VWFS Voluntary Termination Damage Charge Dispute (Cont)

[Jypo]

Hi,
I previously posted this topic and didn't get a response and need further help.

Hi,

I'll try my best to go through this and hope I don't miss any details.

I recently voluntarily terminated a PCP finance contract (10,000 a year) on a Volkswagen Polo. I have owned the car for about 2.5 - 3 years. The car is a 12 plate (5 years old now) and had about 13,000 mile on it when I got it. My circumstances changed in the amount of miles I am now required to do so I needed to get rid of the car. I contacted VWFS and began the voluntary termination I was told on letter that I had nothing owed on the contract that I would be contacted by BCA and they would inspect the car. The car had 37,000 miles on it so I was quite under the mileage limit. I had all the documents and the car was fully serviced to manufacture recommendation. I also have pictures of the vehicle just before the inspection

After BCA inspected the vehicle I was told I owed VWFS £1400+ for damages to the vehicle (Which for the condition of the vehicle was absolutely ludicrous but I understand it may be the company trying to make up for lost value.) After the inspection I told BCA that I disputed the cost and was told I needed to contact VWFS to begin the dispute process. After going through the report I agree with £608.66 worth of the charges I contacted VW to dispute and was told I would have to wait for the official invoice before I dispute.

The official invoice has arrived and I have disputed parts I don't agree with over the phone and VW have confirmed I have entered the official dispute process. I am currently waiting for a response but presume that they will not budge on any of the charges. In the meantime after doing some research on this site, below I have drafted this letter. Please could someone with familiarity with this process tell me if it is okay?

Additionally, is an amount like £1400+ a number a finance company like this is willing to take someone to a small claims court?

Thank you for any help in advance.

Dear Sir/Madam
I am writing to you with reference to the above matter and your letter dated 16^th August 2017. Please note that liability in relation to the alleged outstanding balance for excessive damage to the vehicle is denied.

Section 100 (4) of the Consumer Credit Act 1974 explicitly states that there is an obligation to take reasonable care of the goods. Although the CCA does not provide a definition of what is meant by the word “reasonable”, a common sense interpretation in relation to a vehicle is that it must be returned in a roadworthy condition i.e. it has an up to date MOT, serviced regularly and mechanically sound. A fair and reasonable vehicle taking into account its use may have some minor cosmetic defects (which would include touch ups to the paint and body of the vehicle) but not major defects that would make the car undesirable.

Additionally, you have referenced the BVRLA’s Fair Wear and Tear Guidelines. The BVRLA Guidelines are used in relation to leasing and renting of commercial vehicles; the guidelines therefore have no relevance to this dispute as the vehicle under the Agreement was a non-commercial vehicle purchased at a dealership.

The vehicle was maintained in a reasonable condition throughout the period of the agreement and therefore such damage charges you are claiming would amount to fair wear and tear; the vehicle does not need to be returned to you in any better condition other than a reasonable one. Photographic evidence was taken prior to the vehicle being transferred to you which clearly shows that the vehicle was in a reasonable condition. The onus is on you to prove that the alleged damage caused was more than reasonable fair wear and tear.

Notwithstanding the above, I am prepared to pay a reasonable sum of £608.66 in full and final settlement relating to the wheel LHF, wheel RHF, tyre LHR, tyre RHR, screen front, rear bumper and VAT. Any additional charge I will decline as I feel that this is a fair and reasonable cost for the condition of the vehicle on its return to you.
Please confirm by return that you agree to the payment above.

Yours faithfully,

I need some further help, I was asked to contact the VW finance and was told that they agree to take some of the damages off but will not budge any further. They have full and final settled on £1250, I said I still don't agree with the charges and told them that I will have to contact the financial ombudsman to get an additional opinion.

Please could someone give me some advice and how I should word the letter to the financial ombudsman and what to address?

Again I agree to some of the charges but not all of them.

Thanks in advance.

[Kati]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

tagging [MENTION=71570]R0b[/MENTION] xx

[R0b]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

Sorry I did not get back to you on your first post, you are best off tagging me like Kati and I will be notified otherwise your post may not always be picked up.

You are in a situation like many other people on this forum and the question is really up to you as to what you would like to do. Yes, the CCA allows compensation under section 100(4) but that liability is not a strict one i.e. if you breach it you must pay XYZ. The onus is on the lender to prove two things:

(1) that the car was in an unreasonable condition following the return of the vehicle; and

(2) provide evidence to show the market value of the car's current condition and the value of car had it been in a reasonable condition. Upon satisfactory evidence being provided, the lender will be entitled to the difference.

The mistake that both lenders and those who post on here is that if they are in breach they must pay the costs of repair - that is not the case. By paying for the cost of repairs then the car will ultimately be in more than a reasonable condition, which is beyond your obligations under section 100(4) in that it only requires you to take reasonable care of the goods. The well repeated Court of Appeal case Brady v St Margaret's Trust explains this (see below).



The fact that the car is second hand is even more reason why it would be difficult for VWFS (in my opinion) to claim the full amount of damages. The BVRLA guidelines do not take into account the age of the vehicle when determining whether the scratch or dent falls within the acceptable standard. It also assumes that the car is always brand new, is contrary to section 100(4) in that it is a much higher standard than reasonable hence it is generally geared towards commercial hiring and leasing than consumer because the obligations contravene provisions of the CCA for starters.

Sometimes for the sake of it, you might be better off to accept certain parts and pay for certain amounts of damage at the cost they are claiming to show you are reasonable, but you can still negotiate that cost if you feel it is too high. Though you should back this up with evidence i.e. provide quotes you've been given if the cost being claimed is on the high side.

All in all, whatever you do is your choice and it is possible that VWFS may record a default on your credit file if you refuse to pay in full. If this is the case then you may have a claim for breach of data protection in failing to keep your data accurate but also in breach of the ICO guidance on recording defaults - If you end up going down this route I am happy to assist where I can. If you are not prepared to follow this through then I would say give them what they want and pay up, otherwise do what you feel comfortable agreeing and not agreeing to.

[Jypo]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

Hi [MENTION=71570]R0b[/MENTION],

Thanks for getting back to me so fast with the good information.
Not to worry about missing the post, it was posted in the wrong forum category.

I may just pay in the end and accept the sting on this one.

In your opinion would it be worth escalating it to the financial ombudsman or would the result be the same? Just for another opinion on the situation?

They argued on the phone that although it did not mention in my contract that they would use BVRLA guidelines, they stated that because the contract included the car would need to be in reasonable condition and they mentioned it in the voluntary termination letter that I am liable to pay the charges; seen as I had an opportunity to investigate the car myself?

They also stated that after multiple opinions they believe that all those damages breach the wear and tear.

[Jypo]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

Additionally, they stated that they have sent a letter for the full and final settlement. I asked if they were willing to investigate my case further and got declined.
With this being the case, how could I go about negotiating the final payment?

Thanks.

[R0b]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

The FOS are a pain in the backside and until there is a legally binding authority, they just do as they please and tend to favour the lender.

If there is nothing within the agreement that says the condition should be in accordance with BVRLA I fail to see how they can rely on that as evidence that you agreed with the use of it - it would be odd if its not in there because it seems standard in most HP contracts if not all.

I've tried in many different ways to get the FOS on board short of sending them the case law as evidence but they just read the contract then accept what the lender says and that's that. Bear in mind the FOS look at what is reasonable but must also take into account the law and if they deviate they must explain their reasons why. My view is that they are not acting impartially and are also not doing their jobs properly but unless someone makes an application for a judicial review to question the FOS (which is expensive) they will keep doing the same thing.

If they aren't willing to accept anything lower and your not prepared to defend the matter in court then you've only got one choice. Be warned however, even if you do pay them, they might still apply a default to your credit file in which case its a lose-lose for you and you are unlikely to have any further recourse against them.

[R0b]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

I'd like to add that if you do settle and come to an agreement, you could try to negotiate by saying that payment is conditional upon:

1. the payment not being construed as an admission of liability whatsoever; and

2. VWFS agree/undertake not to record any adverse entries in respect of this HP agreement.

By doing the above, it would amount to a contractual agreement and if they breach it you can claim damages, but at the same time, the second point may also prompt them to record a default - so its a risk but the risk is up to you.

[Jypo]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

I hadn't realised that disputing the agreement and having the total sum adjusted would result in it making my credit file bad!

So if I don't want this to get marked on my credit file (because I'm likely to start applying for mortgages in the next 4 years) would I have to contact them before I pay and ask:

1. the payment not being construed as an admission of liability whatsoever; and

2. VWFS agree/undertake not to record any adverse entries in respect of this HP agreement.

Am I correct in assuming this stops the credit rating getting marked? Or if they mark it I can claim damages?

[R0b]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

It shouldn't because the ICO has explicitly stated in its guidance that businesses should not record a default if the balance is made up solely of fees and charges - alleged damage to the vehicle is just that. Nonethless that doesn't stop lenders from recording a default usually in the hope that it persuades people to pay up and they get too scared and as I said, are left with a double whammy.

If they agree to the conditions then it effectively becomes a settlement agreement which would be binding for both in that you agree to pay X if they don't do Y. It would also amount to a misrepresentation by VWFS if they breach anything agreed. Whether they will accept those terms is another story and if they don't then you will have to decide what you want to do after that.

[Jypo]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

Okay, I will most likely contact them to clarify see what they say.

Again, thanks for all the info and help Rob, you're a legend.

Josh

[R0b]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

No worries, be sure to get it in writing otherwise you'll have a much harder job if you don't.

[JazzJPH]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

Okay, I will most likely contact them to clarify see what they say.

Again, thanks for all the info and help Rob, you're a legend.

Josh

How did you get on?

[Jypo]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

How did you get on?

Hi JazzJPH,

It's been a while since I got this sorted, but I did not escalate it any further.
I got £200 knocked off the initial £1400+ making the final payment about £1200. I did not escalate to the financial ombudsman and accepted the charge with a harsh lesson learnt unfortunately .

They did not mark my credit file and I believe the finance is just shown as "settled". I made sure I got a confirmation email before paying and haven't heard anything since. Anytime I made an argument it just seemed the VWFS had been down the road a thousand times before and just had an answer for everything I put forth.

I didn't really want to take it any further (like small claims) either because I'm due to try and get my first mortgage soon and didn't want it on my credit file in case I lost.

Hope this helps.

[JazzJPH]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

Hi Jypo,

Fair enough - it looks like that's the way to go. I have looked through a lot of VWFS topics on here and haven't found anyone beat them.

[Jypo]

Re: VWFS Voluntary Termination Damage Charge Dispute (Cont)

Hi Jypo,

Fair enough - it looks like that's the way to go. I have looked through a lot of VWFS topics on here and haven't found anyone beat them.

It looks that way, I experienced the same thing when I looked. I would still dispute everything if you haven't done so. That way they review everything and knock some of it off, but after that it's completely your choice.