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unwittingly bought a used car with outstanding finance

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  • moliu3000
    started a topic unwittingly bought a used car with outstanding finance

    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

  • pt2537
    replied
    ADR isnt necessary but its always something to throw in to offer some costs protection thats for sure.

    Leave a comment:


  • R0b
    replied
    As PT has said, it's a decent LBC which covers the relevant points though I think the lack of any ADR reference is not fatal nor is it absolutely necessary. The pre-action protocols only require the parties to consider ADR, not that it must be included in the LBA. There's reasons why you might want to include in your letter i.e. to show you are being the reasonable party but there may be reasons why not, such as where the conduct of the other party prior to sending the LBA might suggest that ADR is just not going to be useful. It may also be the case that you wish to hear their response to your LBA before further considering if ADR might resolve things.

    Anyway, building on your draft letter, see the example below that might assist you further. I think your LBA is adequate but could be beefed up in some areas (not to say mine is perfect as I've not spent any time refining it).

    A few points to note about the example below:

    1. You've mentioned two sources of valuation but the courts do like a good sample so you might want to consider getting a valuation from the likes of WhatCar or Parkers or even Autotrader and then average the 3 which would be the market value based on its condition mileage etc.

    2. In the "Action required by CLS Finance" as well as your draft letter, you refer to any other lossess resulting from the repossession. Unfortunately if you are claiming a fixed sum of damages then you need to be specific about the losses suffered or incurred as a result of the conversion. Otherwise it would be an unspecified claim and before you can even begin your claim, you'll need to pay £10,000 to issue it - an amount I am sure you don't wish to pay. If you don’t know how much these losses are, then you could make an estimate based on the average time it takes from issue a claim to a hearing - you can find these average times from the latest quarterly statistics from the MOJ (click here) which according to the latest statistics says that the average time is 36.9 weeks (you could round it up to 37 weeks) which turns out to be around 8.5 months.

    3. I've added in a short final paragraph regarding ADR on the basis that you don't think ADR is suitable but remain open to engaging in ADR or discussing terms of settlement. That will show you've considered it and are keeping an open mind but also moving the ball into the court of CLS.
    ---------------------------------------------------

    Dear Sir or Madam,

    Letter before action <Your name> v CLS Finance Limited

    I am writing to you with reference to the above and send this letter before action in accordance with the Pre-Action Protocols on Pre-Action Conduct.

    Summary of claim

    The claim against CLS Finance is that it instructed an agent to unlawfully enter onto my property without permission (despite having previously been warned not to step onto my property) and removed a vehicle from my possession, of which I am the owner. A number of requests have been made to CLS Finance to return the vehicle but have so far refused. I am now informed by CLS Finance that the vehicle was recently sold.

    By removing the vehicle and took subsequent steps to dispose of it, CLS Finance are liable for the loss of the vehicle, namely wrongful interference with goods by way of conversion. Accordingly, CLS Finance is liable to pay compensation of <insert amount> being the market value of the vehicle, which represents the loss suffered as a result of the conversion. The amount has been assessed using the median valuation from three online valuation services; the AA, Webuyanycar and <other sources>.

    On or about 31 January 2019, I purchased a 2012 Peugeot 5008 with registration number XXXX following an advert that was seen in <nsert description>. The sale of the vehicle was a private one and the seller, whose name is XXX, claimed to be the owner of the vehicle and was in possession of the relevant documentation relating to the vehicle. Relying on those representations made by XXX, I agreed to purchase the vehicle for £3,000.

    On 21 May 2019, I answered the door to a male person by the name of XXX from CLS Finance (whom I now understand is director of CLS Finance) claiming to be the purported owner of the vehicle and demanding that I hand over the keys to the vehicle. I pointed out to him that I purchased the vehicle in good faith without knowledge of any hire-purchase agreement and subsequently challenged him to produce evidence that the vehicle does in fact belong to CLS Finance. However, XXX refused to provide any such information. I further explained that, unless there is evidence to the contrary, title to the vehicle lawfully passed to myself in accordance with Section 27 of the Hire-Purchase Act 1964 (HP Act). This was rejected by XXX on the basis that, amongst other things, as I reside in what is considered to be an affluent area, I must have known that the vehicle was being sold at an undervalue. Prior to leaving, I explicitly told XXX that I do not wish to see him on my property without my permission.

    Since then, CLS Finance instructed their agent to enter onto my property without permission and remove the vehicle from my possession. This occurred on 10 July 2019 at approximately 0930 and was captured by one of my surveillance cameras covering the property.

    The claim against CLS Finance

    In my view, the removal of the vehicle from my property and proceeding to sell it without consent constitutes a wrongful interference with goods by way of conversion – a tort actionable in the civil courts. As already mentioned above, Section 27 of the HP Act protects innocent purchasers and Section 28 further goes on to state that in all such situations, there is a presumption that the purchaser has acted in good faith and without notice of any hire-purchase agreement. CLS Finance have offered up no evidence to support its view that I have not obtained good title to the vehicle.
    As to the references about my current living situation, I do not accept that this has any bearing as to me obtaining title to the vehicle or somehow implies that I should have known that it was being sold at an undervalue. Nonetheless, Section 29 of the HP Act provides that a person is to be taken to be a purchaser without notice of a hire-purchase agreement if, at the time of the sale, he has no actual notice that the vehicle is or was the subject of any such agreement. Therefore, constructive notice (which is what you appear to be suggesting) is insufficient to prove that I am not a purchaser who has acted in good faith.

    In addition, if as alleged, the vehicle is subject to a hire-purchase agreement, then CLS Finance are in further breach pursuant to Section 92 of the Consumer Credit Act 1974. Section 92 explicitly states that where goods that are subject to a hire-purchase agreement, a creditor must not enter any premises to repossess the goods without an order of the court. Failure to comply means that the creditor (in this case CLS Finance) shall be in breach of its statutory duty and liable to pay compensation. I am not aware nor has CLS Finance made me aware of any court order which allows them to enter onto my premises and repossess the vehicle.

    Action required by CLS Finance

    In order to resolve this matter, I require you within 14 days of the date of this letter to immediately return the vehicle or otherwise pay me by way of cheque the sum of £xxxx. This amount is based on the following calculations:
    • Vehicle purchase price at £3000
    • 4 brand new tyres at £xxxx
    • Any other losses resulting from the repossession
    If you fail to comply with the above or I do not hear back from you by <insert date> without providing a substantive response, I will seek to commence legal proceedings without further notice. Please note that the compensation referred to in this letter before action will likely increase and it is my intention to purchase a second hand vehicle in the event of your refusal to settle this claim so as to mitigate my losses in respect of your unlawful conduct.

    Whilst writing, I have considered whether or not alternative dispute resolution (ADR) may be of assistance in resolving this matter. Given the conduct and attitude of CLS Finance and belief that CLS Finance are not liable, I do not consider ADR to be appropriate at this stage. I do, however, remain open to ADR and/or discussing terms of settlement so that the costs involved in this dispute are kept to a minimum.

    I look forward to hearing from you in due course.

    Yours faithfully
    XXXXX
    Last edited by R0b; 22nd July 2019, 11:03:AM.

    Leave a comment:


  • pt2537
    replied
    Originally posted by moliu3000 View Post
    finally, have drafted the letter before action, any comment/advice will be highly appreciated.

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

    LETTER BEFORE ACTION
    Re: Wrongful Interference with Goods

    Dear Sir or Madam

    I am writing to you with reference to the above and send this letter before action in accordance with the Pre-Action Protocols on Pre-Action Conduct.

    On or about 31January2019, I purchased a 2012 Peugeot 5008 with registration number XXXX. The sale of the vehicle was a private one and the seller, whose name is XXX, claimed to be the owner of the vehicle. At no point was I made aware that the vehicle carried any outstanding finance. I therefore agreed to purchase the vehicle in good faith for the sum of £3000.

    On 21May2019, I was informed by CLS Finance claiming to be the purported owner of the vehicle. I have primarily dealt with a person at CLS Finance named XXX and I pointed out to him that I purchased the vehicle in good faith without knowledge of any hire-purchase agreement. I further explained that, unless there is evidence to the contrary, title to the vehicle lawfully passed to myself in accordance with Section 27 of the Hire-Purchase Act 1964.

    Since then, CLS Finance instructed their agent to remove the vehicle from my possession and this in fact occurred on 10July2019 at approximately 0930. I am the true owner of the vehicle having obtained good title to the vehicle pursuant to Section 27 of the Hire-Purchase Act 1964, therefore the removal of the vehicle from my possession constitutes a wrongful interference with goods, namely trespass to goods and/or conversion – an tort actionable in the civil courts.

    In order to resolve this matter, I require you within 14 days of the date of this letter to immediately return the vehicle or otherwise pay me by way of cheque the sum of £xxxx. This amount is based on the following calculations:
    • Vehicle purchase price at £3000
    • 4 brand new tyres at £xxxx
    • Any other losses resulting from the repossession
    If you fail to comply with the above or I do not hear back from you by 04August2019 without providing a substantive response, I will seek to commence legal proceedings without further notice. Please note that the compensation referred to in this letter before action will likely increase and it is my intention to purchase a second hand vehicle in the event of your refusal to settle this claim so as to mitigate my losses in respect of your unlawful conduct.

    I look forward to hearing from you in due course.

    Yours faithfully
    XXXXX


    -------------------------------------------------------------
    Hmmm the letter fails to offer ADR , and i normally provide a link to the protocols, but apart from that its not bad that really

    Leave a comment:


  • moliu3000
    replied
    finally, have drafted the letter before action, any comment/advice will be highly appreciated.

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

    LETTER BEFORE ACTION
    Re: Wrongful Interference with Goods

    Dear Sir or Madam

    I am writing to you with reference to the above and send this letter before action in accordance with the Pre-Action Protocols on Pre-Action Conduct.

    On or about 31January2019, I purchased a 2012 Peugeot 5008 with registration number XXXX. The sale of the vehicle was a private one and the seller, whose name is XXX, claimed to be the owner of the vehicle. At no point was I made aware that the vehicle carried any outstanding finance. I therefore agreed to purchase the vehicle in good faith for the sum of £3000.

    On 21May2019, I was informed by CLS Finance claiming to be the purported owner of the vehicle. I have primarily dealt with a person at CLS Finance named XXX and I pointed out to him that I purchased the vehicle in good faith without knowledge of any hire-purchase agreement. I further explained that, unless there is evidence to the contrary, title to the vehicle lawfully passed to myself in accordance with Section 27 of the Hire-Purchase Act 1964.

    Since then, CLS Finance instructed their agent to remove the vehicle from my possession and this in fact occurred on 10July2019 at approximately 0930. I am the true owner of the vehicle having obtained good title to the vehicle pursuant to Section 27 of the Hire-Purchase Act 1964, therefore the removal of the vehicle from my possession constitutes a wrongful interference with goods, namely trespass to goods and/or conversion – an tort actionable in the civil courts.

    In order to resolve this matter, I require you within 14 days of the date of this letter to immediately return the vehicle or otherwise pay me by way of cheque the sum of £xxxx. This amount is based on the following calculations:
    • Vehicle purchase price at £3000
    • 4 brand new tyres at £xxxx
    • Any other losses resulting from the repossession
    If you fail to comply with the above or I do not hear back from you by 04August2019 without providing a substantive response, I will seek to commence legal proceedings without further notice. Please note that the compensation referred to in this letter before action will likely increase and it is my intention to purchase a second hand vehicle in the event of your refusal to settle this claim so as to mitigate my losses in respect of your unlawful conduct.

    I look forward to hearing from you in due course.

    Yours faithfully
    XXXXX


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

    Leave a comment:


  • R0b
    replied
    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.

    Leave a comment:


  • moliu3000
    replied
    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?

    Leave a comment:


  • moliu3000
    replied
    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

    Leave a comment:


  • R0b
    replied
    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.

    Leave a comment:


  • moliu3000
    replied
    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.

    Leave a comment:


  • moliu3000
    replied
    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?

    Leave a comment:


  • R0b
    replied
    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

    Leave a comment:


  • moliu3000
    replied
    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

    Leave a comment:


  • moliu3000
    replied
    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.

    Leave a comment:


  • R0b
    replied
    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?

    Leave a comment:

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