Repossession – Do You Know Your Rights?
Wednesday, 14. August 2013
Tonight those lovely old ladies that present the BBC 1 programme called Rip Off Britain had a piece about Log Book Loans. In most respects, contrary to my usual complaints about the press and consumer programmes, it was surprisingly accurate but it missed a few very key pieces of information.
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First of all Log Book Loans, as pointed out in the programme, are what are known as Bills of Sale, regulated not by the Consumer Credit Act but The Bill of Sales Act 1878 and the amendment act of 1882. This Victorian act was created in the days when rights were with the lender, not with the borrower, as they are today.
A loan is secured against a car at a high APR, normally around 300% – 400%. In a case highlighted a lady had a recovery company call late at night to recover a car which they said had money owed on it on a Log Book Loan. The collection at a late hour was questionable but in a panic the lady handed over the keys and having already bought the car in good faith was later told that she would have to settle the outstanding finance if she wanted the car back.
The fact is that the finance company was acting within the law. In fact contrary to much of the rubbish written on the Internet, on various consumer sites, by people who have no knowledge of the law, they don’t even need a court order, which is the case once you have paid off a third of the debt on HP.
They can even enter your property, break down the doors of your garage and remove the vehicle. Unless of course, as one very smart chap suggested on a famous consumer blog, you remove the battery and two of the wheels! Nice idea unless you actually bought the car to drive – you dope!
The strange thing is that in 2010 the Government carried out a review of the act and amazingly did nothing to it leaving ‘innocent buyers’ in the cold. If you buy a car on HP or PCP, i.e. a loan secured against the car, and you buy the car not knowing that the car had finance secured against it, having asked the owner, title still passes to you as an ‘innocent buyer’.
So until log book loans raised their ugly head you didn’t need to fork out for an HPI check that tells you if finance is secured upon the car. The HPI guarantee covers you up to £30,000 against losses as a result of the finance not being recorded.
This was in fact a bit of a sleight of hand because as a consumer you were covered up to £30,000 under the Consumer Credit Act anyway so when the debt collector comes calling for the £15,000 worth of finance outstanding on the car you bought and HPI save you this money they simply phone the HP company and explain that you were an innocent buyer and the finance company, in most instances, will simply go walkies. But now that you have log book loans recorded also we are in a different ball game.
It is now worth paying for an HPI check (the full online check) if you are to protect yourself against the fraudulent selling of a car to you that has a log book loan secured upon it. What they didn’t make at all clear in the programme was that you should never simply hand over keys to anyone who turns up at your door with a piece of paper, that could be a forgery, saying they are the owners of the car.
And if the paperwork does not mention ‘bill of sale’ then the chances are that they are trying to recover a car that was on HP or PCP and as long as you don’t hand anything over you will be considered as an innocent buyer of the car and entitled to keep it. Once you forfeit the car you give up your rights.
Remember, if you feel at all intimidated call the police. I award 8 out of 10 to the kindly ladies of Rip Off Britain.
