Rejecting a car on finance as unfit for purpose

[j4mes]

Re: Rejecting a car on finance as unfit for purpose

Just to update. I had a letter from the finance company asking me to call their customer service team. Which I did and I was informed I was over £500 in arrears and needed to bring the account up to date. I also checked my credit file and have a late payment registered on it which has knocked my recovering and now reasonable credit file to very poor. I had been accepted provisionally for an HSBC credit card on their own checker but now get a no. I was also showing eligible for a Zopa loan and now while still accepted, the offered amount is massively reduced. Not good when I'm supposed to be getting some sofas on 4years 0% credit �� (Deposit is paid)

[des8]

Re: Rejecting a car on finance as unfit for purpose

How can you be in arrears when on 10th jan they confirmed there was no further liability and refunded you two installments?

This was a short term rejection and you should get back everything paid out.

IMO you should be considering court action, rather than waiting for FoS to get into gear.
I'm tagging [MENTION=71570]R0b[/MENTION] to get his input on this for you

[R0b]

Re: Rejecting a car on finance as unfit for purpose

If I am reading right there are a few issues here, (1) refund hasn't been made, (2) deduction for the use of the car and (3) the late payment arrears.

I agree with Des about the refund, it must be made without any undue delay and as already suggested, no later than 14 days. The fact that the finance company was waiting for their money back first is irrelevant. On that basis, you should be entitled to interest due to the delay, at the very least, though the Ombudsman if, found in your favour, may award you a small amount of compensation for the delay and inconvenience up to £100 but I wouldn't think much more as they rarely give high awards.

As for the deduction of use, the CRA allows them to deduct an amount for the use you have had out of it even though it is in the first 30 days, because the goods is a vehicle but if it was something else they wouldn't be allowed to. How much they can deduct is a matter of opinion but it may be unreasonable to keep the monthly payments if you have not had a full months' use out of it. The deduction for use could easily be calculated based on the monthly instalments divided by the number of days you have had use based on the day that you contacted them to report the fault until it was fixed (though if you continued to use it despite reporting the fault then that could be deducted too).

Finally, your issue with the late payment arrears can be dealt with in several ways. First off, it is a breach of data protection for recording inaccurate date, to which you could be compensated (case law has suggested at minimum of £750 subject to circumstances) as well as unlawful use of your personal data. The Ombudsman may find in your favour on this and order them to rectify the matter but as above, you are unlikely to get any substantial amount of compensation compared with a claim issued by the court.

As the issue of your credit file is separate cause of action to the other, you would be wise to send a letter before action, and it would not be unreasonable to suggest that they compensate you perhaps £200-£300 for their misuse of your information as well as removing the late payment marker. You should also make them aware that you are looking to apply for credit for which the marker is preventing you from obtaining the amount of credit at the rates you seek. That way if they refuse then you could argue aggravated damages for causing further injury and having a direct financial loss as a result of it.

Given that the Ombudsman may take some time, court action would more than likely provide a swifter response, especially when they are in the wrong, and you will get your application fee back, providing you demand for it.

[des8]

Re: Rejecting a car on finance as unfit for purpose

Thanks @R0b
The only point I query is that this rejection was under the short term right to reject and the Act clearly states "“the consumer is entitled to receive back the same amount of money”.

The vehicle was returned to dealer within two weeks of purchase for repairs.
The clock stops.
Repairs were never satisfactorily carried out so vehicle rejected under short term rights some weeks later.

If rejection takes place under final right to reject, yes I agree deduction for usage can be made, but surely not under short term right?
I know there are differing views on this, but I can't see where the act allows deduction for short term rejection and just get confused! (too easily too often says OH!)

[R0b]

Re: Rejecting a car on finance as unfit for purpose

Sorry Des, I thought this was made under the final right to reject not short term rejection and in that case you are right, there should be no deduction for use so those deductions should be reclaimed and presumably following 20(14)

If the contract is a hire-purchase agreement or a conditional sales contract and the contract is treated as at an end before the whole of the price has been paid, the entitlement to a refund extends only to the part of the price paid.