VT Issues

[kezyvette]

Great, thank you very much R0b !!

[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]

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,

[kezyvette]

tobster911 thanks, is this true even if the GAP insurance wasn't explained fully and I was unaware that this was only for a 1 year cover? I never would have taken the cover if I didn't think it was for the duration of the lease, what would be the point?
I also paid ~£1250 deposit. Surely I could argue that this deposit covered the cost of the GAP insurance in full?
Finally I was never shown or given copies of any terms and conditions and did not receive a copy of my own agreement? I had to request this at the time of enquiring about VT.

[tobster911]

Sorry, haven't read through everything, but I know about the £219. This is a separate contract with FCA, and is not liable to VT. The monthly payments you make are made up of the majority is the car, and a small amount for the VAPs. On mine, it was £195 for the car, and £12 for the VAPs. The VT is only applicable for the car, so you do, unfortunately, need to pay for the VAPS, as you've only been paying a few £££ per month for this.

[kezyvette]

Hi R0b

Just putting the finishing touches to my letter and then I will update.

However, I have just been doing some internet searches and found the car in question for sale and one of the images of it shows damage that I am being expected to pay for. I was wondering where I stand on this?

Thanks

Kerin

[kezyvette]

Thank you very much R0b - I will start to put a response together now from the templates you have suggested and post back when it is finished. This has been really helpful.

With regards to the damage charges, am I right in thinking that I can address these in terms of the BVRLA using guidelines that are set out for commercial vehicles and it is not reasonable to hold a vehicle used for personal use to the same standard and that by having the work done it has put the vehicle in a condition that is better than 'reasonable'? I think I saw a few people writing to this effect in previous threads?

Many thanks in advance!!

[R0b]

In the templates thread, there is an updated response in relation to excess mileage charges - it's letter number 2 I think at the top.

The response about common law of misrepresentation is a template response which FCA don't really have a clue about and are clutching at straws. They responded to another person who exercised their VT right a while ago with the same reply.

There's an example response to that in the thread (click here) at post #11 and their response at post #13.

You might be best combining both those letters as a robust response and if you need any feedback, post up your draft here for comment.

[kezyvette]

Hello again R0b

Some update - I decided to use your templates (I put a few together to address a number of things that I was disputing)... This was my e-mail to them on 21/11/2018 having emailed on 2 other occasions and not had a reply:


'Dear Sir/Madam,

Re: Voluntary Termination

Agreement Number:
Vehicle Registration:

I am writing to you with reference to the above matter and your letter dated 24/10/2018 (to which I have replied on 2 separate occasions - 5/11/2018 and 12/11/2018 and heard nothing back). Please note that liability in relation to the alleged outstanding balance for excessive damage to the vehicle, collection fees and excess mileage 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.

I am under no obligation to pay any fees for excess mileage or collection of the vehicle. The Consumer Credit Act 1974 explicitly states that, my liability under the agreement is limited to half the total amount payable and any terms under the agreement which imposes additional liability directly or indirectly is strictly prohibited by the Act.

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.

Please confirm by return that you agree this matter is now closed.

Yours faithfully, '




I then received an e-mail back about an hour later that was in reply to my second e-mail to them on 12/11 when I requested a copy of the damages report. They attached this report that breaks down the damages and charges with photographs however none of the photographs are big at all and you are unable to enlarge any of them.


I then received an e-mail on 5/12/2018 as follows:

'Dear ,



Thank you for your email.



Firstly our apologies for the delay in your dispute case.



We have reviewed the travelling conditions between your address & the auction site, due to the time taken we have removed the collection fee.



In relation to the excess mileage please note the Common Law of 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. As such we are within our
rights to recover the loss associated with this based on the fact that they potentially misrepresented their intended use of the vehicle. This confirms that we are eligible
to charge this for VT customers. Exceeding the agreed mileage allowance can be seen to be the customer contravening the agreement to take care of the goods as
agreed. Therefore we are able to charge consumers if they have not adhered to their mileage allowance and have breached the terms of the finance company as well as
law of misrepresentation.





You have contractual arrears of £219.44 for the outstanding balance for the Value added products (VAP’s) you purchased via a straight loan. Your Finance

Agreement has two contracts the first is a hire Purchase Loan for purchasing the vehicle, the latter a straight loan to purchase VAP’s, in both instances

FCA paid the dealership upfront, the dealership would then pay the VAP’s provider (Insurance/Warranty company).



On the first page of your Finance agreement it stated that for each monthly payment of £205.56 it would be split across the two contacts as (£198.99 / £6.57 ). The

straight loan is not covered by the VT legislation & the O/S balance becomes due if a customer chooses to VT.











Your VT request letter stated that VAP’s need to be settled.













Prior to starting the VT, you were sent a VT Request letter that stated if the vehicle is returned then the inspector would use the
BVRLA guidelines to determine damages.



The BVRLA set the inspection guidelines, the auction houses set the prices, it’s not in their interest to inflate prices as they want the best price at sale.



Issues should be rectified prior to returning the vehicle.



We have reviewed the inspection report (attached), the Front Screen charge has been removed.



Dents on body panels exceeding 10mm or paintwork exposed are not permitted by the BVRLA.

Scratches/Scuffs on body panels exceeding 25mm or paintwork exposed are not permitted by the BVRLA.

Scuffs on wheel trims exceeding 50mm (whole circumference) or any damage to spokes are not permitted by the BVRLA.

The BVRLA guidelines state the costs maybe the actual repair costs or the loss of value cost.



As a goodwill gesture we previously removed £180.39 from your charges.



Your O/S balance is £590.14.





What Next



You may contact our collection function (0333-207-5582) to pay by debit card, request a repayment plan or alternately make
a bank transfer using the details below:



Payee:
Account number:
Sort code:
Reference:



If you feel that we won’t be able to reach a satisfactory resolution then you may contact the conciliation service of the BVRLA by visiting
their website below:

http://www.bvrla.co.uk/

“We are members of the British Vehicle Rental and Leasing Association (BVRLA). All vehicles returned to FCA Automotive are inspected in line with the British Vehicle Renting and Leasing Association fair wear and tear guidelines. This ensures that all customers are treated fairly with regard to any potential charges upon the vehicle return. Unresolved complaints may be referred to them by visiting their website www.bvrla.co.uk”



The BVRLA is approved by Government as a Consumer ADR body under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015.



Kind regards, '



I was just looking to get your opinion of this. One of the parts of damage I accept is more than 'reasonable' for a 3 year old car and I would be willing to pay this damage in the format of your templates I have seen.

Many thanks in advance.

[R0b]

I think all you can do is make a formal complaint to FCA about what you've said and challenge the costs being charged, especially the GAP insurance. You should be pointing out to them that you expected the GAP insurance to cover the whole term of the hire purchase which is the point of taking it out and in fact it was for only one year. Therefore you feel you have been misrepresented by the sales advisor at the time who was acting on FCA's behalf. You can also point out that at ni point during the Agreement did FCA send the contract to you and so the agreement has been improperly executed which as a result, is not enforceable unless a court orders otherwise.

you also need to decide whether you are challenging the rest of the fees too.

[kezyvette]

R0b I also forgot to say, I took out the agreement on 14/11:2015 with mileage of 8,000 a year. When I returned the vehicle on 8/10/2018 it had a recorded mileage of 24,828 so part of the £550.99 is £0.06x1,495 = £89.70

[kezyvette]

Thanks for your reply R0b - addressed your points above...

[kezyvette]

Hello, thank you for your reply.

It there another way that I can upload the emails to make them clearer?

The vehicle is coming up to 3 years old and I have been the sole owner.

Yes, that’s right - £219.44 for ‘multipart settlement’ for GAP and then £550.99 for 6 bits of ‘damage’, excess mileage and a collection fee.

I appreciate that one bit of damage could be classed as beyond reasonable care/wear and tear as someone caused a small scratch to the car while it was parked and I was not present so was unable to contact the owner of the other car that caused the damage. I did wonder about offering to pay the £48 they have claimed as a result of this piece of damage??

I took numerous (50+) photographs of the condition of the vehicle when I stopped using it prior to it being collected and I don’t feel that the damage that they have listed such as scuffs to alloys and a chip on the windscreen would be more than reasonable wear and tear for a 3 year old vehicle.

I didn’t receive any paperwork from Fiat at the time of taking out the finance agreement for the finance agreement or for a separate agreement for the GAP. The GAP is shown on the agreement that I have since been sent by FCA so could this be argument for them being not multiple agreement?

I contacted the GAP company when this first began and the insurance was only for a year so expired in 2016 which was a surprise as it was my understanding that GAP insurance lasts for the duration of the finance agreement.

What I find odd is that at no time have FCA been able to clearly explain where the sum of £219 ish comes from and each time I ask I get different sums!

Thanks,

Kerin

[R0b]

Hello

I'm afraid I can't see some of those emails as they aren't enlarged enough but the gist of your issue is that you are being charged £219.44 for GAP insurance and then £550.99 for supposed vehicle damage (and collection fees?).

First of all, you've not mentioned how old the vehicle is and what the current mileage is or whether you are the sole owner. It would be helpful to know this background information as it can support your argument.

Dealing with the £550.99 fees, I think you need to have a break down of what these charges are for and it is not unreasonable to ask FCA a itemisation of the charges so you can review them in order to establish whether you agree or not. It is not right to say that charges for vehicle damage are irrecoverable because if you haven't took reasonable care of it, then FCA are entitlted to some compensation. It's subjective and it's certainly not automatic as FCA have to prove that (a) the damage was beyond reasonable wear and tear and (b) that the damaged occurred whilst it was in your possession.

The latter is almost always difficult for finance companies to prove where the vehicle is second hand because none of them take photographs prior to it behing handed over to you. Therefore, you could simply argue that it is up to them to prove the damage happened on your watch as opposed to a previous owner. This is why you should always take photographs at the beginning of the hire period and also at the end so you can compare and prove what damage was done (if any) by you.

Collection fees however, are not recoverable as it goes above and beyond your limited liability when you exercised your right to VT the agreement.

The GAP insurance charges are a little more trickier and very difficult to understand in practice and whether or not you are required to pay the fees. A very simple explanation would be something like this, all consumer credit regulated agreements requires companies to supply certain pre-contractual information prior to entering into the agreement and failing to do so means the agreement is improperly executed and therefore unenforceable unless a court orders otherwise.

Where multiple products are amalgamated into one single document, the question is whether the transaction (not the credit itself) falls into two separate categories. What I mean by separate categories, is restricted use and unrestricted use credit or running account credit or a fixed sum credit. If the two are considered separate, then Section 18 of the Consumer Credit Act says that each of the products would require separate documentation e.g. one set of documentation for the hire purchase credit and another set for the GAP insurance. Arguably, the GAP and HP credit are fixed sums of credit and are also for a restricted purpose so applying the above, it would appear that the transaction is not a multiple agreement and as such, the limitation of liability under S.100 of the CCA kicks in and means you should not be liable for the GAP insurance. It is also possible that a Court might decide that they are separate agreements in which case FCA would need to provide the required documentation and pre-contract information for the GAP insurance as well as the HP credit, otherwise the GAP insurance arrangement is unenforceable - I am assuming you never received separate pre-contractual documentation for GAP insurance?

As you can see, the vehicle and collection fees are relatively straight forward but the GAP insurance is more difficult to answer. So really its up to you to decide whether you want to defend your position or you could perhaps make an offer to settle that amount either partially or in full. Also if you know the GAP provider you could contact them and seek a pro-rated refund to offset the amount being claimed.

Hope that helps.

[kezyvette]

R0b , pt2537 and advice would be greatly appreciated!!!

Thanks in advance!