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unwittingly bought a used car with outstanding finance

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  • unwittingly bought a used car with outstanding finance

    Hi, I bought a car at £3000 via bank transfer in Feb from a private seller "Mr C", and was being taken away yesterday on my private drive.

    key points:
    - I did not carry out a HPI check before purchasing
    - I was not aware of the finance situation with the car, as Mr C verbally told me it is not under finance
    - finance company verbally informed me that their hire purchase agreement is with Mr C
    - 2012 peugeot 5008, 75000 mileage, no service history, 1 key
    - was advertised as £3500, after a few days reduced to £3300, but some damages/dents/scratches missing parts are found during test drive, i negotiate for a £300 discount
    - Mr C seems to have disappeared as I cant even get connected with him

    In May, the managing director of the finance company came and knocked on my door asking why his car is being parked on our drive, claiming the vehicle belongs to them, no solid paperwork was provided apart from asking us to check the HPI for proof of ownership, and i warned them not to get near my land without my permission again.
    I have never came across HPI, I then googled online regarding HPI and bought car with outstanding finance; what i learnt from google is that HPI is not a obligation before buying car (but of course a lesson from this time i will always remember to do a HPI check). I also came across the phrase "good faith/title" under hire purchase act, etc.

    After a few email communications, they provided a HPI report showing the vehicle is under finance with them, i gave them details about where & when & whom & facebook advert of the car, and bank statement as payment receipt.

    They then made a decision that they do not admit me as the legitimate buyer as i bought the car way below market value (they said the vehicle worths over £6K), and since I lived in a decent area therefore i should have a high earning job so i should be an intelligent man who should be able to identify this deal is too good to be true (totally ridiculously, right?). Therefore, asking me to pay him £6K for their financial loss or else bring us to court.

    I replied with some online car valuation that i got it from AA and WeBuyAnyCar, the market value of the vehicle is around £2200, as well as some car sale advertisements of same made on facebook which is being sold at similar price, proving that the vehicle is not bought way below market value as they have suggested. They rejected all our proof just by saying it is irrelevant, and order me to either return the car to them, or bring us to court. I have contacted Citizen Advice that we are the owner of the vehicle and if they want to repossess the vehicle they need to have court order, or even if they want to bring us to court we should receive Letter Before Action, so we wait for the papers to come.

    Until yesterday morning while i was at work, they took away the vehicle by forcing an unknown key to get into the car and hack into the car's computer system then drove it away from my private drive (my CCTV has captured it), and sent an email 20 mins later informing me that they have exercise their rights as owner to repossess the car. They came and knocked my door in the evening to return my belongings, and acting arrogant by saying if I am not happy with their action go sue them. In my opinion, if they are so sure that they are the owner why don't they come and knock my door to ask for car key but instead go through back door using doggy method.

    Called police they said it is civil matters so wont take action, called Citizen Advice ask me to contact solicitor, called Financial Ombudsman they wont help, called legal team from insurance company saying market value doesn't apply in private sale.

    I really don't know what can I do at the moment, feeling lost, cant eat and cant sleep properly at all, I really hope no one will ever fall into this kind of issue again as it is really frustrating.
    Any comment/advice, or even recommendation of solicitor would be highly appreciated.


    R0b
    Last edited by moliu3000; 11th July 2019, 18:58:PM.
    Tags: @r0b

  • #2
    First of all, please let us know the name of the finance company so we can establish who we are dealing with. It sounds like you've already done some homework on this because you've identified that there is no legal obligation to carry out a HPI check on a vehicle concerning a private sale. Equally, section 27 of the Hire Purchase Act 1964 affords protection to innocent buyers who have in good faith purchased goods subject to hire purchase - this is known as the exception to the general rule that a person cannot transfer title to goods that they don't own.

    Can you confirm whether you have legal expenses insurance that covers you for this sort of dispute and does it include a solicitor acting on your behalf or is it limited to a legal helpline? As to whoever you had spoken to about the market value not applying in a private sale, I don't think they have their head screwed on properly (or that they are clearly unqualified or lack the legal knowledge) because that's not as a general rule correct.

    It's well established and has been for centuries that the normal measure of damages where someone has deprived another of their goods, is to compensate the injured party for their loss. That loss would be the market value of the goods assessed at the time of the taking of the goods because that's a representation of your loss. It is also a general rule that any consequential losses flowing from the loss of the goods are also recoverable.

    The cause of action for your claim against the finance company is conversion (there is also trespass to goods but that is less serious than conversion and only covers minor breaches). The tort of conversion covers a number scenarios with one of them being conversion by taking possession. The elements you are required to prove is: (1) an unauthorised person (2) deliberately took possession of the goods (3) with the intention of excluding the true owner of possession.

    Seems to me that based on what you;ve said, you have all those elements satisfied. Do you have any written correspondence from the finance company? The onus is on them to prove that you knew that the car was on finance prior to agreeing to purchase it - that is a rather high hurdle to pass in all reality, especially where the seller has gone off grid.

    So, now that the finance company has possession, your only real recourse is probably to issue a claim and take them to court over it. If you instruct a solicitor the case is likely to land on the small claims track meaning legal fees are not recoverable. So any use of a solicitor means it will come out of your own pocket and posibly cost you more than you are claiming. Your alternative is to double check any insurance to see if you have legal expenses cover and utilise that or finally, to go it alone and run the claim yourself.





    Check out some useful guides below

    A guide to voluntary termination
    Seting aside a CCJ
    Completing an N180 Form

    - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
    LEGAL DISCLAIMER
    Please be aware that this is a public forum and is therefore accessible to anyone. The content I post on this forum is not intended to be legal advice nor does it establish any client-lawyer type relationship between you and me. Some of the content I post may include example wording, letters, or other similar responses but they are intended purely for informational and educational purposes. Using some or all of the content I post may fail to meet your needs that is specific to your situation. Therefore any use of my content is at your own risk and I cannot be held responsible in any way. It is always recommended that you seek independent legal advice and you can do this through the Law Society's Find a Solicitor database, by contacting your local Citizen's Advice Bureau or legal advice centres such as LawWorks. You may also be able to seek legal advice from your local university who may run a free (but limited) legal advice clinic to members of the public.

    Comment


    • #3
      the finance company is cls.

      yes i have done many research after this issue started, that's why they did not use hpi as their reason to argue with me after i said it is not a legal obligation, they then accused me for purchasing the car way under market value.

      they claimed the vehicle worth over £6k as based from something called glass guide which seems to me is for dealers/traders/business; while the vehicle is valuated as £2k from webuyanycar and AA, £2.7k to £3.3k from parkers, and £4.5k from autotrader.
      then here comes my question, is there any standard to market value, or how to justify what is the correct market value, as different websites/tools have different quotes; because in my mind i believe if my purchased price falls into the ranges as stated above, it is still regarded as acquire at market value.

      conversion, i think i need to search more about this as i have not heard about it (apologise for my limited legal knowledge).
      but based on the 3 elements regarding conversion (not sure if my understanding is correct),
      1) they are definitely an unauthorised people, as in the 1st communication with them i have asked them not to get near my land without my consent or court order
      2) they bought with them the equipment which is some unknown keys and "hacking system"
      3) they arrived at 0930 as they know i must be at work, they dont even bothered to knock on my door, instead they walked directly to the car
      another question is, who is the owner of the vehicle actually? am i the owner as per hire purchase act?

      all communications with them are by emails, but apart from their hire purchase agreement with mr c which they verbally confirmed to me.
      oh, it just pop up on my mind that on the evening they came to return my belongings they said we have both trusted the wrong man (Mr C), does this indicate they believe i did not aware the car has outstanding finance before purchase? they have never proved me for knowing the finance before purchase, they just keep saying i bought the car way too below market value and as i live in decent area so i should be intelligent enough to know that the deal is too good to be true, therefore i really don't understand based on what grounds do they justify they own the vehicle and can take it anytime they want.

      i believe my legal cover does not cover this kind of dispute, so i either have to pay for a solicitor or do it myself.
      i think i have to take legal actions towards them otherwise i will be left with nothing, if for DIY i need to pay court fees (£150) and hearings (£170) which seems affordable, will check solicitor costs as well.
      so should i send a letter before action to them, then make a claim online and wait for hearing, are these the procedures?

      i remember i have came across sales of goods act saying i have the rights to get a refund from the seller, but is it only applies to those who dont have good title? although i cant get connected with mr c, should i try finding him by knocking on the door where i collected the car?


      * yesterday at noon i sent them an email demanding an immediate return of my belongings which are still in the vehicle, and i reserve rights to claim them any loss for their unlawful actions; no reply until now and no return of belongings as well *

      Comment


      • #4
        Can you provide the full name of the company CLS as there are so many companies with the name CLS in it. I am presuming you are referring to CLS Finance (https://www.clsfinance.co.uk/) but your confirmation that this is the company would be helpful.

        I dont think their sole reliance on the fact that you might live in what could be described as an affluent area (if indeed they are implying that) would be sufficient. Market value of a car depends on a number of things, including its condition, mileage, age etc. And if theres a number of websites suggesting a similar valuation then that could defeat their argument.

        Solicitors fees are likely to be in the region of at least £1,500 - £2000 from start to finish and that's best case scenario. Worst case you might be looking anywhere between £2,000 - £4,000 as an average.

        So if anything, you are probably better off going it alone if you do want to pursue it. Next steps would be to send a letter before action setting out the background, the wrongdoing by CLS and what action is required to resolve the matter.

        One thing that's sprung to mind and I forgot to mention earlier is that you said the car was parked on your property and your CCTV captured this. Under the Consumer Credit Act 1974 a creditor is prohibited from repossessing goods subject to a hire purchase agreement if they are on any premises. I couldnt find any specific definition of what is meant by premises but if you look at the ordinary meaning, it would suggest any land or builds owned by someone.

        As CLS are in breach of this specific provision, you can bring an action against them for that breach. It would be an alternative argument to conversion if that argument failed. If memory serves me correct, I believe there has been case law where a creditor in breach of that provision meant that a court had ordered the return of it - in your case that would assist you if claiming damages.

        If you are serious about going it alone I have a letter before claim relating to similar circumstances that might help you to set out your position. You can have a stab at drafting it yourself and then post on here for comments before sending it off to CLS.
        Check out some useful guides below

        A guide to voluntary termination
        Seting aside a CCJ
        Completing an N180 Form

        - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
        LEGAL DISCLAIMER
        Please be aware that this is a public forum and is therefore accessible to anyone. The content I post on this forum is not intended to be legal advice nor does it establish any client-lawyer type relationship between you and me. Some of the content I post may include example wording, letters, or other similar responses but they are intended purely for informational and educational purposes. Using some or all of the content I post may fail to meet your needs that is specific to your situation. Therefore any use of my content is at your own risk and I cannot be held responsible in any way. It is always recommended that you seek independent legal advice and you can do this through the Law Society's Find a Solicitor database, by contacting your local Citizen's Advice Bureau or legal advice centres such as LawWorks. You may also be able to seek legal advice from your local university who may run a free (but limited) legal advice clinic to members of the public.

        Comment


        • #5
          yes, full name is CLS Finance.

          i think it is totally irrelevant at all, and they did put it in writing, let me quote it out and let the public see how ridiculous it is
          "based on the fact that you live in a desirable residence, which has a current market value of X and a rentable value of X per month you are undoubtedly a man who is a relatively high earner with a responsible job; and with the way how you can articulate HPI, I can say you are an intelligent man. I am completely unable to accept that you did not suspect that something was not right with the car purchase."
          I have provided them with all these valuations but they said it is irrelevant and insist the vehicle worth over £6K according glass guide.

          while typing this i just received their email, this time they got funnier.
          "you were buying a £6.5k car for £3k and that you had never heard of HPI the asset finance register. My opinion of you ignorance is that it is a fraud. I say this because you are Mr x xxx (Hons). Those credentials make you probably the most well educated and intelligent man that I have ever met. This together with the other evidence that I have provided to you makes me completely satisfied that should this matter go to court we will win."
          i dont know how they get this information from, this is really insane, and driving me nuts.

          up to this point, their evidence are
          1) desirable residence & will educated; which is absolutely irrelevant
          2) ignorance of HPI; which is not a legal obligation for private sale
          3) less than market value; which obviously is not
          i have no idea why they are so confidence in winning the case.


          they are now saying if i pursue litigation against them it will be for my financial loss only £3k as the car will be sold very soon, and civil trespass has no monetary value as they didn't caused any damage to my property. is that true? how about all my spendings to the vehicle?
          they also refused to return my belongings as they cant located them, while some of them are accessories of the vehicle so not returning, do they have the rights not to return?

          I think i need to spend some time to study on the act and provision mentioned above, as i really have no knowledge at it.
          yes, R0b, very appropriate that if you can provide a sample, so i can start working on it, and post it up for comments.
          Last edited by moliu3000; 13th July 2019, 08:16:AM.

          Comment


          • #6
            Scare tactics, that's all.

            You need to decide what to do - do you know who from the company had came to pick up the car?
            Check out some useful guides below

            A guide to voluntary termination
            Seting aside a CCJ
            Completing an N180 Form

            - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
            LEGAL DISCLAIMER
            Please be aware that this is a public forum and is therefore accessible to anyone. The content I post on this forum is not intended to be legal advice nor does it establish any client-lawyer type relationship between you and me. Some of the content I post may include example wording, letters, or other similar responses but they are intended purely for informational and educational purposes. Using some or all of the content I post may fail to meet your needs that is specific to your situation. Therefore any use of my content is at your own risk and I cannot be held responsible in any way. It is always recommended that you seek independent legal advice and you can do this through the Law Society's Find a Solicitor database, by contacting your local Citizen's Advice Bureau or legal advice centres such as LawWorks. You may also be able to seek legal advice from your local university who may run a free (but limited) legal advice clinic to members of the public.

            Comment


            • #7
              i think so as well, if they really have solid proof they wont bring in something totally irrelevant.

              i will definitely take legal actions, or else i will be left with nothing, just need time to study about the act and privisions over the weekend.

              they have two people, i believe (as he didnt get off his car) is the managing director whom i have been communicating with, the other is their technician who is in charge of hacking and driving away.

              Comment


              • #8
                R0b
                would you mind sharing with us for a sample of Letter Before Action, so that i can work on with, and post up here for comments please

                Comment


                • #9
                  I've attached an example from another similar post on here. Personally, I prefer headings but to give you an idea of what you should include I've set out some points below.

                  1. Introduction - this should be a couple of sentences to say that the letter before action is being sent in accordance with the Practice Direction for Pre-Action Conduct and Protocols.

                  2. Summary of your claim - no more than a short paragraph summarising your case making reference to conversion, trespass to property and breach of Section 92(1) of the Consumer Credit Act 1974.

                  3. Relevant facts - This will be a concise, summary of the facts leading up to CLS taking the car from your property. Ideally, it shouldn't be longer than 1/3 to 1/2 of the page.

                  4. Documents or evidence enclosed - If you have any evidence you want to share at this point.

                  5. Action required - this is where you set out what you want to resolve the matter. In your case you can say damages since they have already acknowledged their intention of selling the car.

                  There's no hard and fast rule about how much or little detail you give but there should be sufficient information to give CLS an idea of the nature of your claim to enable them to consider their position.

                  Attached Files
                  Check out some useful guides below

                  A guide to voluntary termination
                  Seting aside a CCJ
                  Completing an N180 Form

                  - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
                  LEGAL DISCLAIMER
                  Please be aware that this is a public forum and is therefore accessible to anyone. The content I post on this forum is not intended to be legal advice nor does it establish any client-lawyer type relationship between you and me. Some of the content I post may include example wording, letters, or other similar responses but they are intended purely for informational and educational purposes. Using some or all of the content I post may fail to meet your needs that is specific to your situation. Therefore any use of my content is at your own risk and I cannot be held responsible in any way. It is always recommended that you seek independent legal advice and you can do this through the Law Society's Find a Solicitor database, by contacting your local Citizen's Advice Bureau or legal advice centres such as LawWorks. You may also be able to seek legal advice from your local university who may run a free (but limited) legal advice clinic to members of the public.

                  Comment


                  • #10
                    hi R0b, sorry for late reply i was doing research whole day yesterday, thank you for your template and guide, i will work with it later today.

                    just another question to see if you would give some advice,
                    i checked my credit score yesterday and found out they have ran a check on me on 01may (before they knocked on my door) with the purpose stating "checking credit application", in which i have never apply anything from them.
                    can they just gain access to my data without my consent?

                    Comment


                    • #11
                      they said allegation of civil trespass has no monetary value because their agent caused no damage to my property.
                      is that true????? i m the owner of the vehilce as per s27 hire purchase act, they need to obtain court order if they think i am not, thus my car and all consequential loss are the damages they have caused, m i right?? but is there any penalty for trespassing???
                      i spent half day yesterday reading trespassing, but it is really a complicated thing to understand; and i will soon need to read on consumer credit act, i am really exhausted.

                      Comment


                      • #12
                        That doesn't necessarily mean that because no damage has been caused they aren't liable to pay some compensatory amount. You should be focusing your research on the tort of conversion - here's a couple of links to get you started:

                        https://hallellis.co.uk/tort-of-conversion/

                        https://www.lawteacher.net/lecture-n...with-goods.php

                        Yes you would be considered the owner in accordance with s.27 of the HP Act.

                        Yes they should have obtained a court order because the Consumer Credit Act says that goods subject to a hire-purchase agreement cannot be taken from private land without an order of the court.

                        Consequential losses will be losses flowing from the taking of the car. For example, did you have to spend money using a train or a bus to get to and from work; what about the use of a taxi? If yes, you should keep receipts as this will be evidence of your losses.

                        If you are really exhausted from doing some research, maybe going to court isn't the best idea and reside yourself to losing the car and not obtaining justice from CLS.

                        We can guide you along with the legal stuff but you need to do your part and fill in the facts and anything else we aren't aware of.

                        Check out some useful guides below

                        A guide to voluntary termination
                        Seting aside a CCJ
                        Completing an N180 Form

                        - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
                        LEGAL DISCLAIMER
                        Please be aware that this is a public forum and is therefore accessible to anyone. The content I post on this forum is not intended to be legal advice nor does it establish any client-lawyer type relationship between you and me. Some of the content I post may include example wording, letters, or other similar responses but they are intended purely for informational and educational purposes. Using some or all of the content I post may fail to meet your needs that is specific to your situation. Therefore any use of my content is at your own risk and I cannot be held responsible in any way. It is always recommended that you seek independent legal advice and you can do this through the Law Society's Find a Solicitor database, by contacting your local Citizen's Advice Bureau or legal advice centres such as LawWorks. You may also be able to seek legal advice from your local university who may run a free (but limited) legal advice clinic to members of the public.

                        Comment


                        • #13
                          hi R0b, really thank you for guiding me which law i should focuse on, i will now read on them.

                          even i m exhuasted and suffering from migraine, i have to continue the research and bring them to court for justice. i cant just let them go, i cant let them walk out free without knowing what they did is wrong, and then do the same again to the next victim.

                          let us all work together!!!
                          and i do really appreciate your help, R0b, thank you.
                          i will now go study tort of conversion

                          Comment


                          • #14
                            hi, received their email today, they proudly announced that the car has been sold.

                            obviously i can only ask for damages, so is it
                            1) £3k + consequential loss, or
                            2) £3k + consequential loss + money i spent on the car (such as 4 brand new tyre i fitted), or
                            3) just the current market value of the vehicle?

                            Comment


                            • #15
                              Market value as at the date of conversion plus any consequential. The £3000 might not be representative of the cars market value if sold by auction so you need all those valuation figures and perhaps take the average from it - you'll need to keep them as printouts for evidence going to court.

                              Think you need to step up the pace on this one.
                              Check out some useful guides below

                              A guide to voluntary termination
                              Seting aside a CCJ
                              Completing an N180 Form

                              - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
                              LEGAL DISCLAIMER
                              Please be aware that this is a public forum and is therefore accessible to anyone. The content I post on this forum is not intended to be legal advice nor does it establish any client-lawyer type relationship between you and me. Some of the content I post may include example wording, letters, or other similar responses but they are intended purely for informational and educational purposes. Using some or all of the content I post may fail to meet your needs that is specific to your situation. Therefore any use of my content is at your own risk and I cannot be held responsible in any way. It is always recommended that you seek independent legal advice and you can do this through the Law Society's Find a Solicitor database, by contacting your local Citizen's Advice Bureau or legal advice centres such as LawWorks. You may also be able to seek legal advice from your local university who may run a free (but limited) legal advice clinic to members of the public.

                              Comment

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