Voluntary termination refused

[Jord894]

Hello,
I wonder if you could offer some further advice for me please Rob. The saga still continues, they are still refusing to VT the vehicle, I have made my complaint to the ombudsman and as the car in my opinion hasnt been mine since the 2/7/2020 I havent been paying them. They have now served me a default notice and have told me in 18 days they will resposs the car. My question is.. If the Ombudsman dont come back in that amount of time what should I do? SMF's internal complaints team have said im not allowed to VT and closed my complaint.

Really unsure how to progress here? IF they reposs the car, I can imagine it wont be long till I get court letters!

[R0b]

I'm afraid there's no magic cure for this.

The FOS route is a really long process at the moment and is going at a snails pace because of the lack of resources.

As for the default notice, it looks like they might be chancing their arm by issuing you with a default notice in the hope that you agree to cave in and pay up. Also bear in mind that these are just front line workers and are likely to be following the company policy. Coupled with the fact the default notice is probably an automatic thing based on how their systems work.

Having said that, I would proceed on the basis that if you don't do anything when the default notice expires then they may report your account as in default. At that point you will have enough ammunition to pursue legal action and sue them for breach of data protection for reporting inaccurate data. You could probably claim harassment too for seeking a debt that was legally non-existent. They would have to prove in court that you had no right to exercise your VT right because you didn't meet the 50% criteria - clearly the law says you can terminate at any time.

Be aware that if you don't take legal action and you decide to go down the FOS route, you could be waiting forever amd it may be the case that they don't award you as much compensation as a could. My personal experience of the FOS is that they appear to be stingy on compensation awards usually around £100-£200 in most cases. You could very easily look to claim around £750-£1000 through the courts, possibly more.

Whatever avenue you take is entirely your choice and only you can make that decision based on what you think is best for your situation. Are you prepared to accept responsibility and pay them the balance sought but then run the risk that they might mark your credit file anyway in which case you don't have much of a comeback. Going to court is not as easy as some might think and you do need to put the effort in to get the result you want.

In the meantime I think you should still continue to document t and file away all correspondence relating to thus. It might also help cement your position and send them a letter saying that you dont belive the default notice is valid because the agreement has already been terminated and you consider the pursuit of this amount is harassment. Any reporting of an adverse marker on your credit file would amount to a breach of data protection and you reserve the right to take legal action for both damages and rectification. If you want feedback on the response post it up and can take a look.

Either way, i wouldnt rush and make an immediate decision. Sit down and take a day or two to work out what you want to do and what is in your best interests.

[Jord894]

Hello Rob,
Honestly thankyou so much for you're help, I have now sent them another letter as you suggested - attached name is "For Rob".

Essentially I initially had a 3 month payment deferral from this company - I then realised I wasn't able to afford the car so started the VT process on July the 2nd. In June I asked for a further payment deferral for June, July and August which is also part of my complaint as they never answered. Today the complaints letter has come back to say they are still refusing my VT as im not at 50% and they have also granted my deferral on the terms I complete an income and expenditure form. (Obviously my stand point on this is I terminated the agreement in July so I wont be paying them again anyway) until an agreement is made for the 50%.

I have attached the complaints letter for you to see - they have added some legal contractual jargon.

I had a call yesterday from a gent at there payment centre who essentially said to me the car will remain in a collections state until the ombudsman give a reply - so I questioned "Even if that is 3 or 4 months", to which they replied "Yes". Do you know if im not paying them and this complaint carries on is this correct or will they as per the default they've placed against me repossess the car.

I advised them I am still under the impression the agreement ended on July the 2nd, I really just don't know what'll now happen next? I see you noted that court action could work, do you think my case is strong here and are we 100% sure VT is something I could have done? I wouldn't want too loose.

How would I go about court action? Will I need a solicitor to do this for me or await a court notice from them and present myself?

Again I really appreciate your help, there is just over 11k left and the car probably worth about 5k private, max probably 3.5k at auction so I dont want to surrender and end up with a huge debt!!

Thanks
******

[R0b]

Hello

Sorry I've been busy recently, I will take a look at this today.

[R0b]

As far as I can see from their complaint letter, they've clearly misrepresented what the CCA actually says. They made a brief reference in the letter to section 99 but then refer to section 100 and are relying on that provision to justify their reasons for refusing the VT.

There's a couple of points that flaws their position.

1. Section 99 and 100 need to be read together to fully appreciate how the VT right works.

2. You are absolutely right to refer to section 99 which makes it explicitly clear that you can terminate at any time before the final payment is due. Once you have terminated, section 100 kicks in to say that if you have terminated under section 99 but haven't met the 50% threshold, you are liable to pay the remainder. No where does it suggest or even imply that before you can exercise the VT right, you must have paid at least 50% of the total amount, which is what Specialist Motor Finance are claiming.

3. The reference to the "Termination: Your Rights" is a mandatory statement that must be included in all HP type agreements. The full wording is the image below and is effectively a restatement of Section 99 and 100 in layman's terms. Again, they've cherry picked certain parts of the statement, a clear misrepresentation and I suspect if you took this to court, they would get spanked. Like the actual legislation, the statement says you have a right to end the agreement by writing to the finance company (Section 99), and following termination, they're entitled to half the total amount (Section 100).

VT-YourRights.png

You don't need a solicitor and it's likely that the amount you are claiming will be less than what it costs for a solicitor to represent you so it's not worth it. However, you can do it yourself as long as you are prepared to go the distance and put the work in and meet the deadlines for filing things at court. The starting point is to send a letter before action to the finance company - hopefully at this point a legally qualified person will get involved and see sense, but if they reject your position, then you can start your claim using Money Claims Online service.

At the point of issuing your claim, you should inform the Ombudsman because they don't deal with complaints where legal proceedings have been issued. Obviously the amount you would be claiming is only going to be a fraction of the remaining balance to make 50% but I reckon you could probably try to claim around £1,000. The risk is that they could counterclaim for the full balance and then you would still be left to pay something, but it would give you about 6 months to save money and you could also claim as a defence an unfair relationship/non-compliance with their regulatory obligations and ask the court to stay their counterclaim, and consider a repayment plan.

The Financial Ombudsman might give you a different outcome (either better or worse) than what a court might decide, you just need to weigh up your options.

[Jord894]

Hey Rob,
Thanks for this, I have an update.

Specialist Motor Finances legal team have called me today, they are collecting the car within the next week and putting it into storage as I advised I would be cancelling the insurance. They are then going to await the outcome of the FOS before progressing.

They are still adamant that the 50% has to be paid immediate to do the 50% VT and im still not allowed to do it though, so not over yet!

Do we see this as a win for now?

Thanks
******

[R0b]

Well it is a small win but at least the car is out of your hands. I think Specialist Motor Finances need to get a new legal team if they can't understand that you have a right to terminate the agreement at any time. Like I said before, termination of the agreement is not depending on having already paid 50% and it is a common myth by all finance companies.

Nobody is arguing that they aren't entitled to the remaining balance to make up the 50% but they can't make it a condition when the law does not say that. They also have obligations as a regulated business under the remit of the Financial Conduct Authority, in particular the CONC rules dictate that finance companies cannot force a debtor to make a lump sum if they cannot afford it or would cause financial hardship - so their suggestion that the remaining balance has to be paid immediately is not strictly true in all cases.

You still have the option of going the legal route if you wish, but that's up to you. In the meantime I would suggest you build up a pot of money to pay the remaining balance off if and when the point comes.

[Jord894]

Hey Rob,
SMF have collected the car now and its in storage as I told them I was going yo cancel the insurance. I received the below from ombudsman at the weekend any ideas if this means I've won?

Dear Mr Hughes

Your complaint about Specialist Motor Finance Limited

Thanks for getting in touch with us. We’ve contacted Specialist Motor Finance Limited to tell them about your complaint – so they have a chance to put things right for you first.

Specialist Motor Finance Limited should get in touch with you soon. If you need to get in touch with them, their contact details are:

Specialist Motor Finance Limited

International House

Kingsfield Court

Chester Business Park

Chester

CH4 9RF

Next steps

Specialist Motor Finance Limited should give you their final response to your complaint – in writing – within eight weeks at the most.

At this stage, Specialist Motor Finance Limited should also let you know that you've six months from the date of their response to come back to us if you’re not happy.

We won’t take any further action unless we hear from you again – and I hope Specialist Motor Finance Limited can resolve things for you.

Kind regards

[R0b]

No I wouldn't say so. Sounds like the FOS has referred the matter back to SMF, presumably because you didn't allow SMF 8 weeks to resolve the complaint (if you call it that). Until that time has passed or you've received a deadlock letter, then you would need to follow the process, however if that time has passed or SMF have rejected your complaint then you can go back to the FOS and explain that.

[DBM1205]

Hi, I was just wondering if you have had anymore progress with this? We are having the exact same problem with the same finance company. Almost identical situation to you.