Jon0910 Voluntary Termination & Mileage Issues

[Guest]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Yes I think so, better still if he would consider VIP.

[Amethyst]

Re: Jon0910 Voluntary Termination & Mileage Issues

Done, think I've got the right posts so just shout if I have missed any xx

[Jon0910]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

I will ask permission

Possible response:

Many thanks for the response to my complaint.
I wonder if you could clarify some points raised within it for me.
The vehicle was terminated under section 99 of the consumer credit act 1974, the formula for calculating sums due upon termination are given in section 100.
From what you say a contractual term can override the legislation in this regard; I feel it important to explain the rationale for this.
Alternatively is it being said that a PCP agreement is not a conditional sale or HP as defined in the act and the legislation does not apply?
Or is it being said that it is for the trader to decide on what is “reasonable care”, if this case I would refer you to the unfair terms regulations, as the figure given in no way represent the normal usage of a vehicle as prescribed by various authorities.
Many thanks

Response received from the FOS adjudicator in reply to these questions;
As you point out, s99 of the Consumer Credit Act 1974 gave you the right to terminate the agreement. However, by signing the credit agreement you agreed to the mileage limit that applied and by exceeding that limit it could be argued that you had not taken reasonable care of the car as outlined in s100 of the act.In addition, s99(2) says that termination does not affect any liability accrued before the termination, as the costs relate to your use of the car prior to termination I believe this also means the business can pursue these costs.

It is for this reason, and on a fair and reasonable basis, that I do not think it is inappropriate for the business to ask you to pay the excess mileage costs.

[Guest]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Response received from the FOS adjudicator in reply to these questions;
As you point out, s99 of the Consumer Credit Act 1974 gave you the right to terminate the agreement. However, by signing the credit agreement you agreed to the mileage limit that applied and by exceeding that limit it could be argued that you had not taken reasonable care of the car as outlined in s100 of the act.In addition, s99(2) says that termination does not affect any liability accrued before the termination, as the costs relate to your use of the car prior to termination I believe this also means the business can pursue these costs.

It is for this reason, and on a fair and reasonable basis, that I do not think it is inappropriate for the business to ask you to pay the excess mileage costs.

Not sure what is meant by "could be argued", coming form the FOS as a regulator, on who's behalf are they arguing this. If they had put an access of 1 mile could it be argued that this was also not reasonable care ?

The test for what is reasonable must lie outside the agreement in the real world, otherwise the section is meaningless.

Seems hardly an equitable arrangement to me, and exactly who would be arguing this, would this not be a job for the court room.

Section 100(1) just says reasonable care, it does not say reasonable care as mentioned in the agreement, there are recognized standards regarding a reasonable millage allowance

There is a facility in section 100(3) for the court to award damages in relation to losses incurred by the creditor if the court decides they are due there is no such facility in section 100(1)

[Guest]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Response received from the FOS adjudicator in reply to these questions;
As you point out, s99 of the Consumer Credit Act 1974 gave you the right to terminate the agreement. However, by signing the credit agreement you agreed to the mileage limit that applied and by exceeding that limit it could be argued that you had not taken reasonable care of the car as outlined in s100 of the act.In addition, s99(2) says that termination does not affect any liability accrued before the termination, as the costs relate to your use of the car prior to termination I believe this also means the business can pursue these costs.

It is for this reason, and on a fair and reasonable basis, that I do not think it is inappropriate for the business to ask you to pay the excess mileage costs.

Quick off the mark with this response weren't they have we got someones attention.

[Guest]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

As an additional point such a term may well represent an unreasonable relationship between the parties under section 140, and as the regulator should know this also should be tested , if it only, "could be argued ", the burden of proof is on the other side.

[Guest]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

In a wider context this is an issue which is well overdue resolving.

Excess millage charges have been long used to manipulate the profitability of the agreement, it seeks to bypass the protections offered by section 99, by introducing a new charge in addition to the amount repayable under the core contractual terms.
This is not a charge which compensates for the misuse of the goods (as the act intended)this is an additional levy for the hire of the vehicle under what must be considered as normal use. It should be stopped.

[Guest]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Response received from the FOS adjudicator in reply to these questions;
As you point out, s99 of the Consumer Credit Act 1974 gave you the right to terminate the agreement. However, by signing the credit agreement you agreed to the mileage limit that applied and by exceeding that limit it could be argued that you had not taken reasonable care of the car as outlined in s100 of the act.In addition, s99(2) says that termination does not affect any liability accrued before the termination, as the costs relate to your use of the car prior to termination I believe this also means the business can pursue these costs.

It is for this reason, and on a fair and reasonable basis, that I do not think it is inappropriate for the business to ask you to pay the excess mileage costs.

OK so I may be repeating my self ad-nausium, but I think it neads repeating.

This chap seems to be under the impression that just because a term is included in a contract it makes it "reasonable", the act dos not say as "specified withing the contract "for a reason(sorry).

The test for reasonableness is well established in law, once one of the parties includes a definition in an agreement, it ceases to be "reasonable" and becomes just a contractual term. There would be no need for the expression to be used in the legislation.

[Jon0910]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

OK so I may be repeating my self ad-nausium, but I think it neads repeating.

This chap seems to be under the impression that just because a term is included in a contract it makes it "reasonable", the act dos not say as "specified withing the contract "for a reason(sorry).

The test for reasonableness is well established in law, once one of the parties includes a definition in an agreement, it ceases to be "reasonable" and becomes just a contractual term. There would be no need for the expression to be used in the legislation.

Andy, thanks, just playing catch up with your posts. I think they are deliberately missing the point as to accept otherwise would as someone commented earlier have significant ramifications for the finance industry as a whole. Not sure how to convince them!

[katorik]

Re: Jon0910 Voluntary Termination & Mileage Issues

Interestingly mine is with the same Leasing company and is currently with the Ombudsman as well. In my case Jaguar Cars Finance (FGA Capital) have placed a default against my credit report for the mileage claim.

I don't get this though - their clause is very specific :-

Termination : Your Rights
You have a right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods and to half the total amount payable under this agreement, that is £x.xx. If you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will not have to pay any more.

On speaking to them they are relying on the point that their mileage charge is pro-rata and therefore I assume they are trying to get away with it on the 'overdue instalments' bit? I don't see how they can argue it within anything else as the clause is very specific as to the 50% figure.

[Guest]

Re: Jon0910 Voluntary Termination & Mileage Issues

Interestingly mine is with the same Leasing company and is currently with the Ombudsman as well. In my case Jaguar Cars Finance (FGA Capital) have placed a default against my credit report for the mileage claim.

I don't get this though - their clause is very specific :-

Termination : Your Rights
You have a right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods and to half the total amount payable under this agreement, that is £x.xx. If you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will not have to pay any more.

On speaking to them they are relying on the point that their mileage charge is pro-rata and therefore I assume they are trying to get away with it on the 'overdue instalments' bit? I don't see how they can argue it within anything else as the clause is very specific as to the 50% figure.

The argument is that any millage clause should not exist, it is pre setting the condition for the VT before the car is even purchased. Directly contrary to the requirements of the CCA.

In addition it represents unfair term under UTCC 1999.

[katorik]

Re: Jon0910 Voluntary Termination & Mileage Issues

The argument is that any millage clause should not exist, it is pre setting the condition for the VT before the car is even purchased. Directly contrary to the requirements of the CCA.

In addition it represents unfair term under UTCC 1999.

I assume I will expect the same response as JON0910 though from the Ombudsman. During last conversation with FGA they stated they had legal confirmation to back up their stance - I assume they are using this recent Ombudsman decision as that basis?

[Guest]

Re: Jon0910 Voluntary Termination & Mileage Issues

I assume I will expect the same response as JON0910 though from the Ombudsman. During last conversation with FGA they stated they had legal confirmation to back up their stance - I assume they are using this recent Ombudsman decision as that basis?

Yes it is very disappointing. There is a definite try-able issue here, really they should not be making a pronouncement like this until the issue has bean tested in court.

It seems to go against the very idea of consumer protection under the VT,. The whole point of the section is that it takes the bargain out of the hands of the dealer. If they can then include a term in the contract which places an extra cost on the contract, then it is not effective protection.

You can of course contract for anything you like, if you both agree, so be it, however the CCA has rules about a Hire purchase / conditional sales agreements, so you would have to call it something else.

[katorik]

Re: Jon0910 Voluntary Termination & Mileage Issues

Yes it is very disappointing. There is a definite try-able issue here, really they should not be making a pronouncement like this until the issue has bean tested in court.

It seems to go against the very idea of consumer protection under the VT,. The whole point of the section is that it takes the bargain out of the hands of the dealer. If they can then include a term in the contract which places an extra cost on the contract, then it is not effective protection.

You can of course contract for anything you like, if you both agree, so be it, however the CCA has rules about a Hire purchase / conditional sales agreements, so you would have to call it something else.

on the assumption that they come back with the same answer as JON0910 then what is the next stage - I assume they will continue to pursue it through their debt collection agency and then I resist and it proceeds to court?

[katorik]

Re: Jon0910 Voluntary Termination & Mileage Issues

It looks like they are relying on this clause :-

Excess Mileage Charge 12.0 pence per mile in excess of the maximum annual mileage and pro-rata.

It's a very iffy statement to be relying on though?