Voluntary termination - Black Horse Finance

[Amethyst]

I've been keeping an eye out but haven't received an email as yet - admin@legalbeagles.infoor if you want to try my other email sharon@legalbeaglesgroup.com

[ScrewLoose]

I've sent them again to both, they should be with you

Thanks,*

[Amethyst]

First few

[Amethyst]

Rest xx*

[Amethyst]

Hmmm - the actual vehicle price was £8900 ... then the invoice adds a 36 month warranty ( and guard x etc) to bring it to the £10k odd listed on the black horse agreement as the cash price ... then there's another warranty and car protection added on .... at different prices so seems to have been added twice - see what R0b thinks - I might be misunderstanding the documents - is it VAT making the figures look wrong ? (£1329 + 20% is £1595 and £582.50 is £699 ). Think the 'buyers fee' is added in to the cash price ( which it shouldn't as it's part of cost of credit ???) Bit weird anyway

[R0b]

Will have a look properly and let you know my thoughts

[Amethyst]

Assume it was a used car. How much was the window price ? Ahhh " So far I've paid a total of8,489.79 on a £10,700 car"" ....*( added a couple figure on previous post - simply because it was bugging me overnight lol)- check my own agreement and there's no VAT listed - car price 7k - petrol £20 ( yeah I know - most expensive petrol ever ffs ) credit agreement is for £7020

invoice


Credit agreement

[R0b]

So, I am agree Amethyst the totalling of the price seems a bit weird but leaving that to one side for the moment and focusing on the VT element, here's my initial thoughts.

1. There's an immediate problem on the first page where it says "TERMINATION: YOUR RIGHTS" and I can see that BH have added some wording which says "Note - You will still have to pay the outstanding balance for the Insurances". Quite frankly, that statement has no legal effect at all because the termination statement is governed by the Consumer Credit (Agreements) Regulations 2010. These Regs mandate finance companies who offer consumer credit agreements to provide certain information and, in the case of HP agreements, they must provide that termination statement. Reg. 7(1) in particular (see here) says that any statutory form (which is the termination statement) must be reproduced without alteration.*

2. Nothing I can find in the terms that says the insurance element is to be treated as a separate contract. On that basis, you could argue the insurance together with the HP credit form the total price payable i.e. multiple product offerings under one agreement. However, BH have clearly omitted the insurance element from the 50% mark. Rightly or wrongly, that's their fault and they've not said that this was an oversight either. In other words, tough luck. You've reached the half way mark according to the contract and therefore you should owe nothing.

3. You could also argue (as an alternative) that the insurance products are in fact a separate agreement and should be treated as such. What's important to remember here is that the document states that you agree to pay 60 x £49.80 over the course of the term of the agreement - that is your contractual commitment. There are potentially three sub-arguments around this:

a. You did not give notice to terminate the insurance arrangement, only the HP part. Therefore, BH had no right to accelerate the remaining insurance balance and demand the full amount because you had already agreed to pay that balance over 60 instalments.

b. Even if BH were entitled to accelerate the outstanding balance (which of course you would deny), then you can argue that it is a penalty clause and should be unenforceable on the basis that BH are effectively penalising you for exercising a statutory right for which you are entitled to do by law. Note, the definition of 'total price' under the Consumer Credit Act 1974 includes to total sums payable but excluding any sums considered as a penalty, compensation or damages for breach of the agreement. I think it is at least arguable that demanding the outstanding balance for something which you did not terminate is a penalty.

c. Alternative to b. above, you can also say that the right for Bh to demand the sum creates an unfair relationship under Section 140A of the CCA 1974 (see here). Where a court finds the relationship to be unfair, the remedies are found in Section 140B (see here). The benefit of arguing this point is that once it is found that a particular set of facts to be unfair, the burden of proof shifts to BH to argue that it wasn't unfair. There's additional support to back up this argument by referencing the Competition and Markets Authority's Unfair Terms Guidance (see here). For example, page 94 of the Guidance talks about unfair terms which has the object*or effect of authorising the trader to dissolve the contract on a discretionary basis where the same facility is not granted to the consumer. There may be other relevant examples in there but you'll need to read it yourself.

4. The threat of having a default on your credit file is something you do need to be aware of and could affect your current state of play with things but in my view, I think BH would be in the wrong for doing so. When you terminate the agreement your obligations to make the repayments by way of instalments cease to exist because as common sense dictates, the contract has ended. If someone fails to meet the 50% mark the remaining balance becomes a debt, which can be enforced by going to court but what BH can't do, is report the outstanding balance as a default, since the agreement is no more. How can you report on an agreement when it has terminated? Again, common sense here.*

It would be both inaccurate and misleading to report a default or late payment market on your credit file in the knowledge that the contract has terminated. Some lenders like BMW do this despite reporting to reference agencies that the debtor has exercised their VT right. I think when someone decides to stand up and challenge these lenders, they will be on a hiding to nothing.*

Now... writing the letter.*

Haven't got time today to do that but if you want to have a stab at formulating something along the above lines and I can look at it over the weekend.

I should qualify all of this by saying it is simply my opinion only, and you are welcome to disregard it entirely. I don't know anything about your current circumstances other than what you've said so you will need to make an informed decision and work out what is the best option for you - I can't give any promises or guarantees that any of the above will work.

[ScrewLoose]

R0b*I've had a go at drafting a letter, I think it reads OK but any advice or alterations are greatly appreciated before I post it off:




To whom it may concern,


Thankyou for your letter dated the ##########. In your letter you make several points which I will address below.


Within your quoted figures you state that a payment of £1592.43 is required in order to meet my requirement of fees and a schedule 2 insurance. There is nothing in my terms and conditions which state that there is a requirement for me to treat the insurances (which I have been wrongly sold) as a separate contract to that of the hire purchase agreement. Therefore it is reasonable to assume that the insurances and schedule 2 payments fall under the one HP agreement of which I have paid the 50% liability and thereby there is no outstanding payment to be made.*


Moreover, the only indication I can see in relation to this is in the* "TERMINATION: YOUR RIGHTS" section and in that I can see that you have added some wording which says "Note - You will still have to pay the outstanding balance for the Insurances". As you are aware the termination statement is governed by the Consumer Credit (Agreements) Regulations of 2010. This legislation regulates finance companies like yourself and provide certain rights to me as the consumer, and ensures that you act in a manner that is legitimate and fair to the consumer. One such point made in Section 7(1) of the Consumer Credit regulations is that: “The wording of any Form specified in Schedules 2 and 3 to these Regulations shall be reproduced in documents embodying regulated consumer credit agreements where applicable without any alteration”. Schedule 2 paragraph 9 provides the exact wording which you are required to use in relation to voluntary termination, and furthermore the legislation provides the explicit instruction that you provide this without alteration. I believe this therefore puts you in breach of such legislation in your adaptation of the statement which is set out in law.


By creating a demand that I continue to pay for part of the Hire Purchase agreement after terminating it I also argue that you are attempting to create an unfair relationship under Section 140A of the Consumer Credit Act 1974. Having looked through my terms and conditions of the hire purchase I see no mention of the insurances being treated as a separate contract to that of the hire purchase agreement. It now appears that you are trying to split the agreement into two halves, one of which being the hire purchase agreement and the other being the insurances you alledge are a separate item altogether. Attempting to create another set of terms outside of the contract is clearly unfair and I firmly believe a court would agree with me in that respect. In this case remedies for this can be found in section 140B of the Consumer Credit Act 1974 by ways of financial compensation.


I would like to address your threat of filing a missed payment or default on my credit file as a separate matter. At this stage I have confirmation that you have received my notification to terminate my agreement voluntarily on the 7th of January 2019. I provided all notification as per the Consumer Credit Regulations and as such I have met all of my legal obligations which have been set out. I have already informed you of my voluntary termination, and that I will not be signing any additional forms which you have sent which are an attempt to get me to take on more liability.


As of the 7th of January I terminated my agreement with yourselves, and in doing so my obligation to make repayments by way of instalments cease to exist as I no longer have any rights, entitlements or obligations towards the vehicle. Had I not have met the 50% mark then this would become a debt and therefore this would be enforced in court. You are therefore not entitled to mark my credit file in any way as the contract between Black Horse finance and myself has been terminated, and the contract is now completed. Should you wish to endorse my credit file, note that it would be both inaccurate and misleading to report a default or late payment market on my credit file in the knowledge that the contract has been terminated.


By doing so not only will you have breached the contract with myself by reporting data to a credit reference agency that is inaccurate and relates to a contract which is now dissolved, but you will also be breaching your responsibilities under the data protection act to store my data correctly, and to report in a factual and truthful manner. Should my credit report show any inaccurate data in relation to this matter, I will seek immediate legal advice and pursue a remedy through the court system. Please note that I will seek financial remedies for any negative impact on my credit score.


As a final matter in relation to the collection of the vehicle. The consumer credit regulations dictate that my obligations lay with paying 50% of the amounts payable at which point my obligations cease. Nothing in my terms and conditions, nor in the consumer credit regulations states that it is my responsibility to return your vehicle to yourself. Therefore I will not be delivering the car nor will I pay a collection fee. The vehicle no longer belongs to myself and is no longer my property, nor is it my responsibility. The vehicle is currently parked outside my home address and at this time holds tax and insurance. As of Saturday the 25th of January the vehicle will no longer be insured and as such it will be parked on a public road with no insurance or tax. I will report to the DVLA that the vehicle has transferred ownership to yourselves and will report the vehicle as abandoned to the local authority should it not have been collected by yourselves by then.*


Further I remind you of your legal obligation to ensure that your vehicles are insured and taxed whilst parked on the public road. Failure to have a vehicle taxed and insured could render you liable to criminal prosecution and this could result in the vehicle being seized by the police.


At this stage I am willing to accept that the matter is closed, and that the balance settled and reported so on my credit file. I expect you will be in touch shortly to arrange collection of your vehicle.


Regards,
*

[ScrewLoose]

Can anyone give me a bit of a heads up as to if this is OK to send?*

Thanks!*

[R0b]

Might be best to keep your letter short and to the point, and rather giving them indicators of how they might be warranted in claiming the insurance, ask them to clarify and explain. I've condensed what you have drafted and given an example of a response below but feel free to use as much or as little as you want in your response - the wording in red square brackets is optional.

To whom it may concern,

Thank you for your letter dated the ##########. In your letter you make several points which I will address below.

Insurance charges
You claim that a payment of £1,592.43 is required in respect of the insurance charges. I should point out that there is nothing within the terms and conditions of the agreement that suggests or indicates that the insurance element of the agreement is to be treated as a separate contract. Therefore, I am of the opinion that the agreement should be treated as a single contract and on that basis, I have paid one half of the total price payable (according to the agreement) and therefore any further liability is discharged. If you believe that this amount is due and payable, then I would like a full explanation as to why you think I owe this sum of money.

Collection of the vehicle
The Consumer Credit Act 1974 (the “Act”) states that my liability is limited to one half of the total price excluding sums relating to compensation, damages for breach of contract or penalty charges. I am therefore not required to deliver the vehicle to one of your nominated sites but instead, my obligation is to make the vehicle available to you for collection - which I have already made clear to you. I would also point out that Section 173 of the Act states that any contractual term which imposes an additional duty or liability which is inconsistent with the hirer’s rights under the Act shall be deemed void. In light of this, please clarify on what basis I am required to deliver the vehicle to one of your nominated sites.

Threat of default on credit file
Your letter states that I have paid one half of the total price and you then contradict yourself by saying overleaf that I have not yet paid one half and are threatening to mark my credit file with a default. The agreement has already been terminated by virtue of my letter to you on [insert date] when I validly terminated the agreement by exercising my right under section 99(1) of the Act. Therefore, my credit file should reflect that position by closing the account and marking it with “VT”. By reporting a default on my credit file in the way you suggest following termination of the agreement, is both inaccurate and misleading; how can I be in default of an agreement if it was already terminated? [Accordingly, I am putting you on notice that I will have no hesitation in issue legal proceedings against Black Horse for breach of the GDPR in failing to ensure my personal data is accurate and up to date should there be any attempt apply any adverse entry to my credit file.]

[ScrewLoose]

So today I've seen that black horse have marked my credit file with a missed payment. Could this be argued that they are now attempting to seriously delay the process of voluntary termination and therefore a repuditory breach?


Who do I speak to with regards to sorting my credit file out?*

[R0b]

Not sure you can stretch an argument that far, but worth a try. As for sorting out the credit file, that issue would be with BH themselves, probably by sending another letter and if not resolved your next steps are either the Financial Ombudsman which tends to be pretty toothless in this area, or to issue legal proceedings for breach of the GDPR and is probably going to make BH sit up and take you more seriously.

[ScrewLoose]

On the phone to them as we speak and they are saying I need to continue to pay for the vehicle until the car is sold. I've told them my good will is now coming to an end and I'm going to put the car back on the road and off my property and inform the loclw police about the uninsured and untaxed vehicle.*

All of a sudden I'm on hold as they speak with someone else... I'm fuming! It's taken me years to get my credit score where it is!*

[R0b]

I do feel for you, and unfortunately these are the sort of tactics employed by finance companies. If I were you, I'd be making a subject access request and getting access to all recorded conversations (including the current one you are having), making sure you give dates and times of the calls, as well as records including account notes etc.

You can then use that misleading information they are giving you to argue repudiatory breach and breach of the GDPR. That's assuming you terminate the agreement for repudiatory breach and choose whether you follow through with it.

Either way, you should be looking for compensation as a result of that late payment and make sure to download a copy of your credit report.