BMW Financial Services - Voluntary Termination/Excess Mileage

[stuckcluckets]

Hello all! Just joined the forum after finding some very useful information courtesy of everyone here at LegalBeagles.

Back in July 2017, I chose to voluntarily terminate my PCP agreement with BMW Financial Services. I was about to venture into the world of home ownership with my first mortgage, and as such, I needed to get myself out of my agreement with immediate effect. I did some research into voluntary termination, and since I'd paid around £3,000 over the 50% mark, it seemed like the best route. Unfortunately, I had exceeded the mileage in my original PCP agreement. My PCP allowed for 9,000 miles per annum, and by the 3 year mark I'd reached a total of 45,000 miles - a total excess of 18,000 miles. My online research had prepared me for the possibility that BMW Financial Services might try and charge me for this excess mileage - I am very aware of my rights in law under the CCA, and as such I was prepared to dispute any potential claims made by BMW Financial Services. Surprise surprise, about 3 weeks after all was said and done (car collected and returned etc.), BMW Financial Services sent me an invoice for excess mileage charges (totalling approx. £2,100) along with a nice long letter full of waffle about why/how they are entitled to charge me for this under the CCA along with a scanned copy of my original financial agreement/contract document with them.

Needless to say, I chose to dispute their claim as per the advice I read online here at LegalBeagles. Here are the steps that I've followed so far:
- Completed BMW Financial Services official complaint process, including escalation stage 2. They, of course, rejected my complaint, claiming that I still owe them.
- Raised a formal complaint to the Financial Ombudsman, also including escalation to stage 2 (official review by an Ombudsman). Stupidly, they found in favour of BMW Financial Services, stating that this was because they "do not consider legislation when making their judgement" and only make an assessment based on what they believe to be "fair and reasonable" (I was aware based on articles I'd read online at LegalBeagles that the Financial Ombudsman were unlikely to find in my favour, but I thought it was worth a go). I, of course, chose to reject their decision.

So where are we now? There hasn't been a great deal of chasing on BMW Financial Services part in truth. I've received the following from them:
- A letter stating that my account with them is in arrears and that I must pay immediately or I "risk" further action being taken
- A couple of phone calls from them asking me whether or not I was aware of the charges outstanding, and whether or not I'd like to make payment over the phone
- A statement of my account, showing as still open with the balance of £2,100 pending

Up until recently, I'd pretty much left it be and ignored any contact from BMW Financial Services, but the statement of my account that I received recently prompted me to check whether or not all this fighting had impacted my credit rating at all. Normally I use ClearScore to regularly keep track of my credit file, though I decided on this occasion to get a separate opinion from Experian. What I found made me pretty angry to say the least. BMW Financial Services have marked the account as being voluntary terminated as of 01/07/2017, and updated the balance to show an outstanding amount of £2,100 (as I expected). What I didn't expect, however, is for them to claim that I have missed the last 2 monthly payments. They have added an entry for each month since my voluntary termination saying "missed/late repayment", despite there being no monthly fee to be paid. Interestingly, rather than applying the standard CAIS codes to each of these missed payments (e.g. code 1 for the first month missed, code 2 for the second), each entry shows as having a CAIS code of 0, which is applied where a balance is cleared/satisfied on or before the requested payment date - in other words, this code is applied to normal successful payments.

The above has had a significant impact on my credit score - it's dropped from around the 970 mark, to the low 600s, taking it into the 'Poor' category. Unsurprisingly, I'm pretty furious about this. So I'm here to ask for some advice r.e. getting my credit file amended and continuing my fight. BMW Financial Services should have marked my account with them as closed/satisfied the moment I chose to voluntary terminate, so keeping this open and effectively 'amending' the balance to try and claim that excess mileage is owed is without doubt entirely illegal, as are the additions to my credit file. I have written to them explaining my reasoning, asking them to amend my credit file accordingly, though they have responded with a refusal to do so. It is on this basis I would like to ask for some advice on:
- How to go about getting my credit file legally amended
- How to get BMW Financial Services to close the account as they should have done initially

I'm very much hoping that court isn't going to be the only solution here, as I'd hate for it to have to go that far, though I do appreciate that this is a realistic possibility at this point.

Some points to add:
- I notified BMW Financial Services about my wishing to voluntary terminate in accordance with the advice I read here at LegalBeagles. I wrote to them, stating clearly what I was doing and the date from which it would take effect.
- The car was reviewed by two BCA inspectors upon collection, both of whom confirmed the car to be in an excellent condition with no damages/marks to note (I have signed copies of paperwork documenting this). BMW Financial Services have not attempted to argue that the car has suffered excessive 'wear and tear' as a direct result of the higher mileage

Thanks in advance for all your help. I'll do my best to answer any questions you may have!

[Grahammcm1888]

Thanks for the reply. Everything aside , I didn’t think a lender could mark late payments after a period of six years irrespective of what termination of the VT meant.

[Pezza54]

Not any easy question to answer
The FOS is likely to side with the lender, as they did in Ms A v BMW Financial Services, DRN-4069998 May/June 2023. They went more with the terms of the agreement than CCA 74

The court could go either way. CCA 74 s99(2) states termination of the agreement does not affect any liability under the agreement which has accrued before the termination.
There is an argument that the charge for excess mileage accrued before termination, as does damage/defects beyond fair wear and tear
Others will say that these charges only crystallize after termination

In a case reported on this forum by RACHRAD (10.8.2017) the OP successfully defended a claim where the lender argued that excess mileage fell under the consumer failing to take reasonable care of the goods (CCA 74 S100(4)). Unsurprisingly the judge decided that excess mileage had nothing to do with reasonable care

[Grahammcm1888]

I appreciate that this is a very old thread but I was hoping for some advice relating to BMW still placing late payment markers on my credit file despite their alleged debt being over 6 years old. I was under the impression that this was not allowed. I did contact trans-union for some help but they were as much use as a chocolate teapot . What BMW are doing is basically shunting the late payment markers to keep within the 6 year period (picture attached). Here is transunions reply from BMW

Hi Graham,

Thanks for your email.

We have contacted BMW Financial Services Ltd again and received the below response:

"review of agreement we are reporting correctly - the voluntary termination was an agreement between us and the customer to pay an amount to end the agreement early. The customer never paid this amount therefore we will report as late until the matter is settled. the customer agreed to this when they entered the agreement - it is stated within their contract that they singed to settle any balance that falls due regarding the agreement. This amount falls within that clause, as we have not terminated the agreement via default the late payments will report until settled"

If you want to discuss this further, please contact BMW Financial Services Ltd directly. If they make any changes, these will filter through to us when they send us their next monthly update.

If I can help with anything else, you can email us at ukconsumer@transunion.com or call on 0330 024 7574. We’re open Monday to Friday, 8am to 6pm.


I terminated the contract so not sure where I stand or what I can do next?

[GreggM]

Same pish I just got, after over 2 years. Struggled to get a recent mortgage........a complete joke!

[fatmcgav]

Ashfox thats almost a carbon copy of the response I've just received from the ombudsman...

Really frustrating!

[Ashfox]

For anyone it might help, almost 2 years later I've had my reply from the Ombudsman and they have sided with BMW...

"I’m not persuaded that the provisions of the CCA would have prevented BMW from seeking payment of the excess mileage charge"

[Paul_D]

^^^ Love it! Keep up the good work. Armchair lawyers like you keep me in work and my bonus high.

[ostell]

I would suggest that you start a thread of your own if you want assistance but the way the legislation is written then there is no liability for mileage charges after a VT. It may have been BMW that were told by a judge that it wasn't payable but they still try.

I would agree with you though for the sake of £150 it's not worth the hassle.

[Paul_D]

Hello everyone. I was sent this forum post by my sister who is looking to get out of a PCP on a 1 Series as she & her partner now have a baby and want a bigger car. As a high court bailiff for >20 years, her sending me this was an attempt to convince me that my advice to her was wrong and that she won't be liable for an excess mileage charge.
In her case it is just under £150, so small beans. I've told her she can either pay it and settle her account with BMW and not hear anything again from them, or not pay it and suffer poorer credit terms for years to come, which given that she wants a bigger car and to take out a mortgage, will likely cost her far more than £150. BMW won't waste their time taking legal action for £150.
My job involves collecting money from people that have a high court judgement against them. 19 out of 20 times it's the 'Can Pay, Won't Pay' crowd, of whom my sister is one. 1 in 20 is genuine hardship due to ill-health or job loss. The former make my day and keep me in plenty of work, so feel free to dinghy your excess mileage charges

[Ashfox]

So I've just had my latest credit report and the outstanding mileage charge has been flagged as a missed payment (and reduced my credit score) ... Then it contradicts itself with the following commentary underneath.....



Voluntary Termination

What does this mean? The lender has reported that the account has been closed under Section 99 of the Consumer Credit Act 1974. This relates to hire-purchase and condition-sale agreements (credit used to buy a car or other vehicle) and allows you to return the car and owe nothing once you have repaid half of the total price.

[Dicksonk]

Thanks for coming back to me, grateful if you could let me know what the outcome is from the ombudsman if you don’t mind.

Thanks.

[Ashfox]

Just a letter from the ombudsman to say that they have contacted BMW to investigate the claim. No result yet!

I had a call from BMW debt collectors today to reiterate that if I didn't pay the amount it would be marked on my credit report. And offered that if I make full payment today and the ombudsman finds in my favour, they will refund the amount! How kind. I'm holding out to see what the ombudsman says before deciding what to do.

[Dicksonk]

Hi ASHFOX.

Just wondered if you have had a response yet from the Financial Ombudsman, I’m in a similar position with BMW Finance so would be interested to hear any update. Thanks.

[Ashfox]

I followed the process as suggested on this site and am going through the same issues with BMW FS regarding excess mileage charge.

Currently awaiting a response from the financial ombudsman, but not holding my breath based on other experiences I've read about.

Have just checked my credit report and the amount of excess mileage BMW claim I owe is now showing as the only outstanding balance (which they've told me will be a black mark next month when it falls more than 28 days due!)

Considering whether the easy way out is to try and offer a settlement with them as I'm worried about the damage that could be done to my credit score. Legal action would not be worth the cost that BMW are asking for so I don't see much other choice.

I have a colleague who has some experience in dealing with these kind of claims as a lender who has not seen this interpretation of the CCA used so loosely in order to pursue a charge in what is very much a grey area!

Just wanted to add my experience in case it benefits anyone considering VTing with BMW....