**Sorted**Finance company threatening to damage credit file

[Phaeton]

I'm sure somebody will confirm but as of today (or when they receive your email) all you have to do is keep the car safe, the car has a legal MOT today so why should you have to get a new one.

[R0b]

Hi all,

Today I phone BPF to pay off what I owe to get to the 50% mark (approx £700). They tell me that even if I pay the £700, I am still liable to make the monthly payments up until the car has been sold at auction.

This is not true and a misrepresentation of the law. When you VT under section 99 of the Consumer Credit Act, except for the obligations set out in section 100 of the Act, the obligations under the agreement fall away. This is further confirmed under section 172 of the Act which says that any contractual provision which imposes additional liability on you that is contrary to the provisions of the Act (in this case section 100), whether directly or indirectly, those contractual provisions are deemed to be void and unenforceable.

So they wouldnt take my payment as I would end up making over payments as the monthly direct debit would still be taken up till the car is sold.(they said they were doing me a favour)

Sounds like a tactic by the advisor to avoid processing your payment to meet the 50% threshold. To confirm, you are not legally required to pay 50% before you can terminate the agreement. In fact, you have the right to terminate at any point in the agreement so long as the last payment is not due at the time of termination. The remaining balance then becomes a debt for which you are liable to pay but as this is a regulated agreement, the FCA rules apply (particularly the CONC rules) and BPF must comply with.

So for example, those who are struggling with repayments could VT before reaching the 50% amount and then offer a repayment plan to pay off the remaining balance to make up the 50%. The lender would not be able to refuse this repayment plan (unless perhaps they offered £1 per month and the hirer could afford something more) because the CONC rules says that lenders must give forbearance and due consideration to those who struggle to keep up with their repayments.

In your case however, you can simply give your notice and send in a cheque to meet the threshold which, if Barclays refused for the same reasons the advisor gave, they might land themselves in trouble with the FCA given that they are already looking at car finance options like PCP. I would also point out that you cannot VT over the phone, you must put it in writing either by letter or email.

When I said I could cancel the DD, they said they would mark my credit file negatively up until the car was sold at auction by them even though the 50% mark had been made and I had informed them of the VT.

This sounds like another tactic and perhaps an aggressive commercial practice contrary to the Consumer Protection from Unfair Trading Regulations 2013. As above, your obligations to maintain the monthly repayments fall away as you are only liable up to 50% of the total price payable under the agreement. The threat of a negative marking on your credit file is likely to breach data protection laws for which you would be entitled to compensation as the information they have recorded is not up to date nor is it accurate. It also probably amounts to negligence too.

My issue is that the car needs to be returned in a good condition, which it is. It has been serviced regularly and has a valid MOT, however, the MOT runs out mid march.

Again, there is no obligation for you to renew the MOT once the agreement is terminated as you have no obligation to do so. For a bit of background (and to put it as simple as I can), a hire purchase agreement or similar type agreement is a bailment of good agreement. In other words, the lender (bailor) loans the goods to you (bailee) for a certain period of time and when that ends it gets returned, unless you exercise the option to purchase. This is what is known as a voluntary bailment i.e. you have agreed to take possession of the goods.

When you VT your agreement it ceases to apply except for the provisions of section 100. Once termination takes effect, it is no longer a voluntary bailment rather you become the involuntary bailee i.e. you have goods in your possession that you no longer want or need. There are certain duties as an involuntary bailee but the most important one to remember is that you have a duty to take reasonable care of the goods and not cause any physical damage or allow physical damage to be caused. That's about as far as your duties go, nothing more. So you are not required to renew the MOT or have the car serviced or renew insurance and in fact your not even supposed to drive the car unless you have permission of the lender. If the lender chooses not to collect the car until after the MOT has expired, that is entirely their prerogative but it comes at their own cost, not yours.

I would presume that all calls would have been recorded and no doubt if you sought the request of those calls under a subject access request they would need to provide you with them provided they are still retrievable. If Barclays are making life difficult for you to VT or insisting that you continue your obligations under the agreement other than to meet the 50% amount and to look after the car, I would be inclined to make a formal complaint and demand a reasonable sum of compensation.

Hope that helps.

[mustard7]

Thanks Rob (and all the other contributors). Your advice and guidance has been most useful.

Is it ok to ask one last question?

Now that I have sent an email with the VT template and paid 50% am I obliged to return the car myself?
I am happy too, although the options I have require me to drive the car a good 40-50 miles to their auction houses.

I ask this because the lady I spoke to today said I had to wait until they call me, before I can 'hand' the car back to them.
Hopefully this will be quickly as the MOT runs out soon and I want to get rid before that expires.
But if I dont here from them for a while, and if they give me a date post expiry, then I will not be able to drive the car to the auction house legally.

I dont want to be hit by their £150 collection charge so unsure what I should do.

Obviously this may be irrelevant as they may call tomorrow with a date before the expiry. But if not, what are my options?

Thanks again

[R0b]

Strictly speaking, this could be seen as an additional financial liability either to put fuel in to drive it to the auction or by arranging the costs of you getting back home. Either way its likely to be caught by the provisions under section 172 and as I've already said, the limits of your liability is set out under section 100 of the CCA.

You can however return the car if you wish, or ask them to pay your reasonable expenses of returning the car to auction and getting home but I wouldn't count on it unless they confirm it in writing. That won't stop BPF from threatening to mark your credit file and in which case the onus shifts back to you to take action, potentially through legal proceedings. If that's all too much of a hassle you might be better off dropping the car off to the auction site.

The decision is entirely up to you as I can only offer my opinion based on what the law says and whether you are prepared to fully defend it. Many occasions, the VT process can be drawn out due to the way lenders conduct themselves when someone exercises this right.

[mustard7]

Hi,
just a quick update..
i sent the VT letter by recorded delivery (luckily)
i called them a couple of times (yesterday and today) and each time they said they hadn’t got the letter.
After the call being escalated they finally agreed to acccept the VT.
however, BPF are insisting that I am still liable to make payments on the car, for the simple fact that the car is still with me.
The reason I kept phoning them was to organise dropping it off, but because they kept delaying me with ‘we don’t have a signed VT’ letter, they would not agree to taking the car back.

They use Mannheim’s auction company, and I was told that in order to not be hit with charges I would have to deliver the car to Manchester (a good 2 and a half hours drive)
they refuse me dropping it off at the closest Mannheim’s as it does not deal with cars. Or I could drive to one an hour away, but would then be hot with a £84 transfer fee.
To cut a long story short, I don’t think I can get to any of those before Saturday (when the mot runs out) due to work commitments.
I could get to the local one (that doesn’t take care apparently) but they are saying I can’t do that.

The lady on the phone today also told me that because the DD would have been due tomorrow, but I’ve canceled the DD, then I would have to phone them up tomorrow to make a manual payment otherwise my credit File would be marked accordingly.

So my questions...
Should I take the car to my local Mannheim’s before Saturday even though they don’t take cars?
if not, they will have to collect... then there is the charge of £150 (plus apparently a £30 valet charge plus any damages)
whats the legal standing on this?
if they mark my credit File negatively, what are my next options?

oh, and about an hour after the phone call I received an email saying that my complaint had been resolved and that I had agreed to this???

[mustard7]

Hi,
just another quick update.
I called them again today... and after being escalated to the complaints dept, BPF have agreed to drop any charges relating to transfer of the car by Mannheim (£84)
I was told to phone my local Mannheim and BPF said they were happy for me to drop it off there.
So I call my local Mannheim.... guess what, they refused to take it as they don’t deal with cars.
I call BPF back, but only speak to an advisor as the complaints team were all busy. I tell them that they would need to come collect the car as I’ve ran out of patience with them.
BUT!!!
Here’s my issue now.
The complaints lady that I spoke to on the phone today said that I would definitely be getting adverse information on my credit file as I am still in possession of the car and therefore I am LEGALLY obliged to maintain payments.
All their calls are recorded as I asked her to confirm this.
I will be extremely unhappy if they do put negative info on my credit file as I have done the VT by the book.
Can I please get some advise on how I challenge the negative info.
I am buying (hopefully) a house in the summer, but this would surely put a stop to that.
Thanks

[Phaeton]

The complaints lady that I spoke to on the phone today said that I would definitely be getting adverse information on my credit file as I am still in possession of the car and therefore I am LEGALLY obliged to maintain payments.

No you are legally obliged to look after the car for a reasonable amount of time, if you have a VT date & have paid more than 50% your financial liability ends but R0b will confirm

[R0b]

As Phaeton has said, your liability when you VT is 50% of the total amount payable and the duty to look after the car until collected or returned. There is nothing within the Consumer Credit Act which suggests you must maintain payments until the car is collected and I would be very surprised if the agreement also said that. Even if the agreement did mention this it would be unenforceable due to the cap on liability.

You might want to make a formal complaint about this and the person you spoke to which is a misrepresentation of the law and potentially an aggressive commercial practice which is contrary to the Protection from Unfair Trading Regulations 2013. Assuming the call is recorded you could separately issue a subject access request for all information they hold about you and specifically the recorded call and give them the time and date you called. You could use that if you wanted to take matters further to the Financial Ombudsman but is your choice.

[mustard7]

Thanks both of you.
What I will do is wait and see if they mark the credit File adversely first.
If they don’t, then I will most likely leave at that. However, if they do I will update accordingly.
Speaking to a friend last night about it, he said he prefers the easy life and would have just paid it.
I guess that’s what they are hoping for, but to lie point blank about legally having to keep paying, well that annoys me.

[mustard7]

Hi all,
just a quick update... and a few questions unfortunately.

Ok, so I followed all the advice from here and the car was finally collected, and sold, at auction a few weeks back.

I checked my credit file and it showed (VT) on a green background.
all good I thought.... until today.

I receieved a letter from Barclays stating that I still owed money and that my File had been transferred to a debt collection company. So I phoned the company to find out what was going on. They informed me that I owed approx £1300 on the account, but couldn’t tell me anymore.
So I phoned Barclays and they inform me of the following.
They tell me that the loan was an unsecured loan and that after selling the car, I still owed £1300-ish.
The loan was not secured on the car so I am liable to pay the difference.

So so now I’m very very confused.

I was under the impression that the loan was secured on the car. If it wasn’t, why did they accept the VT and collect and auction the car?
Why have they marked my credit file as a VT?
Why did they tell me (over the phone) that I had to make 50% mark before I can VT?

Have I been taken for a fool here?

hopefully someone can help me with this.

[R0b]

Can you post up the letter that you received, personal info redacted.

You are right that hire-purchase agreements are a type of secured loan as the debt itself is secured against the car, so you don't obviously own it until you have met all payments required under the agreement.

This to me sounds like Barclays doing their usual thing which is aggressive and unlawful in that I would consider it an aggressive commercial practice contrary to the Consumer Protection from Unfair Trading Regulations. It is also a misrepresentation of the law as your liability is strictly limited to 50% of the total price payable.

What I might suggest you do is download a call recording app on your mobile phone (make sure to test it out first) and then give Barclays another call, and explain you have received a letter for a balance that is outstanding for £1,300. Ask them why they are suggesting that this is owed when you voluntarily terminated the agreement under the Consumer Credit Act - force their hand by getting them to give you a breakdown of these costs. If they continue to claim that it is because the loan was not secured then then explain to them that you are not liable because of section 100 which limits your liability.

There's no need to tell them that you are recording the call, but once you've got them on the hook you can end the call and you will have the evidence you need to put forward a formal complaint as well as passing that call on to your local Trading Standards if you wish and make a formal complaint that way too. Moving forward you should look to record all calls you make to Barclays so you will have evidence should they try to backtrack or deny what you say has been said.

On top of all of this, it might be considered harassment too since it is an alleged debt that is not even owed.

[mustard7]

Hi Rob, and thanks for the prompt reply.
I have attached a quick photo of the letter I received from Barclays today (the 1st and only correspondence I have got from them since the car had been auctioned)
I have downloaded an app to record calls, although I might not get the opportunity to call them until Wednesday due to work commitments.

if they are correct however, and the loan was just a loan and not secured on the car, is it normal practice for them to still collect and auction the car as though it was?

[mustard7]

Oops... it won’t let me attach the photo. File too big apparently.
Will have another pop at it.

[R0b]

An unsecured loan is typically a personal loan which if this were the case, you would own the car outright and you wouldn't have the right to VT. The loan is secured against the car in the sense that Barclays can take the car back if you fail to make the repayments under the agreement. Lenders will say anything to get you to pay up, that's their job no doubt - extract more money get a commission

Unfortunately, finance companies will take advantage where they can and if someone doesn't know their legal rights, they will just simply pay up.

[mustard7]

So are you saying that because the car was VT’d, that it must have been a loan secured on the car?
im going to have a phone call with them today... I will make the time.