fixed sum loan agreement and bill of sale

[Guest]

Re: fixed sum loan agreement and bill of sale

many thanks for dropping in peter

ill throw another spanner into the works

this has allready been to court and the creditor withdrew due to a defective default notice last year

prior to that court action, the creditor did a repo on the vehicle using the bll of sale security.

now if the bill of sale was not in order at the time of the repo and the original default notice was flawed also

what redress does the debtor have

the creditor has done new proceedings now as they have issued a second valid default notice as to the harrison judgement

As i understand it, if the goods are reposessed in a bill of sale arrangeent then the value must be offset against the amount owed.

So the amount outstanding on the loan should have been reduced by that amount, this should be reflected in figure on the default notice.

Something to keep in mind is, if the totall amount paoid prior to the reposession is equal to one half of the credit then nothing is payable on return of the car under section 99 under a normal HP arrangment.
It may be that they are using the bill of sale as a method of avoiding this, i would need more details of how much has been paid etc.
If this is the case then as i said earlier they would still have to credit the value of the car to the account.
Peter

[postggj]

Re: fixed sum loan agreement and bill of sale

if the repo was illegal as the bos was invalid at the time, would s.92 come into play if a third had not been paid instead of s.90

f the bos was invalid then the protection reverts back to the original credit agreement it was secured against

[postggj]

Re: fixed sum loan agreement and bill of sale

also

as the agreement was not as such terminated following the repo last year

the creditor has just issued another default notice so as the accunt was not terminated at the time of the repo

WOULD AN ACT OF CONVERSION NOW APPLY


The only way the Debtor could claim conversion or wrongful interference would be if the goods were repossessed without prior termination, or the Default Notice is seriously deficient.

[Guest]

Re: fixed sum loan agreement and bill of sale

HI

Yes you have a point repossessing without a default, the only thing is that I am not sure if that would be enforcing the bill of sale rather than the agreement. I am sure that this is what they would say I will have a look around and get back meanwhile have a look at this

http://nds.coi.gov.uk/content/Detail.aspx?ReleaseID=417641&NewsAreaID=2
28 January 2011 09:00 Department for Business, Innovation and Skills (National)
The Government announced today that the ‘Bills of Sale’ money lending industry will be working under a new Code of Practice from 1 February 2011. Lenders will also provide customers with a plain English information sheet explaining how bills of sale work, and what the customer can expect from the lender.
A bill of sale is used to secure a loan on a consumer’s personal property, typically a car. Concerns were raised that this form of loan could lead to consumer harm. As a result, the Government consulted on whether any action was necessary.

Consumer Minister, Edward Davey, said:

“It’s important that we clarify what’s involved in a bill of sale loan. There have been concerns in the past about how difficult they are to understand, so this Code of Practice and the plain English information sheet should provide more transparency on what a loan entails for both the lender and the consumer. I welcome the fact that the majority of the industry has already signed up to abide by this code.”

The Government felt that any ban could restrict consumer access to credit, reduce choice and push up prices. This could also potentially force some consumers into the hands of illegal lenders. It was also felt that it would be disproportionate to ban an industry because of a few rogue lenders.

Added consumer protections from the new Consumer Credit Act will come into force on 1 February 2011, and the OFT will monitor the industry under the Irresponsible Lending Guidance, which will have a positive impact on consumer rights for bills of sale loans.

Notes to editors:



1. In summary, the Code of Practice says:


borrowers who are in arrears will be able to hand over the car in full settlement of their debt and will not be liable for any shortfall between the outstanding debt and the value of the vehicle;
the option of making balloon payments* will only be available to business customers who can provide evidence that they will have funds to make the final repayment;
the bill of sale must be registered with an asset finance register so that the public can check whether a vehicle has a bill of sale registered against it;
charges to be imposed on borrowers in arrears must be disclosed at the pre-contractual stage and must only cover the lender’s costs;
if a borrower gets into difficulty, lenders must consider proposals for alternative payment arrangements and will repossess the car only if attempts to arrange alternative payment arrangements fail; and
lenders will take all reasonable steps to ensure that repossessed cars are sold for the highest obtainable market price.

*Balloon payments are small initial repayments covering only the interest, with the capital to be repaid in a single final payment.

2. New regulations implementing the Consumer Credit Directive will apply to a loan taken out under a bill of sale. They will give consumers new rights and impose new requirements on lenders:


Lenders will have to make a reasonable assessment of whether a borrower can afford to meet repayments in a sustainable manner.
Lenders will have to explain the key features of the credit agreement to enable the borrower to make an informed choice.
Prospective borrowers will be given an information sheet setting out all the relevant information about the credit agreement. The information sheet will be in a standard format for all lenders so borrowers can easily compare the costs of different loans. (The proposed new information sheet for bills of sale will complement this by setting out the key features of a bill of sale.)
Consumers will have an absolute right to withdraw from a credit agreement within 14 days, paying back only the money lent and any interest accrued over that time.


3. The OFT recently introduced Irresponsible Lending Guidance. It will give all consumers, including bills of sale customers, added protections by making it clearer what business practices could be considered irresponsible in a credit agreement. The OFT can impose a range of penalties (including removing the lender’s credit licence) for those not complying with the law or the guidance or otherwise engaging in unfair or improper business practices. You can find out more at http://www.oft.gov.uk

4. The full consultation response can be found on the Department for Business, Innovation and Skills website: UK Department for Business, Innovation and Skills | BIS

5. BIS' online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See Newsroom | BIS for more information.
Contacts
NDS Enquiries
Phone: For enquiries please contact the issuing dept
ndsenquiries@coi.gsi.gov.uk

[postggj]

Re: fixed sum loan agreement and bill of sale

QUOTE

you have a point repossessing without a default, the only thing is that I am not sure if that would be enforcing the bill of sale rather than the agreement

YES BUT IF THE BILL OF SALE THEY ARE USING TO ENFORCE IS NOT COMPLIANT, IS THERE A BILL OF SALE AT ALL
THAT IS, IN LAW

[Guest]

Re: fixed sum loan agreement and bill of sale

QUOTE


you have a point repossessing without a default, the only thing is that I am not sure if that would be enforcing the bill of sale rather than the agreement

YES BUT IF THE BILL OF SALE THEY ARE USING TO ENFORCE IS NOT COMPLIANT, IS THERE A BILL OF SALE AT ALL
THAT IS, IN LAW

Yes i agree as you will see if you look at my first post on this, also the OFT seem to agree read this i copied it from the other thread where i posted it yesterday.

OFT COMMENTARY ON BILLS OF SALE*

In researching the area of car finance two authorities gave us details of cars being sold under a Bill of Sale. We have looked at the Bills of Sale Acts (BSA) and their interaction with consumer credit legislation and the Office's view is set out below. We have also researched how to check if a Bill of Sale has been registered.

Royal Courts of Justice

The Bill of Sale must be witnessed and registered at the Royal Courts of Justice, in the time and manner set out in the BSA, otherwise it will be void and cannot be treated as a licence to take possession. You can check if this has been carried out by making a written request to the Court
and paying £5 or visiting there in person and searching the register for free. To search you need to
know the name of the borrower, their address and the year of registration.The entries in the
register are made alphabetically in the name of the borrower.
The address is:
Room E17, East Block Ground Floor, Royal Courts of Justice, Strand, London WC2A 2LL**

Bills of Sale Acts

As we understand the position –
a. Buying a car under a bill of sale will be a regulated consumer credit agreement
b. The goods will not become ‘protected’ in the same way as for hire-purchase agreements (for which section 90 of the Consumer Credit Act 1974 provides that if the consumer has paid one-third or more of the total price of the goods, the creditor cannot recover possession except by judicial proceedings or consent).
c. However, the creditor will not be able to enforce the security unless he has first served a default notice under section 87 of the Consumer Credit Act 1974 and this has expired (after not less than 14 days) without remedy or the debtor applying to the court for relief.
d. If the creditor repossesses without a valid default notice, the consumer may apply for an injunction or a time order, or seek damages for breach of contract.
On this basis, whilst the consumer will have less protection under a bill of sale than under a hirepurchase agreement, he will not be completely unprotected, and the creditor will be at risk of licensing action if he acts unfairly.
In addition –
e. The bill of sale is given as security, and where this is provided in relation to a regulated consumer credit agreement it must comply with section 105 Consumer Credit Act 1974. f. The credit agreement must embody any security, by virtue of regulation 2(8) of the Consumer Credit (Agreements) Regulations 1983. A document embodies a provision if the provision is set out in it or in another document referred to in it (a bill of sale will usually be
incorporated by reference).
g. The debtor must be provided with a copy of the bill of sale, pursuant to sections 62 and 63 Consumer Credit Act 1974, since this is a document referred to in the credit agreement.h. If the bill of sale does not comply with section 105 of the Act it will be unenforceable by virtue of section 106. Furthermore, if the credit agreement does not comply with the Consumer Credit Act 1974 so that it is unenforceable, this will preclude the exercise of any remedies under the bill of sale (except pursuant to a court order where relevant).
i. The bill of sale must also comply with the statutory provisions in the Bills of Sale Acts. In particular, it must be in the form given in the schedule to the Bills of Sale Act (1878)
Amendment Act 1882, otherwise it will be void and cannot be treated as a licence to take possession.
j. The bill of sale must also be witnessed and registered (at the relevant department of the Supreme Court) in the time and manner set out in the Bills of Sale Acts, otherwise it will be void in respect of the chattels comprised in it.
1k. In practice, the majority of such bills of sale may well be unenforceable because the provisions of the Bills of Sale Acts are unlikely to have been followed, and even if they have, the relevant requirements of the Consumer Credit Act 1974 must also be satisfied.
l. The bill of sale and related credit agreement may also be susceptible to action under the Unfair Terms in Consumer Contracts Regulations 1999 or under the extortionate credit bargain provisions of the Consumer Credit Act 1974.
m.Whether title can pass to a third party where there is a valid bill of sale will depend upon whether the bill transfers legal or equitable title to the grantee, and each case would need to be looked at on its facts.
The Bills of Sale Acts are unduly complex and outdated, and should be reviewed – as recommended by the Crowther Committee in 1971. We suspect however that BERR will be unwilling to include this in the current Consumer Credit Act 1974 Review unless there is clear
evidence of consumer detriment. You may wish to bring your concerns to the BERR’s attention by
writing to –
Consumer Affairs Directorate, Department of Business, Enterprise and Regulatory Reform, 1
Victoria Street, London SW1H 0ET
* I have updated this guidance to take account of legal and governmental changes
** The office where the register is kept is not easy to locate, but, if you enter the main Court
building on the Strand, and ask at the enquiry desk immediately beyond the security desks, they
will give you a sheet of directions.

2

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Read more at: is a credit agreement void if bill of sale void - Legal Beagles Consumer Forum

[Guest]

Re: fixed sum loan agreement and bill of sale

It does not matter, as far as the act is concerned that the Bill of sale was not correctly executed in itself, the act has no sanction for that. All that means is that that particular piece of paper is worthless.
There is a sanction within the act (Section 105) for not presenting the security to the lender but they have done that correctly by including it on the agreement.
What they should not have done is enforce the security without as you say first properly terminating the agreement (issuing a default notice)
So as I see it you have several strings to your bow.
You can seek an injunction and file for damages or you can quote the new guidelines or you can threaten them with the unfair trading regs.
If you are thinking of seeking damages I would seriously consider consulting a solicitor. From what you say I think you have a strong case and I am sure that you would be able to get a good deal(NWNF) if you shopped around.
I have had similar experience of a car being repossessed on a HP agreement without a proper termination and all it took was a solicitors letter and the threat of legal action to sort the matter out.
Peter