Voluntary Termination - Specialist Motor Finanace

[Shaneo]

I currently have an on going issue with SMF where they will not action my request for VT as the vehicle does not have a valid MOT. They are holding steadfast on the HP policy where they state the Vehicle must have a valid MOT where lawful and that the vehicle must be in a saleable condition. I have checked section 99 Consumer Credit Act and not where does it state I am required to have a valid MOT so therefore I would assume this is unlawful and I have every right to return the vehicle as I have paid more than 50% of the HP. I have sent them letters where the first letter I requested that the respond with in 14 day, which the did not. So do I have a legal right to end the contract for ignoring me. Only on the second letter did they respond where they still refused to action a VT.

Here is the first letter:

I am writing to formally notify you of my decision to voluntarily terminate my hire purchase agreement under Section 99 of the Consumer Credit Act 1974. My account number is 33604611408, and the vehicle in question is registration ******

I have now paid at least 50% of the total amount payable under this agreement and, as per my statutory rights, I am exercising my right to voluntarily terminate the contract with immediate effect. I have £44.76 more to pay till the end of the month through standing orders. Which will meet the £9149.90 for termination.

Under Section 99 of the Consumer Credit Act 1974, I am entitled to terminate the agreement at any time before the final payment is due by returning the vehicle. Nowhere in the Act does it state that a vehicle must have a valid MOT to be eligible for voluntary termination. However, I acknowledge that any excess damage beyond fair wear and tear may be subject to reasonable charges.

The vehicle requires some minor repairs, specifically to the brakes and suspension, which I have already explained on a recent phone call. I already have the necessary brake discs and pads for the vehicle; however, due to a recent foot injury, I am unable to carry out the work myself. Additionally, I do not have the financial means to have these repairs completed by a garage. As brakes and suspension components are considered wear and tear items, any reasonable deterioration should not prevent the voluntary termination process.

I am making the vehicle available for collection at my address:******. You have until 31st March 2025 to collect the vehicle. If the vehicle has not been collected by this date, it will be declared SORN (Statutory Off Road Notification) and will no longer be legally driven or stored on a public road. I will not be liable for any further costs associated with the vehicle after this date.

Please confirm in writing within 14 days the next steps for collection of the vehicle. If you refuse to process this voluntary termination based on an invalid MOT, I will consider this an unfair contract term and seek further advice, including escalating the matter to the Financial Ombudsman Service. I expect this matter to be handled in line with your legal obligations, and I look forward to your response confirming the termination and collection arrangements.

Second Letter (which they responded they will not action the VT)

I refer to my letter dated [original letter date], in which I exercised my statutory right to voluntarily terminate my hire purchase agreement under Section 99 of the Consumer Credit Act 1974.

I received an acknowledgment email from you confirming receipt of my request, which stated that I would receive a response within 72 hours. To date, no such response has been provided. Furthermore, I provided a 14-day deadline for a written response and collection arrangements, which you have also ignored.

Regulatory Breach – Financial Conduct Authority (FCA) Rules

Your failure to acknowledge and act upon my statutory right to voluntary termination constitutes a breach of FCA regulations, particularly under the Consumer Credit Sourcebook (CONC 7.16.3R & CONC 1.2.2R), which require firms to:

• Act fairly, communicate clearly, and not mislead customers regarding their statutory rights.
• Ensure they do not unfairly delay or obstruct a customer’s right to exercise voluntary termination.

By failing to engage with me within your stated time frame and the reasonable 14-day period I provided, you are acting in breach of your FCA obligations to handle termination requests fairly and promptly.

Immediate Collection Required

I now formally demand that you arrange immediate collection of the vehicle (*********, Account No. 336046******) from my address: ********.

SORN Notice & Legal Clarification

If the vehicle is not collected by 1st April 2025, it will be declared SORN (Statutory Off Road Notification), meaning it cannot legally be driven or stored on a public road. I will not be liable for any further road tax, insurance, or maintenance costs beyond this date. Failure to Act – Daily Storage Charges As you have failed to collect the vehicle within a reasonable time frame, I will now be charging a daily storage fee of £15 per day for the vehicle remaining on my private property. These charges will accrue from 6 th April 2025 until collection is completed. Final Warning – Escalation to the Financial Ombudsman Service If you do not confirm collection arrangements within 7 days of this letter, I will escalate this matter to: 1. The Financial Ombudsman Service (FOS) for failure to uphold my statutory rights. 2. The FCA, highlighting your non-compliance with regulatory obligations. 3. Legal proceedings, seeking recovery of storage costs and any associated damages. This is now your final notice. I expect your urgent response confirming collection without further delay. Yours faithfully,

I called them and I had threats for legal fees (£505) and court action. I sent a third letter formally requesting a complaint to which I have received after a phone call today where the letter was dated 17th April, which I never got on that day. and further threats of default and an arrears payment to pay along with further court action.. is this allowed? and am i right in holding my ground for a VT? without MOT.

I have contacted the Ombudsman today who has asked me to email SMF to pause any action, payments and default action. Trading Standards are also on side with this agreeing with section 99 CCA. Your advise on this with be appreciated.

Thanks

[Pezza54]

Hi
Welcome to LB

Sorry to read you are having such a rough time voluntarily terminating your agreement

Please read the post "Voluntary termination" started by KEVINH on 16 July 2016 in the Welcome Forum

R0B posted very informative replies about the company's refusal to terminate the agreement whilst the car did not have a valid MoT

You have taken the best course of action by referring your complaint to the Financial Ombudsman

[Shaneo]

Thanks for the welcome and the information. I have seen that post and followed it in order of how it's laid out. After contacting the Ombudsman they suggested I contact SMF to to impose a pause on payments or legal threats.

In relation to previous 2016 forum post. Has anything changed since then? Am I still hold steadfast with my VT or could this all go horribly wrong for me.

[Pezza54]

There are no guarantees with the ombudsman or a court claim
SMF are probably going to argue with the ombudsman that you have breached CCA 74 S100(4) by not taking reasonable care of the goods. Although S100(4) does not state vehicles should be returned with a valid MoT, the agreement you signed does
The ombudsman could decide (and a judge order in court), that SMF collect the car, undertake the necessary work to pass the MoT and seek the costs of doing so from yourself

By not having the work done and obtaining a MoT certificate before the car is returned, you risk being liable for far greater costs

[Pezza54]

Did the car fail the MoT test? You stated you are aware work is required to the brakes and suspension