VT Issues

[kezyvette]

R0b I have finally finished my draft letter however I am not sure, particularily about the end bit regarding the GAP insurance.
Also, in one of the e-mails that I have, they claim that the VAPs are 'contractual' - my understanding was that legislation stating a minimum of 50% of the total cost (which includes the VAPs) takes precedence?
Do I have a defence of misrepresentation in terms of the sale of the GAP insurance?


Anyways, here it is:



I am writing further to your e-mail dated 05/12/2018.
In that letter, you mentioned that the hire-purchase agreement refers to excess mileage being charged on a pro-rated basis in the event that the agreement ends early. Whilst I do not dispute this, you will know that the agreement is subject to and regulated by, the Consumer Credit Act 1974 (“CCA 1974”). Therefore, the hierarchy of laws dictate that Acts of Parliament (in this case the CCA 1974) takes precedence over any common law contract. This is further clarified in Section 173 of the CCA 1974 confirming that contracting out of the Act is strictly forbidden and any attempts to do so will render the relevant contractual provision void and unenforceable.
In a recent County Court case between Mercedes-Benz Financial Services (UK) Limited v Cahalane (Willesden County Court, 26 February 2018) District Judge Ellington (as she was then) held that excess mileage charges were not recoverable. Her reasons included, that the definition of total price excluded the recoverability of these charges, the statement “Termination: Your Rights” was explicitly clear that liability was limited and, in any event, she was bound by the Court of Appeal decision in Julian Hodge Bank v Hall [1997] EWCA Civ 1852, which established that “total price” excludes compensation and damages for breach of the agreement for the purposes of calculating the total price payable.


Furthermore, your interpretation that misrepresentation " allows the business to recover costs associated with unexpected depreciation in the event that the customer has exceeded the mileage allowance at any point in the contract and terminates early" is not correct. A claim for misrepresentation requires there to be a pre-contractual statement of fact by the statement maker which is relied upon and to induce the recipient of the statement to enter into the contract and, but for that statement, the recipient would not have entered into the contract at all. I do not accept that the mileage I said I would cover over the term of the agreement was a misrepresentation and my reasons are threefold:

1. At the time of speaking to your sales agent, I was asked to estimate the number of miles that I would expect to be driving. I therefore gave an honest opinion of the number miles I might cover on an annual basis; the mileage stated was both a statement of opinion and an estimate of a future intention. It is well established in law that neither statements of opinion nor estimated future intentions are considered to be a statement of fact.

2. The stated mileage was not in fact a representation rather it was a statement which was intended by both sides to be incorporated into the contract as a contractual term. Indeed, this is further verified by the fact that annual mileage has been clearly stated on the first page of the contract. The Courts have, on several occasions, confirmed that a statement which is incorporated into the contract, is unlikely to be considered a representation.

3. Notwithstanding the above, the stated mileage was not something which would have induced FCA to enter into the contract nor was it material. On the contrary, the decision to enter into the contract was largely the result of a credit check carried out by FCA to determine whether or not I would be capable of meeting the monthly repayments.

In the circumstances, I do not believe that your claim for excess mileage charges under the common law of misrepresentation has any force and my position remains the same, namely that the charges are not recoverable by FCA. If, however, should you choose to pursue this matter, then that is entirely your own prerogative but I am fully prepared to defend any claim brought against me.

With regards to liability in relation to the alleged outstanding balance for excessive damage to the vehicle, this is denied.

The vehicle was maintained in a reasonable condition throughout the period of the agreement and therefore such damage charges you are claiming would amount to fair wear and tear; the vehicle does not need to be returned to you in any better condition other than a reasonable one. Photographic evidence was taken prior to the vehicle being transferred to you which clearly shows that the vehicle was in a reasonable condition. The onus is on you to prove that the alleged damage caused was more than reasonable fair wear and tear.

In any event, such sums you are alleging to be owed may only be recovered by a court order only and should you wish to pursue this matter in court, your application will be strongly defended.

Regarding the sum for the GAP insurance. I would like to make a formal complaint about this. I was not provided with a personal copy of the agreement (I had to contact FCA to request this myself on 19/9/2018). I never saw a copy of any terms and conditions that were allegedly supplement to the agreement let alone be provided these at the time of signing the agreement. The GAP insurance was also sold to me as an insurance to cover the difference in price between the value of the vehicle and the outstanding amount of finance in the event of the vehicle being deemed a total loss during an accident for the duration of the finance agreement. I would have never agreed to have the ‘insurance’ for less than the duration of the finance agreement so was very surprised to find, upon contacting the provider of the GAP insurance that it expired in 2016 after only 1 year. Likewise, when I have tried to contact someone at FCA to get more information on this I have been given numerous figures which have been different on a number of occasions – such as £219.01 on 19/09/2018 at 16:59, £218.96 on 20/9/2018 at 12:00 and £219.44 on 02/10/2018 at 08:57 – all of which I have proof of in writing.

I trust that this response clarifies where I stand and I do not expect there to be any need for further correspondence except where legal proceedings have commenced.


Yours faithfully,

[R0b]

Most of it looks fine to me, but let me see if I can expand and improve on the GAP argument - I'll try to get back to you in the next 24 hours once I've had time to mull it over.

Also if you are going to make a formal complaint, you should make a complaint generally as opposed to just related to the GAP insurance.

[kezyvette]

Great, thank you very much R0b !!

[R0b]

Do you have a copy of the clause headed "separate agreements" that you can upload? It doesn't seem to be in the uploaded you did in your first post.

[kezyvette]

Hi R0b

Where did you see the 'separate agreements' clause that you mentioned to help me have a look?

I think I have uploaded everything I have - as I said previously when I took out the finance I was never given my own copy of the agreement. I also never saw a copy of any supplement Ts&Cs that FCA have claimed support the orignal agreement. They tried to send me a copy of these in e-mail but these were dated August or September 2018 so were obviously not in existence when I signed the agreement back in 2015.

Thanks again, I REALLY appreciate this!

[R0b]

The above paragraph is in the first document top right hand corner. If you never received the original terms and conditions you may have an argument that the terms weren't incorporated or if they were, it was unfair to incorporate terms not knowing what they were. I've had a scan through earlier threads with similar issues and picked up on (what I think is) the relevant provisions as per below.




In the process of knocking something up which might put you in a strong position for them to back down but I'll explain in my next post when I put up an example response.

[R0b]

So basically, the example below is how you might approach the GAP insurance issue. It should be relatively straightforward read but something you may not have come across before is repudiatory breach and rather than try to explain it here, I would suggest you read this link (pages 2-3) to get a basic understanding of what repudiatory breach means.

It will probably need tidying up and incorporated into your response, but you should definitely make clear and point out the fact that they have not supplied you with the original terms and conditions, only the latest version. You might want to consider making a CCA request which requires them to supply a copy of the agreement plus the original terms as well as any updated terms.

----------------------------------------------------------------

Turning to the issue of the outstanding balance in respect of the GAP insurance (the “GAP agreement”), the sales agent at the time explained to me that the insurance policy would cover me for the course of the hire-purchase period, hence the relatively large sum I agreed to pay for the policy. However, I have since contacted the insurance provider and to my surprise, I was informed that the GAP insurance policy had expired in 2016, only one year after I entered into the hire-purchase agreement. As well as failing to provide any documentation about the policy, the sales agent never explained to me that the GAP insurance would only cover me for the first 12 months of the hire-purchase agreement.

The term of the insurance policy was a fundamental piece of information that ought to have been disclosed to me at the time and the absence of that influenced my decision in taking out the policy. Had I known that I would not have been covered for the full period, I would have never agreed to take out the policy in the first place and instead would have sourced my own GAP insurance covering me for the whole period of the hire-purchase. In my opinion, this is not only a clear misrepresentation, but the omission of the policy term when explaining the key details of the policy is also a breach of the Consumer Protection from Unfair Trading Regulations 2008 for which you are deemed to be responsible.

Even if, as you suggest, the GAP agreement is deemed a separate agreement, I was never provided with any pre-contractual documentation or terms and conditions relating to the GAP insurance prior to or at the time of signing the hire-purchase agreement. Under section 55 of the CCA 1974, you are required to provide me with pre-contractual documentation (as further described in Consumer Credit (Disclosure of Information) Regulations 2010). Failing to comply with this requirement means that the agreement is improperly executed and may only be enforced by an order of the court (see section 65 of the CCA 1974).

Notwithstanding all of the above, on the assumption that the hire-purchase and GAP agreement are two separate agreements, I should point out that I have only exercised my right to terminate the hire-purchase agreement under Section 99 of the CCA 1974. At no point did I indicate or allude to the fact that the GAP agreement would also be terminated at the same time. On the contrary, you have decided to unilaterally accelerate the repayment of the GAP insurance money and demand that I immediately repay the unpaid balance. Your conduct and actions imply that you are:

(a) depriving me the right (as agreed under the arrangement) to continue to repay the outstanding GAP insurance by instalments; and/or

(b) treating the GAP agreement as having been terminated.in breach of the terms and conditions so much so that your actions amount to a wrongful termination of the agreement.

Furthermore, I have reviewed the terms and conditions (which are the 2018 terms and conditions and not the terms that I originally signed up to) and there is nothing to suggest that you have the right to terminate the GAP agreement for convenience. For these reasons, you have are in repudiatory breach and I am electing to accept your repudiatory breach and terminate the GAP agreement. The effect of this means that all obligations under the agreement are discharged, namely the outstanding sums due that you claim to be owed.

[kezyvette]

Hello R0b

Thank you very much for this - no, I never even received an agreement, let alone any terms and conditions.

That's great. I will encorporate my letter with these and post back up if that's okay?

Also, when you said make a complaint in general, what should I include? Should I start with making a complaint and list my issues after?

Thanks!!

[kezyvette]

Okay, I hope it is okay to check once more, R0b - I've put it all together and neatened it up a bit. Hope this is okay and I'll get it sent off today.



Dear [name],

I am writing further to your e-mail dated 05/12/2018 and would like to raise a number of complaints, outlined below.
In that letter, you mentioned that the hire-purchase agreement refers to excess mileage being charged on a pro-rated basis in the event that the agreement ends early. Whilst I do not dispute this, you will know that the agreement is subject to and regulated by, the Consumer Credit Act 1974 (“CCA 1974”). Therefore, the hierarchy of laws dictate that Acts of Parliament (in this case the CCA 1974) takes precedence over any common law contract. This is further clarified in Section 173 of the CCA 1974 confirming that contracting out of the Act is strictly forbidden and any attempts to do so will render the relevant contractual provision void and unenforceable.
In a recent County Court case between Mercedes-Benz Financial Services (UK) Limited v Cahalane (Willesden County Court, 26 February 2018) District Judge Ellington (as she was then) held that excess mileage charges were not recoverable. Her reasons included, that the definition of total price excluded the recoverability of these charges, the statement “Termination: Your Rights” was explicitly clear that liability was limited and, in any event, she was bound by the Court of Appeal decision in Julian Hodge Bank v Hall [1997] EWCA Civ 1852, which established that “total price” excludes compensation and damages for breach of the agreement for the purposes of calculating the total price payable.




Furthermore, your interpretation that misrepresentation " allows the business to recover costs associated with unexpected depreciation in the event that the customer has exceeded the mileage allowance at any point in the contract and terminates early" is not correct. A claim for misrepresentation requires there to be a pre-contractual statement of fact by the statement maker which is relied upon and to induce the recipient of the statement to enter into the contract and, but for that statement, the recipient would not have entered into the contract at all. I do not accept that the mileage I said I would cover over the term of the agreement was a misrepresentation and my reasons are threefold:

1. At the time of speaking to your sales agent, I was asked to estimate the number of miles that I would expect to be driving. I therefore gave an honest opinion of the number miles I might cover on an annual basis; the mileage stated was both a statement of opinion and an estimate of a future intention. It is well established in law that neither statements of opinion nor estimated future intentions are considered to be a statement of fact.

2. The stated mileage was not in fact a representation rather it was a statement which was intended by both sides to be incorporated into the contract as a contractual term. Indeed, this is further verified by the fact that annual mileage has been clearly stated on the first page of the contract. The Courts have, on several occasions, confirmed that a statement which is incorporated into the contract, is unlikely to be considered a representation.

3. Notwithstanding the above, the stated mileage was not something which would have induced FCA to enter into the contract nor was it material. On the contrary, the decision to enter into the contract was largely the result of a credit check carried out by FCA to determine whether or not I would be capable of meeting the monthly repayments.

In the circumstances, I do not believe that your claim for excess mileage charges under the common law of misrepresentation has any force and my position remains the same, namely that the charges are not recoverable by FCA. If, however, should you choose to pursue this matter, then that is entirely your own prerogative but I am fully prepared to defend any claim brought against me.

With regards to liability in relation to the alleged outstanding balance for excessive damage to the vehicle, this is denied.

The vehicle was maintained in a reasonable condition throughout the period of the agreement and therefore such damage charges you are claiming would amount to fair wear and tear; the vehicle does not need to be returned to you in any better condition other than a reasonable one. Photographic evidence was taken prior to the vehicle being transferred to you which clearly shows that the vehicle was in a reasonable condition. The onus is on you to prove that the alleged damage caused was more than reasonable fair wear and tear.

In any event, such sums you are alleging to be owed may only be recovered by a court order only and should you wish to pursue this matter in court, your application will be strongly defended.




Turning to the issue of the outstanding balance in respect of the GAP insurance (the “GAP agreement”), the sales agent at the time explained to me that the insurance policy would cover me for the course of the hire-purchase period, hence the relatively large sum I agreed to pay for the policy. However, I have since contacted the insurance provider and to my surprise, I was informed that the GAP insurance policy had expired in 2016, only one year after I entered into the hire-purchase agreement. As well as failing to provide any terms and conditions headed ‘Separate Agreements’ (or even my own copy of the agreement), the sales agent never explained to me that the GAP insurance would only cover me for the first 12 months of the hire-purchase agreement.

The term of the insurance policy was a fundamental piece of information that ought to have been disclosed to me at the time and the absence of that influenced my decision in taking out the policy. Had I known that I would not have been covered for the full period, I would have never agreed to take out the policy in the first place and instead would have sourced my own GAP insurance covering me for the whole period of the hire-purchase. In my opinion, this is not only a clear misrepresentation, but the omission of the policy term when explaining the key details of the policy is also a breach of the Consumer Protection from Unfair Trading Regulations 2008 for which you are deemed to be responsible.

Even if, as you suggest, the GAP agreement is deemed a separate agreement, I was never provided with any pre-contractual documentation or terms and conditions relating to the GAP insurance prior to or at the time of signing the hire-purchase agreement. Under section 55 of the CCA 1974, you are required to provide me with pre-contractual documentation (as further described in Consumer Credit (Disclosure of Information) Regulations 2010). Failing to comply with this requirement means that the agreement is improperly executed and may only be enforced by an order of the court (see section 65 of the CCA 1974).

Notwithstanding all of the above, on the assumption that the hire-purchase and GAP agreement are two separate agreements, I should point out that I have only exercised my right to terminate the hire-purchase agreement under Section 99 of the CCA 1974. At no point did I indicate or allude to the fact that the GAP agreement would also be terminated at the same time. On the contrary, you have decided to unilaterally accelerate the repayment of the GAP insurance money and demand that I immediately repay the unpaid balance. Your conduct and actions imply that you are:

(a) depriving me the right (as agreed under the arrangement) to continue to repay the outstanding GAP insurance by instalments; and/or

(b) treating the GAP agreement as having been terminated.in breach of the terms and conditions so much so that your actions amount to a wrongful termination of the agreement.

Furthermore, I have reviewed the terms and conditions (which are the 2018 terms and conditions and not the terms that I originally signed up to) and there is nothing to suggest that you have the right to terminate the GAP agreement for convenience. For these reasons, you are in repudiatory breach and I am electing to accept your repudiatory breach and terminate the GAP agreement. The effect of this means that all obligations under the agreement are discharged, namely the outstanding sums due that you claim to be owed.



I trust that this response clarifies where I stand and I do not expect there to be any need for further correspondence except where legal proceedings have commenced.


Yours faithfully,






Many thanks in advance (again!!)

[R0b]

Morning, sorry I haven't got back to you any sooner. Letter looks fine but in terms of a complaint you could add the following to the beginning and the end of your letter (if you haven't already sent it off).

I am writing to you because I wish to make a formal complaint in accordance with your complaints policy and the FCA Rules. My complaint is in relation to the termination of the hire-purchase agreement whereby you are claiming that I owe ....

I understand that you have up to 8 weeks to investigate my complaint and provide me with your final decision. If I am not satisfied with your response or you fail to reach a decision within 8 weeks of receiving my complaint, I shall be entitled to pursue my complaint to the Financial Ombudsman.

I would appreciate if you could acknowledge this letter within the next 14 days, as well as providing me with a copy of your complaints policy.
I look forward to hearing from you in due course.

[kezyvette]

Hi R0b

Thank you so much for the guidance with this - I amended my letter as you suggested in your previous post and sent this off on January 2nd (a little later than I was hoping but Christmas just seemed to get in the way!).

Do you suggest a course of action if I don't recieve a response within the time period or would you suggest just leaving the situation? It was 14 days on Wednesday and I haven't heard anything (have been checking my inbox frequently over the last week!)

Thanks

[R0b]

Well as you are making it a formal complaint, they should acknowledge and provide a response within 8 weeks. If they don't then you are free to take it further to the Financial Ombudsman.

As it has been a couple of weeks without response you could try sending an email to their customer service / complaints email address and attaching the letter you sent and explaining that you've received no acknowledgment. You could remind them that they have a further 6 weeks to respond otherwise you will take it further to the Financial Ombudsman.

[kezyvette]

R0b Good morning

Sorry it has been a little while with no update. I never heard back from FCA. This Wednesday will be 8 weeks go the day that I sent the letter above. I was wondering what I do regarding this matter.

I didn’t receive any acknowledgement or further correspondence from FCA. Do I just assume that they have dropped the matter until I hear anything? This doesn’t seem right legally but given I have contacted them and they have failed to reply in 8 weeks it seems as though they’ve lost interest? (wishful thinking I know!)

Thanks!!

[R0b]

Hello

Thanks for the update. I guess this is one of those situations where you may need to decide whether you continue to make your complaint to the Financial Ombudsman or simply wait it out and see. Strictly speaking, FCA have not reported back with their final decision as to your complaint and in doing so, you could say that they are in breach of their obligations under the Conduct Rules.

If they aren't keen on getting back to you, it may be well that they are deciding to drop the case, but only FCA would know this. I suppose one way of finding out is to submit a subject access request to FCA and get copies of all of your account including any notes recorded. That should give you an idea of what stage they are at.

Its up to you what you want to do, but as it stands and if it were me, I might be inclined to sit it out and see what happens, you might not want to poke the bear.

[Endeavorer]

R0b I have finally finished my draft letter however I am not sure, particularily about the end bit regarding the GAP insurance.
Also, in one of the e-mails that I have, they claim that the VAPs are 'contractual' - my understanding was that legislation stating a minimum of 50% of the total cost (which includes the VAPs) takes precedence?
Do I have a defence of misrepresentation in terms of the sale of the GAP insurance?


Anyways, here it is:



I am writing further to your e-mail dated 05/12/2018.
In that letter, you mentioned that the hire-purchase agreement refers to excess mileage being charged on a pro-rated basis in the event that the agreement ends early. Whilst I do not dispute this, you will know that the agreement is subject to and regulated by, the Consumer Credit Act 1974 (“CCA 1974”). Therefore, the hierarchy of laws dictate that Acts of Parliament (in this case the CCA 1974) takes precedence over any common law contract. This is further clarified in Section 173 of the CCA 1974 confirming that contracting out of the Act is strictly forbidden and any attempts to do so will render the relevant contractual provision void and unenforceable.
In a recent County Court case between Mercedes-Benz Financial Services (UK) Limited v Cahalane (Willesden County Court, 26 February 2018) District Judge Ellington (as she was then) held that excess mileage charges were not recoverable. Her reasons included, that the definition of total price excluded the recoverability of these charges, the statement “Termination: Your Rights” was explicitly clear that liability was limited and, in any event, she was bound by the Court of Appeal decision in Julian Hodge Bank v Hall [1997] EWCA Civ 1852, which established that “total price” excludes compensation and damages for breach of the agreement for the purposes of calculating the total price payable.


Furthermore, your interpretation that misrepresentation " allows the business to recover costs associated with unexpected depreciation in the event that the customer has exceeded the mileage allowance at any point in the contract and terminates early" is not correct. A claim for misrepresentation requires there to be a pre-contractual statement of fact by the statement maker which is relied upon and to induce the recipient of the statement to enter into the contract and, but for that statement, the recipient would not have entered into the contract at all. I do not accept that the mileage I said I would cover over the term of the agreement was a misrepresentation and my reasons are threefold:

1. At the time of speaking to your sales agent, I was asked to estimate the number of miles that I would expect to be driving. I therefore gave an honest opinion of the number miles I might cover on an annual basis; the mileage stated was both a statement of opinion and an estimate of a future intention. It is well established in law that neither statements of opinion nor estimated future intentions are considered to be a statement of fact.

2. The stated mileage was not in fact a representation rather it was a statement which was intended by both sides to be incorporated into the contract as a contractual term. Indeed, this is further verified by the fact that annual mileage has been clearly stated on the first page of the contract. The Courts have, on several occasions, confirmed that a statement which is incorporated into the contract, is unlikely to be considered a representation.

3. Notwithstanding the above, the stated mileage was not something which would have induced FCA to enter into the contract nor was it material. On the contrary, the decision to enter into the contract was largely the result of a credit check carried out by FCA to determine whether or not I would be capable of meeting the monthly repayments.

In the circumstances, I do not believe that your claim for excess mileage charges under the common law of misrepresentation has any force and my position remains the same, namely that the charges are not recoverable by FCA. If, however, should you choose to pursue this matter, then that is entirely your own prerogative but I am fully prepared to defend any claim brought against me.

With regards to liability in relation to the alleged outstanding balance for excessive damage to the vehicle, this is denied.

The vehicle was maintained in a reasonable condition throughout the period of the agreement and therefore such damage charges you are claiming would amount to fair wear and tear; the vehicle does not need to be returned to you in any better condition other than a reasonable one. Photographic evidence was taken prior to the vehicle being transferred to you which clearly shows that the vehicle was in a reasonable condition. The onus is on you to prove that the alleged damage caused was more than reasonable fair wear and tear.

In any event, such sums you are alleging to be owed may only be recovered by a court order only and should you wish to pursue this matter in court, your application will be strongly defended.

Regarding the sum for the GAP insurance. I would like to make a formal complaint about this. I was not provided with a personal copy of the agreement (I had to contact FCA to request this myself on 19/9/2018). I never saw a copy of any terms and conditions that were allegedly supplement to the agreement let alone be provided these at the time of signing the agreement. The GAP insurance was also sold to me as an insurance to cover the difference in price between the value of the vehicle and the outstanding amount of finance in the event of the vehicle being deemed a total loss during an accident for the duration of the finance agreement. I would have never agreed to have the ‘insurance’ for less than the duration of the finance agreement so was very surprised to find, upon contacting the provider of the GAP insurance that it expired in 2016 after only 1 year. Likewise, when I have tried to contact someone at FCA to get more information on this I have been given numerous figures which have been different on a number of occasions – such as £219.01 on 19/09/2018 at 16:59, £218.96 on 20/9/2018 at 12:00 and £219.44 on 02/10/2018 at 08:57 – all of which I have proof of in writing.

I trust that this response clarifies where I stand and I do not expect there to be any need for further correspondence except where legal proceedings have commenced.


Yours faithfully,

Hi, do you have an online link to the court judgement; Mercedes-Benz Financial Services (UK) Limited v Cahalane(Willesden County Court, 26 February 2018) District Judge Ellington, and Court of Appeal decision in Julian Hodge Bank v Hall[1997] EWCA Civ 1852,

thanks
Endeavorer