Excess mileage charge

[R0b]

Re: Excess mileage charge

Well the choice is yours really, you can go to the ombudsman, they will get charged £500 for the privilege anyway so its not cost effective but the choice is yours.

BMW seem to be relying on a contractual term but as I've said previously, s.173 CCA states that if a contractual term is inconsistent with the rights of a consumer then it is void. Whilst the Donnelly case is not exact or relates to a VT, it is a CCA case and is therefore relevant. The did comment that a person's liability is restricted to one-half where they invoke s.99. The defendant in the case did not as it was the creditor but the fact is that it was acknowledged that liability is limited under s.99 - something BMW have skirted around.

If you want to take it to the ombudsman I am happy to help with putting your complaint together, or if you want to just pay its up to you.

[taraoscar08]

Re: Excess mileage charge

What would you do if you were in my situation?

[R0b]

Re: Excess mileage charge

If it were me, I would complain to the ombudsman, you have nothing to lose.

Either way, if they want to have the debt acknowledged they would need to go to court, which of course their lawyers wouldn't do because from a legal perspective, the law is clear and in the eyes of the court, there have been commentary confirming limited liability.

Even if the ombudsman rejects your claim (possibly lack of legal understanding/interpretation) you are not obliged to pay them and i wouldn't pay them. They have failed to provide any substantive evidence that they have a right to the alleged monies. It contravenes what the law says and at the end of the day the Consumer Credit Act prevails over any contract you agreed to.

I also, have a complaint with the ombudsman about a VT I did some time ago, although it is not excess mileage charges but nonetheless, i's not going to cost you to take it to the next step, it will cost BMW.

[taraoscar08]

Re: Excess mileage charge

Ok great.

If you are happy to help me then I will complain to the ombudsman then. Like you say I have nothing to loose.

How can I get the ball rolling then please

[R0b]

Re: Excess mileage charge

To stop them passing this over to a debt collector, it is probably best to put them on notice saying you intend on making a complaint to the Ombudsman as stated in their letter/email and you will forward a copy of your complaint once it has been lodged.

I'll knock something up over the weekend as a start - you have 6 months to bring the complaint so it's not like there is any rush, and it is best to make sure the case is strong rather than rushed.


P.s. in correcting myself, lenders get 25 free cases per year. On the 26th and above they have to pay £550 per case being heard, but it is BMW that would need to pay if anything not you.

[taraoscar08]

Re: Excess mileage charge

Ok I will let them know.

Thanks very much for your help I really appreciate it.

[taraoscar08]

Re: Excess mileage charge

So I've just received an email asking to contact them... A week after I sent the email stating I am complaining to the ombudsman !! Left a message with them and waiting for a call back. Hopefully this is them not wanting it to go that far and asking me to call to discuss it. Or they are trying to get the money out of me even tho I told them I am raising a complaint. Can they force me to pay by releasing the debt to an agent to collect? Are they allowed to do that even tho I have informed them I'm seeking advice ??

[R0b]

Re: Excess mileage charge

More than likely, they might reduce the offer, but I think you should stick to your guns you have nothing to lose by going to the ombudsman. I will however post a draft complaint to the ombudsman no later than tomorrow early afternoon

[taraoscar08]

Re: Excess mileage charge

No probs rob thanks again for your help, will keep you posted

[R0b]

Re: Excess mileage charge

Morning,

Apologies for the late response however I have supplied a draft complaint template for the Ombudsman. You can keep it, amend it or do whatever way you wish but should be a good starting point for your complaint. I have referenced a textbook and shall upload the relevant pages for you to use tomorrow as I don't have them to hand.

To kickstart your complaint you will need to head to this page http://www.financial-ombudsman.org.u...complaints.htm and in the yellow box on 'How to complain' you will see a link for a Word version of the complaint, download this one.

The complaint template below should be inserted on page 2 where it says 'Please tell us about your complaint'. The rest of the information is relatively straightforward to complete. Once you have done this you should post it to the Ombudsman either recorded delivery or ensure that you get proof of receipt from the post office. You may also wish to send the lender a copy of the complaint also but it is your choice to do so.

All information highlight in brackets will be for yourself to complete as I don't have this information to hand. Any questions, feel free to ask.

Note: The conclusion section in which I have inserted compensation for administration and inconvenience costs is entirely optional, but worth at least suggesting a suitable amount which you have spent time on responding and replying to the dispute.

-------------------

Background
On [DATE] I entered into a [Conditional Sale / Hire Purchase] Agreement (the Agreement) regulated by the Consumer Credit Act 1974, with [LENDER] in relation to the purchase of a vehicle. The total cost of the Agreement amounted to [£XXX.XX] for a period of [XX months]. Under the Agreement, I had a right to terminate the voluntarily once I had paid at least 50% of the total cost of the Agreement (£[XXX.XX]). On or around [DATE] 2015, having paid [£XXX.XX] months and therefore surpassing the 50% trigger, I notified [LENDER] of my intention to terminate the Agreement.

On or around [DATE] 2015, [LENDER] confirmed the Agreement had been terminated however noted that the mileage of the car was over the stipulated amount in the Agreement. They therefore charged me [£XXX.XX] for excessive mileage on the vehicle. This is calculated at [XXp] per mile. I have continuously refuted the claims that I owe the alleged sum as I had terminated the Agreement in accordance with the Consumer Credit Act, and therefore my liability in this situation is restricted to one half of the total amount payable.


The issue

1. Are [LENDER] entitled to charge me [£XXX.XX] for excessive mileage.


Law relating to the Consumer Credit Act 1974
For reference, the following sections of the Consumer Credit Act 1974 (CCA) are applicable to conditional sale agreements and hire purchase agreements:

Section 99: a debtor has the right to terminate the agreement by giving notice to the creditor who is owed the sum of money at any time prior to the final payment under the Agreement (evidence 1).

Section 100: where the debtor terminates the agreement in accordance with section 99 of the Act, the debtor’s liability is limited to one half of the total price set out in the agreement. If the goods have not been returned in a reasonable condition, the amount may be increased (evidence 2).

Section 189: the definition of ‘total price’ means:

the total sum payable by the debtor under a hire-purchase agreement or a conditional sale agreement, including any sum payable on the exercise of an option to purchase, but excluding any sum payable as a penalty or as compensation or damages for a breach of the agreement’ (evidence 3)

Section 173: where a term in a regulated agreement which is inconsistent with any provisions of the CCA which protects the debtor is void. This section further clarifies that where a provision specifies a duty or liability on the debtor, the term under the agreement is void if it imposes directly or indirectly an additional duty or liability (evidence 4).

There are also several authorities on this matter both through the courts and textbooks. The case of First Response v Donnelly (2006 Durham County Court) related to a hire purchase agreement and the court considered whether or not a debtor was entitled to limited liability under section 100 of the CCA even though the agreement had been terminated by the creditor. It was confirmed by the court that limited liability under section 100 only extended to circumstances where the debtor exercised the right to voluntarily terminate the agreement under section 99 of the CCA (evidence 5). Furthermore in The Law of Consumer Credit and Hire textbook,it explains that a creditor is entitled to half of the total amount payable, including any monthly instalments which were due at the time of termination (evidence 6).


Application of law to the complaint
In relation to the excessive mileage charges, it is quite clear from the above that once a debtor has terminated the agreement in accordance with section 99 of the CCA, they are entitled to the protection of limited liability which is one half of the total amount payable. A lender cannot enforce a term against the debtor for breach of contract as the term is considered void as explained under section 173 of the Act. [LENDER] has suggested that because the vehicle has exceeded the mileage contained within the contract, the vehicle is not in a reasonable condition. Despite repeated requests to evidence its claims, [LENDER] has so far failed to qualify why the vehicle was not returned in a reasonable condition, nor has [LENDER] provided me with any evidence to prove the market value of the vehicle if it were in a reasonable condition and the market value of the vehicle in its current condition. There is no facts or evidence available to confirm that a vehicle is deemed to be in an unreasonable condition if the mileage of the vehicle is higher than is expected by the contractual terms.

In fact, it is argued that the mileage of a car is not always an indicator that the vehicle is in an unreasonable condition and is more about how the miles have been consumed. The vehicle under the Agreement was used predominantly for motorway driving, and therefore it could be said that the car is in a much better condition than it would be if the vehicle was used for city driving due to there being less wear and tear on certain parts such as the clutch or brakes. A vehicle which would is considered to be in a reasonable condition is likely to be mechanically sound, have service history, an MOT and may require some work to the vehicle; the vehicle does not need to be in excellent condition as this would be over and above reasonable. I returned the vehicle with all documentation including an up to date service and MOT and was roadworthy at the time of collection. It is therefore in my opinion that the vehicle was in a reasonable condition when it was returned to [LENDER].


Conclusion
On the existence of facts, evidence and the applicable law under the Consumer Credit Act, I ask the Ombudsman to conclude that:

1. The vehicle was in a reasonable condition at the time it was returned to [LENDER] and in any event, [LENDER] cannot charge for excessive mileage as it is inconsistent with a debtor's rights under section 100 of the CCA and thus void as per section 173 of the Act.

2. The Ombudsman make an award of costs against [LENDER], calculated as follows:

(a) £XX administration costs relating to the overall complaint pursuant to DISP 3.7.9;

(b) £XX resulting in the inconvenience of the complaint, [LENDER] providing inadequate responses as well as taking additional unnecessary steps to pursue the complaint in accordance with DISP 3.7.2 R; and

(c) any other award as the Ombudsman sees fit.

I enclose the following evidence as part of my complaint:

1. Photos of vehicle
2. Conditional Sale / Hire Purchase Agreement
3. The Law of Consumer Credit and Hire (Stephen Neville, Fred Philpott, William Hibbert, Julia Smith, Peter Sayer, Bradley Say, and Simon Popplewell), pages 378-379

[taraoscar08]

Re: Excess mileage charge

Thank you rob that's fantastic. I will edit it and send it on soon.

Thanks again for all your hard work I really appreciate it.

[R0b]

Re: Excess mileage charge

Thank you rob that's fantastic. I will edit it and send it on soon.

Thanks again for all your hard work I really appreciate it.

Tara, I've attached some additional PDFs which contains text on Consumer Law and Credit Hire book and the relevant sections of the CCA 1974 which you can add as part of your evidence.

[taraoscar08]

Re: Excess mileage charge

Morning

So I have just spoken with the financial ombudsman service and they have relaid to me that the evidence I've provided against BMW is fair and that we have signed documents to agree to pay such charges. He said they ant explore the legal ram and that if we don't agree we can go down the legal route ourselves. I informed him that the sales man said to us that we wouldn't have to pay such charges ref access milage we would only pay that if my husband ever handed his license back to the DVLA - I guess he meant it as if we were to stay with BMW for the rest of our driving lives. They said they would contact BMW and discuss this with them further this afternoon but I'm not holding out much hope due to this being a verbal comment and nothing in writing. The Sales man had also left the company now.... So my husband Is going to make a call later on to see if they would take an offer on the payment.

[R0b]

Re: Excess mileage charge

Morning

So I have just spoken with the financial ombudsman service and they have relaid to me that the evidence I've provided against BMW is fair and that we have signed documents to agree to pay such charges. He said they ant explore the legal ram and that if we don't agree we can go down the legal route ourselves. I informed him that the sales man said to us that we wouldn't have to pay such charges ref access milage we would only pay that if my husband ever handed his license back to the DVLA - I guess he meant it as if we were to stay with BMW for the rest of our driving lives. They said they would contact BMW and discuss this with them further this afternoon but I'm not holding out much hope due to this being a verbal comment and nothing in writing. The Sales man had also left the company now.... So my husband Is going to make a call later on to see if they would take an offer on the payment.

Not sure why they can't explore the legal side if the agreement is governed by the law?! doesn't make sense to me but nevermind. It is a shame that you are going to offer a payment as I think this is exactly what BMW would want by giving up and making an offer to pay. The fact is that the onus is on BMW to prove that the money owed is reasonable and that will be the difficulty. If they were so entitled to the money by right, don't you think there would be a lot of cases going through the courts on this matter? Clearly there isn't and you would wonder why that might be.

To give you an example, I was in the similar position before on a previous car, that has been well over 4 years now with nothing further heard from them after disputing the charges and to provide evidence. It's not viable commercially nor would they want to set a precedent which prevents them from doing so where a lot of people don't know their rights fully.

[kreig]

Re: Excess mileage charge

What a nightmare! Any update on this?

I have just received an invoice from BMW for excess mileage on my VT due to pro rata. It's only for around £250 but I am really reluctant to pay it.