Voluntary Termination - Close Brothers demanding dds continue until collection

[DrStamen]

Hello all,

I'm currently in the process of Voluntary Termination of a conditional purchase agreement with Close Brothers. I have been following the invaluable advice on this forum - thanks rob!


I sent notice of VT by email and recorded post on January 26. Close Brothers acknowledged receipt by phone call on February 1. In that email/letter, I stated: "As I have already paid more than half of the total amount payable, I am no longer required to make any further payments as in accordance with Section 100(1) of the CCA 1974. I thereby ask that you do not attempt to take further payments for this agreement."


However, both their call agent and the template email that was sent to me following the call claim that I need to keep paying the direct debits until the vehicle is collected. In fact, the email (posted below) seems to imply that I need to maintain payments until the vehicle is successfully auctioned! (relevant quote: "Once the vehicle has been collected, the vehicle will then go into the next available auction and once sold your vehicle finance agreement with us will be terminated."

I stated to the agent that legally I was not obliged to. She said I was as payments were a month in arrears, and that this is in my contract. I have checked the contract, and there is no mention of this.

The agent couldn't give me a date for collection of the vehicle, but said someone from their asset collection contractor would be in touch with me within 14 days of the call to arrange.

Today, (Feb 5) I called that contractor to enquire about collection. They said they had been unable to arrange a date with me as Close Brothers had failed to provide them with my contact details. I then asked them to collect at the earliest possible date, which is February 20th. This is five days after the next direct debit to Close Brothers is due to be debited from my account. From reading this forum I know that, legally, I do not have to pay this. However, the Close Brothers agent was adamant that I do need to pay it.


I am loathe to cancel the DD only to have Close Brothers record a missed payment on my credit record, so I'm trying to consider what other options I have:


1) Leave the direct debit standing, eat the £200+ loss.


2) Cancel the direct debit, go through an onerous, time consuming and stressful fight with Close Brothers and risk having my credit record blemished.


3) Leave the direct debit standing, then if Close Brothers do take the payment, press my case with them, threatening ombudsman.



Any advice appreciated!





---

Copy of email from Close Brothers


Thank you for your recent email confirming you wish to proceed with voluntary termination of your vehicle finance agreement xxxx relating to xxxx.

Your vehicle finance agreement has been transferred to our Asset Recovery Team who will manage your request throughout the termination process.

Once the vehicle has been collected there will be no further payment due.

We have now shared your information with our vehicle collection agent xxx who will be in contact within the next 5-10 working days to arrange collection.

You must maintain the Direct Debit and insurance throughout the process, once the vehicle has been collected, you can cancel them.



Collection Process:

• xxx will telephone and agree a suitable time/day for collection.

• At the time of collection please have the vehicle documents, V5, MOT/service history and spare key (s) available for the agent to photograph.

• Prior to collection and if applicable, please place the locking wheel nut, inflation kit(s), spare wheel(s), and parcel shelf inside the vehicle.

• The driver will contact you approximately one hour prior to arrival on the day of collection.

• xxx will then take possession of the vehicle to complete collection.

Please notify our collection agent xxx on xxxxwithin 24-48 hours of the agreed collection date should you wish to cancel / rearrange. A failed collection fee may be charged if notice is not given.



Once collected, you will be required to complete section V5C/3 (Yellow Section) of your logbook and return this to the DVLA, we have provided the details below to enable you to complete this section:



Alternatively, you can complete this online using the link provided below:



https://www.gov.uk/sold-bought-vehicle



Where the form mentions ‘The sale date’ please insert the date your vehicle was booked in for collection.



Once the vehicle has been collected, the vehicle will then go into the next available auction and once sold your vehicle finance agreement with us will be terminated.


Your credit profile will be updated, and if there is an outstanding balance due, this will be transferred to our debt management agency.



Should you have any queries, please do not hesitate to contact us by replying to this email or on 01302 344077 (option 1) our opening hours are Monday to Friday 9am – 5pm.



Asset Recovery Team

[Pezza54]

If you have paid at least 50% of the finance agreement you are entitled to vt.
Interestingly vauxhall finance state they will cancel the dd straight away and an inspector will contact the customer within 3 days to arrange an inspection.
The consumer is liable to pay for excess mileage and damage above fair wear and tear.
If the finance company delays in arranging inspection and collection it is their problem, not yours
Provided you write to the finance company to let them know you are cancelling the dd but will pay for excess mileage and damage agreed at the time of inspection, in my opinion you can cancel your dd.

[HariSeldon]

Provided you write to the finance company to let them know you are cancelling the dd but will pay for excess mileage and damage agreed at the time of inspection

I would not recommend agreeing to pay for mileage or damage; the law simply says you have an obligation to take reasonable care of the goods so why weaken your hand and lighten your wallet by offering more?

I would remind the finance company that they have received notice that the agreement has been terminated as per section 99 of the Consumer Credit Act 1974, 50% has already been paid so no further monies are due, they should now cancel future DD requests and the vehicle is now their responsibility and is available for collection.

If they do take the next DD amount then claim it back from your bank under the direct debit guarantee.

[DrStamen]

Thanks for the responses!

Update: The vehicle was collected today. However, a direct debit was taken in the period between notification of VT and collection. I spoke to a member of the Close Brothers team today and they insisted that I was required to make DD payments up until collection of the vehicle.

I am now going to write them an email + letter reminding them of section 99 of the CCA, as suggested by HariSeldon, asking them to refund the amount within 14 days; and that if they fail to do so I will be reaching out to my bank to reverse the DD as well as writing to the financial ombudsman.

[DrStamen]

Another update: Today I was contacted by Close Brothers regarding my complaint. They have come to the decision that they will not be refunding the money as I was in possession of the asset on the date of the DD. They fully acknowledge that I informed them of the VT before that.

So I'm going to be writing a letter to the ombudsman, I guess!

[R0b]

Another update: Today I was contacted by Close Brothers regarding my complaint. They have come to the decision that they will not be refunding the money as I was in possession of the asset on the date of the DD. They fully acknowledge that I informed them of the VT before that.

So I'm going to be writing a letter to the ombudsman, I guess!

Or, you could contact your bank and tell them that the direct debit payment was unauthorised as the contract had been cancelled before the payment was due. Under the direct debit guarantee scheme you are entitled to an immediate refund, and it would then be up to Close Brother to pursue you for that, although they may (worst case) try to place a late payment or default marker on your credit file that could impact you.

That type of action to my mind, would be a breach of data protection laws for which you should be entitled to compensation if not removed, though legal proceedings would likely be the only effective remedy there as the Ombudsman are next to useless.

Most of these common VT issues are just a game you have to play with lenders. Their policies fail to take these things into account and only when you threaten to sue or actually issue proceedings, do they typically do a 180 and then seek to settle - usually happens after they instruct external lawyers who tell them what they have done is in fact a breach of data protection, though they won't admit that.

[DrStamen]

Or, you could contact your bank and tell them that the direct debit payment was unauthorised as the contract had been cancelled before the payment was due. Under the direct debit guarantee scheme you are entitled to an immediate refund, and it would then be up to Close Brother to pursue you for that, although they may (worst case) try to place a late payment or default marker on your credit file that could impact you.

That type of action to my mind, would be a breach of data protection laws for which you should be entitled to compensation if not removed, though legal proceedings would likely be the only effective remedy there as the Ombudsman are next to useless.

Thanks for the swift response. The fear of getting a default marker on my credit file is my fear here, which is why I am reluctant to go down the DD refund route. I didn't realise the ombudsman are so ineffective....so thanks for managing my expectations!

[R0b]

Just bear in mind if you go through the FOS process and they ultimately don't find in your favour, then you could still claim under the guarantee scheme but due to the passage of time you might be required to provide evidence. Alternatively, you could start legal proceedings (before or after going the FOS route) for restitution, which is a claim based on one party benefitting from something at the expense of another. A common claim like this is where an employer overpays an employee their salary.

You may find that the time it takes you to exhaust the FOS process is around the same time, if not longer it will take you to go to court. Their admission that the contract was terminated before the payment due date is likely, in my opinion something that I think Close Brothers would want to challenge in court because it would be a non-starter.