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

[svkl]

Hi Rob, just had their reply

We are aware you want to terminate the agreement – the account needs to be brought to a half paid before the completion can commence as if it was done today – you would be voluntary surrendering the vehicle and then you may be liable for more as when the vehicle is sold at auction this amount comes of the outstanding balance on the agreement and that’s the amount you would be liable for.

The amount to bring over a half is £****.** – which needs to be paid before we collect the vehicle.

[R0b]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

I'll post up a response soon for you

[svkl]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Thanks

[R0b]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Dear [NAME],

With respect, s.99 of the Consumer Credit Act stipulates an unqualified right to terminate the agreement at any time prior to the final payment under the agreement being made. There is no condition attached to this right insofar as that I must bring the account up 50% and so your interpretation is simply incorrect. Whilst I do not disagree that I owe £XXX.XX, the Act states that a person who terminates under s.99, the person is liable for any payments up to one half of the total amount payable. It does not however, specify that a person must have paid one half of the total amount but merely that they are liable for any payments up to that amount. Should you believe otherwise, please therefore point out the relevant section of the Act which explicitly obliges me to ensure that I must pay one half of the total amount payable before the agreement can be terminated.

To reiterate, notice has been given to you that the agreement is terminated in accordance with s.99 of the Consumer Credit Act 1974 and I am not surrendering the vehicle voluntarily. For the reasons set out in the above paragraph, the agreement is deemed terminated effectively immediately, and I am willing to pay the outstanding balance of £XXX.XX within the next 14 days.

I am prepared to retain the vehicle for a further 14 days from the date of this email. Should continue to maintain your position and fail to collect the vehicle, I will have no choice but to return the V5C document to the DVLA and inform them that you are the new registered keeper. I will also cancel any tax and insurance remaining on the vehicle as ownership and liability now lies with you.

I would therefore urge you to arrange collection of the vehicle at the earliest opportunity to avoid any issues with the vehicle. Alternatively, I am happy to deliver the vehicle to a specific location provided that you confirm in writing to agree to pay all reasonable fees in doing so.

Regards,

[svkl]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Excellent Rob, thanks, have sent it off. I take it i can just ignore the part about making up the shortfall in the remaining balance (after 50%) when they sell it through the auction, have seen on a previous thread another finance company tried this

[R0b]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

ahh sorry I missed putting that bit in the email.. yes you can, the agreement is terminated liability is restricted I have no idea what they mean by the vehicle value is deducted off the remaining balance and you must owe the rest. This would be considered as tort of deceit, or fraudulent misrepresentation but thats more difficult to prove. Liability is restricted to payments of 50%, once you hit this mark they cannot charge you anymore thats remaining on the agreement.

Just out of curiosity who is the lender, it isn't GMAC is it?

[svkl]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Hi Rob, thought that was the case with shortfall after it goes through Auction. The Lender is Close Brothers Motor Finance, have you heard of them

[R0b]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Yeah I have my insurance through them.. my only experience of them is they seem to be a bit useless when it comes to paperwork. You are probably talking to someone who has no legal knowledge and is being told what to do by their superiors so don't expect them to back down.

[svkl]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Morning, received this from them, think they are trying to say they cant take the vehicle back with any outstanding balance outside the 50% and also the liability would include any shortfall when they sell the vehicle at auction against what is still owed (as you said this is not legal)

You can had the vehicle back at any point during the agreement – but you will have a liability.

If you have paid up to half of the agreement you can hand the vehicle back with no further liability, as stated previously all vehicles are subject to inspection.

In the terms and conditions of your agreement it tells you the relevant information regarding voluntary terminating and handing the vehicle back.

If you are to terminate now it will be with a liability – we cant physically terminate an agreement and collect this then wait for you to pay up to a half.

It would be termination with liability, which would be the shortfall payment of when the vehicle is sold at auction. This could end up being a higher balance than if you were to pay over a half.

We can collect the vehicle in 14 days time, but as stated before we cannot collect the vehicle then wait for it to be paid over a half.

If the vehicles tax and insurance is cancelled before you will be breaching your contract by doing this and the terms and conditions state we have to have all vehicles taxed and insured.

Look forward to hearing from you in due course.

[R0b]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

You can respond something along the following lines:

You have suggested that I can return the vehicle once I have paid at least 50% of the agreement, but you have yet to provide me with evidence that this is the case under the Consumer Credit Act 1974. Whilst the vehicle may be subject to an inspection, this does not prevent termination of the agreement.

Your assertion that you cannot physically terminate the agreement without payment is without merit, the Act gives the debtor an automatic right to terminate the agreement under s.99 regardless and you would therefore be implying that I am unable to do this. s.173 explicitly states that a creditor cannot contract out any provisions and this includes the right to terminate and attempting to do so will deem the particular term void.

Furthermore, I am a little puzzled by your statement that should I terminate (which I have done already) then it will be with liability. The Act limits my liability to one half of the total amount paid provided that the vehicle is returned in a reasonable condition. As your statement contradicts the statutory position, please can you explain which section of the Act enables you to hold me liable for the difference between the vehicle sold at auction and the amount outstanding? Nonetheless, any attempt to recover this amount will be defended.

As regards to the vehicle, the agreement is now terminated and responsibility as to tax and insurance now rests with you. Out of courtesy, I am willing to retain tax and insurance on the vehicle for a further 14 days so as to enable you to arrange collection. As explained in my previous email, by failing to do so I will cancel both the tax and insurance without further notice. I note that the terms and conditions state that the vehicle must be taxed and insured however, as the agreement is now terminated, that provision no longer applies.

In light of the circumstances, you have made it quite difficult for myself to exercise my rights under s.99 of the Act and on the face of it, appear to be refusing to accept my notice of termination which is a statutory breach. As such, I therefore wish to invoke your complaints procedure in relation to this matter. Alternatively, if your position remains the same, please supply me with a final decision letter confirming this is the case so that I may take this matter up with the Financial Ombudsman.

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It seems like they are trying to imply that you are surrending the vehicle which is different to VT. This means you hand back the vehicle and are liable for the full amount. you've repeated on several emails now that you have not surrendered the vehicle and now they are just being awkward. So the next steps is to complain to the ombudsman - they are restricting your right to terminate which they are not allowed to do.

[svkl]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

i am trying to get a loan to pay of the remaining 50% before the 14 days are up so their nonsense about paying the balance after auction would not apply as they have stated if i pay the balance to take it to 50% it will be terminated without liability, never heard of surrendering the vehicle but you are right think they are trying to imply that and yes i have stated on a few occasion i am not i am VT it. will send above off to them

[R0b]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Voluntary surrender is also known as voluntary repossession, if you can pay off the amount within 14 days great if not then you are merely liable for the amount oustanding i.e. it is deemed a debt and can be pursued through the courts. There is nothing explicit within the Act that says you must pay 50% before you can terminate, the key word is that it says you can terminate at any time before the final payment is made.

Anyway, if you have sent that example off to them, then they will have to treat this as a complaint and will have 8 weeks to respond before you can go to the ombudsman or less if they supply you with a final letter.

[svkl]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Hi, sent your example off and received their reply form a different administrator than the person i was dealing with, it is a bit more conciliatory and they state they are not refusing my VT, do you think i should reply stating i am trying to raise the funds to pay the 50% and hopefully within the next few days, anyway, here is their reply.

Good afternoon,

Thank you for your email. Please find attached a copy of your agreement along with the terms and conditions for your perusal. The terms and conditions of the agreement state
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 £9,541.08. 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. Your remaining liability is £2110.28. The agreement is not terminated until the vehicle is back in our possession and collected by our agents.

Should the vehicle be collected without paying up to half of the agreement and this remains unpaid then there would be a liability for you to pay. We are able to arrange for the inspection and collection of the vehicle for a specified date and time arranged and should you wish you can call us on the day the vehicle is being collected to arrange to pay the £2110.28.

Until the vehicle has been signed over by our agent and back in our possession it is your responsibility to ensure the vehicle is insured and taxed and kept in your possession until this time when it is collected. This forms part of your agreement under section 3. We are not in any way refusing the voluntary termination of your agreement.

Please can you confirm what date you wish for us to notify our agents to arrange to collect the vehicle. I have noted you have advised that you would be unable to make the payment to bring your agreement up to 1⁄2 for 14 days. Should we notify our agents of this also?

I can confirm that we have as requested registered this as a complaint however I hope my explanation and confirmation of the documents attached resolves your query regarding the voluntary termination of your agreement.

Should you require any further assistance please do not hesitate to contact us.

[R0b]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Do you have the means to pay the outstanding amount as it is quite a bit of money that is owed - What is the reason for you wanting to VT the agreement? If you can't afford to meet that amount then it might not be wise to continue to maintain that you are wanting to VT. You should only do so if you have the means of paying the remaining balance and if you are confident of being able to pay them soon then that is fine, otherwise you remain liable for the amount which is a debt that can be enforced through the courts. If taken to court you will likely end up with a CCJ if you cannot pay within 30 days of the judgment or earlier.

So before I help you any further, you might want to consider your options and whether it best to continue making monthly payments as you've said you are looking to raise the money or you still wish to insist on the vehicle being collected.

[svkl]

Re: 1:Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

i hope to have the £2k balance within the next week, this will bring down my monthly payments to a manageable amount, so i hope to continue with the VT, i will not reply right away and see if i here anything back regarding the loan