VT with SMF

[Dunky2k]

Hi there,

New to the forum and the process of VT.
I'm looking to VT on my agreement with Specialist Motor Finance, due to the recent cost of living crisis, we as a family can no longer afford to run 2 cars.

Using the templates on this site, below is the rough wording of what I intend to send to them.
Is this sufficient, or should I be looking to expand on reasons for VT, and what are the likelihood giving sums paid, are they likely to pursue me for any additional monies?

Dear Sir or Madam,

Termination of hire-purchase agreement <insert agreement number here> in accordance with section 99(1) of the Consumer Credit Act 1974 (“CCA 1974”)

I am writing to inform you that I am exercising my legal right to terminate the above hire-purchase agreement with immediate effect in accordance with Section 99 of the CCA 1974. Under Section 100(1) of the CCA 1974, my liability is limited to one-half of the total price payable which, according to the terms of this agreement, is £5,952.80. As at today’s date, I have paid £8326.92 and I am therefore no longer required to make any further payments.

I have also inspected the vehicle and I am of the opinion that it is in a reasonable condition given its age whilst accounting for fair wear and tear. Photographic evidence has been taken in the event of any future dispute as to the state of the vehicle. The vehicle is available to collect from the above address on giving reasonable notice.

I would appreciate if you could contact me via e-mail at <insert email here> within the next 14 days to discuss the next steps.

I believe that they may try to send me a Voluntary Termination pack, do I have to fill this in? Also do I have to do the self assessment? Am I liable for any pickup charges too? I have attached the termination section of the contract I have.

Any information on previous success / issues with this lender, would be appreciated, or advice in general as to what curveballs I'm likely to expect from them.

Thanks in advance

[Dunky2k]

Hi all,

I've just had a reply from SMF, thanking me for my enquiry regarding VT and that I should follow the links of their website and complete the VT Pack that they have.

I have drafted a reply to advise them that I didn't make an enquiry to VT, the original correspondence, was in fact me exercising my legal right to terminate my hire-purchase agreement with immediate effect.

Their Termination pack has wording that I don't like and could leave me liable for charges should I return and sign these.

My question is, do I have to sign these, and what can I legally say to them saying that I don't have to?

This is what they are asking me to sign in the pack below
VOLUNTARY TERMINATION LETTER

Dear Sirs,



Agreement Number:


Vehicle:



I hereby Voluntary Terminate the above goods.

I understand that I will be responsible for any liability outstanding in accordance with the terms and conditions of the Agreement.

I confirm the following items are available upon request (please tick appropriate boxes)

Registration Documents (V5)
MOT Certificate
Full Service History
All Keys (including master)

I also confirm that I will empty the vehicle of all personal effects and clean it thoroughly both inside and out prior to delivery or collection.

Name:

Signature: ……………………………..

Date: …………………………………….

[R0b]

You are not obligated to sign them so long as you have complied with s.99 requirements. It is now typical of lenders to force you down this route as it is their policy to require debtors to sign them but it is not a legal requirement however much they huff and puff. Just be aware, if you don't sign them then you might have them threaten you with reporting late payment markers or defaults on your credit file. You may need to either go down the Financial Ombudsman route which are pretty much next to useless, or worse case issue a claim against them and to force their removal - I have an ongoing claim for the exact reason and as soon as they instructed external lawyers, their defence admitted the entries were not accurate and wrongly reported but that doesn't mean they will take the same position.

If you did sign their papers but then disputed any damages SMF will probably point to you signing this as accepting liability. You would then have to argue that the CCA says you're only responsible for taking reasonable care and their reliance on the signed paperwork is an attempt to broaden your scope of liability that the CCA says you are responsible for.

Either way, you could be in a catch 22. I prefer option 1 as I find it easier to argue that as I know the law is on my side rather than trying to argue something you have signed.

[Dunky2k]

Hi R0b

Many thanks for the prompt response.

I sent an email stating my voluntary termination on the 29th August as per templates used here and also in my original post and also posted a copy using first class signed for service.
I received a read receipt of my email on the same day I sent it.

Does the fact that they have received my request on that date and the fact they have sent a read receipt back mean that they have acknowledged it?
Is this the date when my VT started and my HP was terminated and can I now stop my payments to them, or do I have to physically wait until I get acknowledgement in writing from them?

Checking on the signed for service, it appears that the postal copy was only signed for today, must have been due to postal action.

I received an email from them yesterday 4th September thanking me for my enquiry about VT and to follow the links on the website for further information regarding this.

My take on this is, my original email of the 29th August was my request to VT and not an enquiry and at the point of it being read was their acknowledgement of receiving my request, is that correct?

I have had a text message from them today stating that my account is about to go into arrears, am I still liable to make further payments until they acknowledge my termination in writing?

I don't want to be paying any more than is absolutely necessary, considering I have already paid way over the required 50% to exercise my right for VT.

So I guess I'm needing some clarification as to when exactly my VT starts, on me sending and them reading/sending read receipt of my email, or when they actually confirm this in writing?

If its the latter, then I guess to avoid any hassle I will need to make the payment.

[Dunky2k]

Hi R0b

I have received further communication from SMF this evening stating the below.

We have been advised by your bank that your direct debit payment of xxx.xx has been returned unpaid and that you have cancelled your direct debit. As per your terms and conditions, your monthly payment must be paid via direct debit on your agreed due date. You are now in breach of the terms and conditions and need to contact us urgently today on xxxxx xxx xxx to reinstate your direct debit and make this payment.

Basically I need to know, are they chancing their arm here, as I have not received anything in writing from them to advise if my VT has been accepted or not.

[R0b]

If you have sent the email on 29th August then I would take it as the agreement having terminated on that date (but see my comments below on deemed service of notices). The right to terminate as prescribed under section 99(1) of the Act is what we would call a termination right by operation of law - it's a legal phrase that means the law has created a right for you and so long as you comply with the requirements of that right, there is nothing further required in order to give effect to it.

S.99(1) simply requires you the right to terminate at any time (unconditionally) by giving notice in writing to the creditor and as soon as you have complied, that is it. No acknowledgment or confirmation required from SMF, no please can you do this or that, zilch. You've done what you needed to do and as far as the law is concerned, the contract is now terminated per your letter and SMF should action it.

I don't believe there is anything in the legislation as to when the notice is deemed to be served so you would have to apply sensible logic. For emails, I would say as long as they are sent on a working day i.e. 9am to 5pm or possibly later if the business opening hours is longer, then it would be sensible to argue it was served on that day. If it is after this period, then treat it as being sent on the next working day. You might argue the lack of description in the Act as to how notices are served means you send the notice by email on any day including a weekend and still be deemed to be served on that same day. that's a perfectly plausible argument but I prefer to take a cautious approach and ensure any they are served on a weekday before 4pm.

Now, as you have a read receipt I think you can rely on that as saying the notice was validly served on 29th August despite it being a public holiday so I would be sticking to that as your primary argument. The notice by post was simply a copy of the email to make sure it was properly received in a durable medium.

I can't see anything you have done wrong and this is the typical stance of lenders who think they can pick and choose and flout the rules and rights you have under the Act. I would fully expect them to now tell you that you are now in breach, they are going to mark it as a late payment and ultimately file a default notice or otherwise claim to terminate the contract without acknowledging your termination notice. If they decide to do that, then you can easily have them for breach of data protection laws and/or negligence and seek compensation although you are likely going to have to initiate legal proceedings to see any real effect of them reversing any negative entries.

Whether you want to pay them now or take the risk and see what they do is entirely your choice. So long as you gave notice to terminate before the instalment due date, I don't believe they are entitled to anything and you are in the right. If you are going to stick to your guns I would suggest that you respond to SMF and set out your version of events including the fact you obtained a read receipt and it was sent by email on 29th August. This will help to protect your position but also puts them on notice and you can use the email and any responses as evidence should you have to take it further.

Just a word of caution and I see this all the time on this forum, people tend to let this rattle on for months if not years and then complain that their credit file is shot and its all unfair and they don't know what to do next. Do not let that happen as the longer it goes on, the worse it will be. There is no reason that if you stick to your guns and the moment they issue that first negative entry, you should be moving things up a gear and potentially starting legal action if they refuse to back down. Until you take that step, you are simply talking to some low level customer service person who will probably have no idea around the law or your rights and will be applying SMF's policy and scripts demanding money from you and threatening to continue damaging your credit file.

Sorry it's a long post but best I get everything out now as there's not much I can do unless you are at that stage of wanting to start legal action. You can try the non-legal route by going to the financial ombudsman but I never have much faith in them these days as their decisions are like Russian roulette and expect to wait months on end before a decision is even made.

Happy to look over anything you want to send them or help you craft responses just post up any drafts on here.

[Dunky2k]

R0b

I've just had a reply from SMF that states the below.

Dear Mr XXXXXXX,

Thank you for your email. I can confirm that you are no longer liable for any contractual payments. However you may be liable for damages/rectification. Please refer to our website to complete the process…

https://www.smfmotor.com/ please select the customer tab at the top of the screen then select the following FAQ's > Questions about your finance agreement > Can I Voluntary Terminate my Hire Purchase agreement? >Voluntary Termination – Download Voluntary Termination pack here

They are once again pointing me to the VT pack that I posted above, looking like they are asking me to sign away my liability should there by any damages to the car.

I believe that any markings etc on the car are due to fair wear and tear, and they do grade the car using the CAP HPI guide. The car is 10 years old and has 56k miles on the clock.

How do I safely decline this latest request, without being too full on, and within my rights not to do so as per the CCA act.

[Dunky2k]

R0b

I'm constructing a reply back to SMF in response to the email above and would like you to if possible cast you view over it. Should I send as is, or is there anything that I should remove or add. I feel that all we are doing is ping ponging emails back and forth and getting nowhere fast.

Email Start

Dear Sir

I am replying to your email below dated 10^th September 2022 in relation to my instruction of Voluntary Termination given on the 29^th August 2022.

Firstly I would like to thank you for clarification on the point that I am no longer liable for any contractual payments under this agreement.

Secondly I would like to advise that after reading your FAQ’s which I was referred too to complete this process, I am politely declining to sign this document as it could appear to be an attempt to broaden my scope of liability that the CCA says I am responsible for.

[I am however prepared to send the form back completed but unsigned as a gesture of goodwill.] <- Not sure if I should add this line as I wouldn't like to think that by sending this back unsigned electronically can be used as my agreement.

Furthermore, under the HP terms and conditions and the CCA I have already previously given instruction of my Voluntary Termination on the 29th August 2022 which was acknowledged, therefore there is no legal obligation for me to sign or provide anything further.

I would appreciate again, that arrangements are made for the collection of the vehicle from my home address giving reasonable notice.
[Should I put a timeframe on this request and if so, how should I word this?]

Email End

[R0b]

I'll have a look and get back to you

[R0b]

Dear Sir or Madam,

I write in response to your email of 10th September 2022 concerning my notice of my voluntary termination given on 29th August 2022.

Firstly I would like to thank you for clarification on the point that I am no longer liable for any contractual payments under this agreement.

Secondly I wish to point out that, the notice of termination was exercised in accordance with section 99(1) of the Consumer Credit Act (the Act) which explicitly states that I have the right to terminate the agreement at any time before the final payment becomes due. The notice of termination must be in writing, which was sent by email on 29th August 2022 and a copy of that notice was also posted by mail.

Whilst I accept that, under the Act, I have a duty to take reasonable care of the vehicle, there is nothing within the Act that requires me to sign any additional documentation to confirm my intention to proceed with termination of the agreement; the only requirements are what I have described above. In any event, the way in which your voluntary termination letter is written, it suggests that I will be liable for any damage to the vehicle in accordance with the terms and conditions of the agreement. In my opinion, the letter is an attempt to broaden the scope of my liability beyond the duty of reasonable care and effectively waive any rights I may have to challenge the damage that did not occur in my possession or if I do not agree with the charges applied by you (for example, if the damage is considered reasonable wear and tear). Therefore, I must tell you that I will not be signing your voluntary termination letter.

If you believe I am legally required to sign this letter then I would ask that you point me to the relevant provision of the Act that confirms my voluntary termination right under section 99(1) is conditional on having to sign your own documentation. I am confident you will find nothing but I am happy to be corrected. Otherwise, if you are unable to produce any evidence to support your position, then I politely ask that you proceed with the closure of my account and contact me using the details you have to discuss your arrangements to collect the vehicle at a convenient time for both of us.

See above, feel free to amend or reword to suit. I would avoid offering to sign the letter subject to conditions simply because you open up a can of worms that was not necessary and could make your life more difficult to argue. Just keep it simple and stick to your position as the law dictates and you should be on solid ground but if you want to offer to signing it, that's your choice although you should be prepared for potential headaches down the line if they claim you signed the letter so you're liable and that's that.

As for timescales on collection, I wouldn't put a time limit just yet. Give them 2 or 3 weeks and if there's no response in that time to arrange collection, then you can consider your options and the next steps you want to take.

[Dunky2k]

R0b

Many thanks for looking over this, your reply sounds way more professional than what mine would have been, so will send it off to them to see what response if any I get from them now.
Appreciate the time and effort you have shown to assist.
I will update this post if and when I get any response back from them.

[R0b]

Just do a double check of what I've written before you send it as I spotted several words missing from the sentence so I have updated the above example

[Dunky2k]

R0b

Most recent reply from SMF below in italics

Dear Mr xxxxxxxx,

We have never said that you are legally required to sign a letter. We have asked you to follow our on-line process. This asks you to confirm what items are available with the vehicle (it’s not compulsory to sign this) and also allows you to take photographs of the vehicle, which allows us to advised you of any damage that’s won’t be covered in accordance to section 100(4) of the Consumer Credit Act.

If you don’t want to do this I will send you a letter to confirm the termination and enclose the address for you to drop the car off. If you prefer I can arrange collection of the vehicle at a cost of £150.


I intend to send something like the below to them, do you think that is is ok?

LETTER START

Dear Sir / Madam,

I am writing further to your email dated 26^th September 2022.

As you will be aware, I exercised my right to Voluntary Terminate my agreement under Section 99 of the Consumer Credit Act 1974 (the “Act”). In doing so, Section 100(1) of the Act limits my liability to one half of the total price payable which excludes any compensation for breach of contract.
As the collection charge you have quoted below imposes an additional charge over and above one half of the total price payable, the charge is deemed void as per Section 174 of the Act. Accordingly, I am under no obligation to pay the charge at all.

In reference to your online process, I have already stated that I will not be signing your voluntary termination letter, however I am prepared to detail below what items are available with the vehicle.

• Registration Document (V5) - YES
• MOT Certificate - YES (Several)
• Service History - Partial
• Keys - 2

I can also confirm that all personal belongings have been removed from the vehicle and that I have taken numerous photographs to show the current condition of the vehicle whilst it was still within my possession.

I also note from your online process, that if the delivery location provided is greater than a 100 mile round trip from my location, that you will collect the vehicle from my home address without charge, at your expense.

Can I therefore request that you proceed with issuing me your letter of confirmation of the termination, the delivery address to drop off the car, and that you also confirm in writing to pay all reasonable costs and expenses in doing so.

LETTER END

Should I at this point also make any reference to cancelling the tax / insurance and notifying the DVLA of change of ownership if they continue to delay any collection?

[R0b]

See suggested amendments below. I've gone in fairly hard with the language and references to the CCA but that's because you can sometimes go round in circles with these guys trying to explain your position. Nothing wrong with your original response, just thought I've pad it out in case you need further information to respond.

Dear Sir or Madam,

I am writing further to your email dated 26^th September 2022.

Whilst I appreciate you now accepting that the online voluntary termination process is not compulsory, it was never explained to me that it was optional and in fact, it felt as if I was being forced down this path all the while being told that my account is about to go into arrears. Regardless, I don't feel that there is a need to complete the online process since the vehicle will in any event be inspected, photographed and the appropriate documentation together with the number of keys will be recorded prior to the sale at auction. I have already taken various photographs of the vehicle in its current condition and I will retain these to be cross checked against any photographic evidence should you claim that damage has been caused to the vehicle beyond reasonable care.

That being said, I can confirm the following:

• Registration Document (V5) - YES
• MOT Certificate - YES
• Service History - Partial
• Keys - 2

As regards the return of the vehicle, I should point out that there is no obligation for me to return the vehicle at my expense nor am I required pay an additional fee to collect the vehicle. Having terminated the agreement under section 99(1) of the Consumer Credit Act 1974, my liability under section 100(1) is limited to one half of the total price of the goods. The reference to "total price" is defined in section 189 of the Act as being:

"the total sum payable by the debtor under a hire-purchase agreement or a conditional sale agreement, including any sum payable on the exercise of an option to purchase, but excluding any sum payable as a penalty or as compensation or damages for a breach of the agreement"

The £150 collection fee you refer to constitutes compensation (or, if I refuse to pay, damages for breach of contract) and is therefore an irrecoverable sum. Any attempt to impose any additional liability beyond the one half amount either at my own expense or by requesting a fee is void pursuant to section 173 of the Act. This is further backed up in the contract under the heading "TERMINATION: YOUR RIGHTS" that as long as I have paid one half of the total price and taken reasonable care of the goods, I do not have to pay anything more.

As far as I'm concerned, my only obligation is to make the vehicle available to you, which I have done. I also note from your online process, that if the delivery location provided is greater than a 100 mile round trip from my location, that you will collect the vehicle from my home address without charge, at your expense. I am willing to return the car to an address of your choice subject to you agreeing to pay my reasonable expenses, otherwise please arrange for it to be collected.

Please could you proceed with issuing the letter confirming the termination.

[Dunky2k]

Hi R0b

Again many thanks for the input, can I just ask that the section above regarding the fee, you quote section 173, however one of the template letters for disputing any charge states section 174. What one is correct?