from the sounds of it, Mortimer Clarke have sent you a letter before claim - If you don't respond they will issue a claim. However, the new Pre-Action Protocol for Debt Claims applies which MC must comply with.

Just to clarify, the issue relates solely to the excess mileage and not the service history? I recall from your original post it seems as though the service history issue has been resolved but want to make this is the case (and in MC's case).

What are you thinking of doing? You will need to decide whether you want to defend this or come to some arrangement. There is another ongoing case at the moment which is due to be heard on Monday on excess mileage - its only county court case so it's not binding on anyone and another judge could make a different ruling so before you write back or do anything, you should consider your options and what you are willing to do.

As above, it would be helpful if you can post the letter on here and we can see what it says.

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Hi [MENTION=71570]R0b[/MENTION]

Yes i believe it is a letter before action, It explains i have 30 days to make payment before they proceed, I will post up a copy of the letter later on with my information redacted.

This is the first letter i have received from MC, i realised the previous letters were from a separate company simply chasing the debt, which i ignored, i had 3 of them in total.

In my situation, i do believe that the fees are mis sold. from everything i have read on the topic, i dont find them fair, and still to this day i have witnessed car salesmen explain that there is no need to pay excess if you VT. It is just as common as it always was.

I am not in a financial position to outlay the fees, nor do i believe i should legally have to, therefore i would like to pursue the fight, however i am not in a position to spend money on a legal team, and dont know how i would fair arguing against professionals in court. I am somewhat at a loss as to what i am supposed to do on this basis.

The matter is simply for the excess mileage, the service history was cleared up straight away last year, and has not been mentioned since, infact i received a credit note from MBFS to clear the costs for service history.

Id be interested in seeing how other case might turn out, from my understanding there was no record of these cases even going to court to this date?

Also i am not aware of the new rules so would be keen to know more about that?

Thanks

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

[MENTION=71570]R0b[/MENTION] Please see the letter they sent me on the 23rd November. I think i have cut this a bit fine considering 30 days will be up on Saturday!

Dear XX XXXXXXXXX

Re: Mercedes Benz Financial Services (UK) Limited
And: XXXXXXXXXXXXXXXX
Outstanding Balance £2106.97
Ref: XXXXXXXX

We are solicitors instructed by Mercedes Benz Financial Services (UK) Limited in relation to your remaining liability under the agreement dated 30/06/2013. This relates to end of contract charges, full particulars of which have already been supplied to you by our client.

We ask you to pay the sum of £2106.97 direct to this office within 30 days, failing which, we have been instructed by our client to issue a claim against you in the county court for the full balance, plus any fees and costs the court may award our client.

If we start court proceedings and you do not reply to the claim form that the court sends you, within the prescribed period of time advised by the court, our client will request that the court grants a judgement order payable in full, forthwith.

The consequences of a county court judgement

If court proceedings are started and the court makes a judgement order against you, this will mean that:

• Your debt will increase

If the court agrees to make a judgement order, it will usually include solicitors' fixed costs and court fees.

• You will find it more difficult to get credit

The judgement order will be registered on your credit file and will stay there for 6 years. It is likely that this will affect your ability to borrow any more money.

We want to work with you to avoid a county court judgement being made against you. If you are unable to pay this debt in full within 30 days, our client would consider reasonable offers of payment, based on what you can afford to pay from your disposable monthly income. Please telephone us to discuss this. Alternatively, we attach a financial statement for completion. please complete this and return it to us within 30 days from the date of this letter.

No interest has been incurred and no administrative or other charges have been imposed since the debt became payable. Our client considers that the debt became payable once the invoice became due. No interest or other charges are continuing. A copy of the agreement between you and our client can be requested together with a statement of account. We also enclose and information sheet and reply form. We are available on 0333 XXXXXXX from 8:00am to 8:00pm Monday to Friday and 9:00am and 1:00pm on Saturdadys

Your faithfully
Mortimer Clarke Solicitors

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

I also noticed there are reply forms along with the letter above, allowing me to respond and select options regarding the "debt"

I agree i owe the debt
I owe some of the debt, but not all of it
I dont know whether i owe the debt
I dispute the debt
etc etc

I then have the option to provide documents to support my reply, It also explains i can ask for further supporting documents from them, and that i can list them myself.

I am still happy to keep fighting this so any help with regards to these letters would be great!

[R0b]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Hi Johnny,

Obviously the decision to fight on is entirely up to you, of course you do need to be aware that the sum of money isn't a small amount and if you do lose in court and don't pay up within 30 days from judgment then you will end up with a CCJ on your record for the next 6 years. Of course if you have the means to pay it off by the time a court hearing comes about and you still want to have your say then I will help where I can.

Have you considered the above and still happy to go on and defend it? It all rests on making your case in court and persuading the judge that they cannot recover these contractual excess mileage charges.

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Hi [MENTION=71570]R0b[/MENTION],

I do understand the consequences, ultimately i can pay the amount if i absolutely must do. But i do believe the whole car sales and PCP industry is rubbish based on all the lies they tell you about VT and what not. Its more a matter of principle at this point. I will need to pay a large amount now, or at the end of the court hearing either way, and i believe that i am in the right. So i want to argue this matter to the end.

I understand there is still not a case to date that has gone to court? It seems like MBFS are now trying to pursue everyone through Mortimer Clarke. They must be brave, as they lose cases this will end up quite a big scandal. The next miss-sold PPI!

What would you suggest at this stage? should i respond to them via phone, or via the response forms they supplied? Should i simply explain i wish to dispute? request time? put an argument together?

The argument is soley for the excess mileage, the car was near perfect condition upon return, with hardly a stone chip to be found. All 4 wheels were brand new as i had them replaced under warranty weeks before returning, as with the interior seats ( known MB issues on that model car) the paint work was also mint as i am a bit of a car detailer and used ceramic coatings all round. All serviced up to date, and MOT from MB themselves. There initially was an issue with service as they didnt find a receipt, this was cleared up straight away.

So it will simply be arguing the mileage and nothing else.

Thanks

[R0b]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Well you need to complete the reply form and return to them, but maybe you should also request a copy of the vehicle's condition report too which confirms it was in a reasonable state. You might also want to identify the exact grounds they are relying on in support of their claim for the excess mileage, and also confirm that the 'end of charges' are solely excess charges.

I recently wrote a letter in response to the new Debt PAP which you might find useful so I will dig it out and upload it on here ,probably later today. Mortimer Clarke don't seem to have any email address to use as a contact so you may want to consider calling them and asking for one to send your response as opposed to sending it by post. If they can't give one and you do have to send by post then you might want to put them on notice to refrain from issuing any proceedings until they are at least in receipt of your letter - if you need to record the call as evidence, up to you.

There was a recent case which was lost on the basis that he exceeded the mileage by about 50-60k miles and a sum of around £6-7k which is 3 times more than yours anyway. It was unclear in the judgment why exactly the judge found in favour but they had alleged that he failed to take reasonable care of the car. The judge seemed to have agreed despite a condition report being referred to as saying it was within standards he still found that there was a lack of reasonable care but did not say how or why. I can only assume that it related to the excess mileage charges but in view that was inherently wrong. the obligation not to exceed the agreed mileage is a separate cause of action to a duty to take reasonable care of the car. simply exceeding the mileage (even if by 1, 100 or even 1,000 miles) cannot, on its own mean you failed to take reasonable care. Section 100(4) of the CCA says you only need to take reasonable care of the goods (i.e. not to do anything which causes physical damage), it does not say that you have to take reasonable care in avoiding financial loss - which in this case is the depreciated value for the excess mileage.

It is only a county court case so its not binding but there are differences between yours and that one, namely the difference in mileage.