moneybarn

[solcom]

Hi,
In march 2016 i borrowed £9500 from moneybarn for a 2008 MERCEDES CLS.
I paid £320 a month until december 2016 when i lost my job unexpectadly.
I had paid £2880 in total
I told moneybarn what had happened and that i would hopefully be back working soon as i am a highly skilled engineer.
Moneybarn werent really interested and said they eould start court proceedings anyway.
At the end of february 2017 i set up my own business and told moneybarn payments will resume at the end of march.
Moneybarn said that only way i could keep it is if it went to court for some kind of control order and that this will cost me an additional £1500 plus the 3 months arrears of £960 so this would now put my monthly cost upto £450
I told them no way was i excepting this extortion and wouldnt agree to it.
Eventually i agreed to surrender the car back to them as they told me they wouldnt just sell it for anything and a reserve would be put on vehicle in auction.
After letting the car go back which was still low mileage and in excellant condition with full service history etc i got a letter saying the reserve would be set at £3000 which is half its trade value.
Its eventually been sold at auction for £4100
The trade price is £6200 and retail is £8000
Ive now received a letter from moneybarn telling me i know have to pay the balance of £11000
How can i still owe this amount? Thats still more than the actual cost of car 12 months ago even after £7000 has been paid in last 12 months!
This amount cant be a reasonable figure?

Thanks

Paul

[R0b]

Re: moneybarn

Hi Solcom,

The problem you have s that you agreed to surrender the vehicle, and what that means is that they will sell the car and deduct the proceeds from the sale against the outstanding balance which you must then owe. It is common knowledge that selling a car at auction is unlikely to fetch anything near the real value of the vehicle but as a means to get rid of the car quickly and recover the outstanding balance.

The reserve might be based on what the auctioneers have suggested the car might fetch on auction in its current condition so if your looking at the value of the car as trade in or retail/private then that would not be a suitable benchmark. Plus I don't think you can have any say in how much Moneybarn set the reserve value because you've already surrendered the vehicle and as above, their job is to make a quick sale and offset the debt.

Now there could be some kind of unfair relationship with Moneybarn because if they have suggested that your only option is a control order (whatever that means) or to surrender the car, then legally speaking that is not right as you do have the option to exercise your right under section 99 of the Consumer Credit Act (voluntary termination) which would have been a better option as your liability is limited to 50% of the total price not the remainder of the outstanding balance.

Secondly, Moneybarn can't just simply issue proceedings anyway, they must have sent you a default notice first before they would be allowed to terminate and then issue proceedings for the recovery of the vehicle. All of this could suggest that an unfair relationship and perhaps aggressive commercial practices which is unlawful under the Consumer Protection from Unfair Trading Regulations.

Have you contacted Moneybarn for a breakdown of those charges? If so, what have they said or what have they supplied as the breakdown - have you checked your agreement to see if there are any additional charges which they apply in the event of a voluntary surrender?

You could look to make a formal complaint to Moneybarn and if they don't uphold your complaint then you are entitled to pursue it further to the Financial Ombudsman who might be more sympathetic. You should always seek to get nay response from Moneybarn or other lenders in writing as evidence in the event of a dispute since its harder to prove something said verbally unless the call is recorded.