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My previous blog was entitled Is The Consumer Rights Act Fit For Purpose? I give a typical example of how consumers are being ripped off by dealers not willing to honour their legal obligations. I also give a number of actions that customers can take that will help them to get a result.

After a lot of research, I have come across what I believe is a better solution. The RAC has a legal insurance policy called Legal Care Plus. It covers much more than a normal legal cover extension on the average car insurance policy.

The important cover is:

Motor Vehicle Consumer Disputes

RAC will cover up to £5,000 in legal costs following a breach of an agreement relating to the sale, purchase, hire or servicing of a motor vehicle.

I spoke to a representative who confirmed that this would cover warranty disputes as a result of the vehicle being faulty. In addition, it covers legal costs and expenses for uninsured loss recovery, for example, loss of earnings to the tune of £100,000. Where you have an accident that was not your fault you can also recover your excess.

Along with other cover, the policy looks really good to me. And the cost? Just £15 per annum. Always take professional advice before taking out an insurance product. By Graham Hill

I’ve just been reading yet another story about someone trying to reject a faulty car and not being allowed to by the dealership. What the hell is the point of an act of Parliament to protect consumers if it is totally toothless when you try to apply it?

What Car reported an incident that involved a lady who was driving a nearly new BMW 1 Series, bought with 2,200 miles on the clock for £22,000. After 5 days and 93 miles the car broke down, it shuddered, misfired and lost all power. The oil warning light came on and the onboard computer stated there was a problem with the drivetrain.

The lady driver stated that the car broke down in a dangerous position but she managed to get it to limp to a safe place then made a long walk to a friend’s house. After advising the supplying dealer it was a week before the car was collected. They then called a day later saying that they had driven the car for 60 miles and couldn’t find a fault so suggested that she could collect the car.

Following the non-repair the car has suffered sporadic electrical problems leaving the lady with no confidence that it might break down again leaving her stranded. As a result the lady wrote to the supplying dealer telling them that she wanted to reject the car under the 30-day rejection rule as part of the Consumer Rights Act. She was told by the dealer that she couldn’t reject the car as there was nothing wrong with it.

As reliability and safety were all important to her, especially as she is normally in the car alone, she still wasn’t happy. She wrote to the dealer advising them as such and informing them that she wanted to return the car for a full refund.

They replied by explaining that as there was nothing wrong with the car she couldn’t return it for a refund. But they offered another 1 series that they had in stock as a replacement. The car was cheaper than her original car so she would be financially out of pocket as they refused to refund the difference. The lady felt that she had been treated appallingly – sadly she isn’t alone.

So what was the outcome when she wrote to What Car?

They, first of all, confirmed that she was within her rights to return the faulty car for a full refund. The car was considered to be of unsatisfactory quality as the car was, and continued to be, faulty. And as it was likely to break down again leaving the lady stranded it was also considered to be unfit for purpose. All of which I totally agreed with.

What Car suggested that the lady go back to the dealership and reiterate what they had said to her. She did that and on the same day the dealer got straight back to her and said she was wrong about her consumer rights and she could not reject the car. As a result What Car contacted BMW’s UK head office to ask for their intervention – which they duly did. The following day the dealer called her and agreed to a full refund.

Now whilst this may look like a great outcome and in the case of the lady concerned – and it was but in my opinion, it is wrong on so many levels. Not least of which the dealer will receive the car back with a fault – so given their attitude will they fix it? No, they won’t because they don’t believe the car is faulty. So will they continue to sell the car until someone accepts their argument and accepts the faults or pays for the fix themselves – if it can be fixed? I suspect that this is the route they will take.

Solution 1: Record on HPI and Experian that the car had been rejected and list the reasons. The dealer wouldn’t do this automatically because it alerts the new owner so they would need to be obligated to by law. But if we do that we will need to make it compulsory for lenders and insurers to record finance links and insurance damage – something that isn’t compulsory at the moment. Ridiculous. We need changes.

If you experience a fault immediately after taking delivery of your car (within 30 days), either new or used, from a dealer or trader (not private) you should reject it immediately by putting it in writing. An email or a letter should do (I suggest a letter that is signed for). If the issue is minor such as say a loose piece of trim that can be easily fixed you can give the dealer an opportunity to fix.

Remember you don’t have to give the dealer an opportunity to fix within the first 30 days but the fault does have to be genuine, you can’t just change your mind about the car. I’ve heard of situations whereby the customer has a fault and insists that the dealer refund the cost. The dealer (as in the case above) takes the car back, repairs the fault then says that a fault didn’t exist. So this is where my next piece of advice is all important.

If your car suffers a fault take as many photos and/or videos that you can with your phone showing the car running badly, an item not working and certainly warnings that appear on the dashboard. Don’t put yourself at risk so get the help of a friend or relation to take photos if the fault occurs and you can get someone else to video it whilst you’re driving.

The next thing is to register your complaint with Trading Standards. The more people that complain the better the picture that Trading Standards will have of the dealer. If the dealer has a bad record of not treating customers fairly and meeting their legal obligations you may find that they come to a quick solution. And Trading Standards have legal clout.

The problem is that you can no longer contact Trading Standards direct. You have to go through the Citizens Advice Consumer Helpline and they decide whether to refer to Trading Standards. In most instances that won’t be a problem – just a minor delay.

Make sure that you don’t sign any forms, simply write to the dealer advising that you want to exercise your rights under the Consumer Rights Act 2015 to hand the car back for a full refund and explain why. Some dealers will hand you a form to sign which may have a string of conditions included – they are not legally enforceable but they’ll try it on. Don’t sign it.

You can write to the manufacturer as well, as happened with What Car and also to any trade association of which the dealer is a member. Most are members of the Society of Motor Manufacturers and Traders. They should be able to refer you to an independent dispute resolution body but make sure that it isn’t the Motor Ombudsman as I don’t believe they are totally independent. You can only use them if the dealer is a member which costs them money so I believe their advice cannot possibly be totally independent.

It should also be born in mind that if you buy goods from a shop, say a kettle from Argos, it is the responsibility of the shop if the goods are faulty, not the manufacturer. Once the shop has resolved your complaint it is then up to the retailer to take up the issue with the manufacturer – nothing to do with you. A manufacturer’s warranty is in addition to your legal rights – not a replacement. However, this isn’t the case with a Franchised dealer. He trades as an extension of the car manufacturer as a ‘franchisee’ so when you deal with the dealer you also deal with the manufacturer.

The manufacturer has a reputation to maintain so it isn’t unusual for them to overturn a local decision made by their franchisee. So if you don’t get satisfaction from the dealer certainly go for the manufacturer.

Finally, check your home and car insurance policy if you have legal cover. At worst they will give you legal advice at best their lawyers will write to the dealer. By Graham Hill

Following the warnings from the BVRLA and myself, it is important to carry out a check to see if the company you are dealing with is properly authorised. If the company isn’t authorised the onus falls on your shoulders should fraud have been committed.

You cannot make a complaint to the Financial Ombudsman Service (FOS) against a company that isn’t on the FCA register as authorised.

That is scary because it means if you’ve been scammed by an unauthorised firm – you’re stuffed!

You can check the FCA Register by clicking on the following link and inserting the company name. Try using ‘GHA Finance’ as an example.

https://register.fca.org.uk/

Here is an extract from the FCA website:

If you deal with an unauthorised firm you will not be covered by the Financial Ombudsman Service(link is external) or Financial Services Compensation Scheme(link is external) (FSCS) if things go wrong.

Unfortunately there are firms that operate without our authorisation and some knowingly run scams like share fraud and other investment scams.

If a firm does not appear on the Register but claims it does, search for it in the list below and contact our Consumer Helpline on 0800 111 6768.

Beware of fraudsters pretending to be from a firm authorised by us, as it could be what we call a ‘clone firm‘. If you are cold-called by a financial services firm always ring them back on the switchboard number given on the Register.

We add firms to this list as soon as possible but it is not exhaustive. Do not assume a firm is legitimate just because it does not appear in this list – these firms frequently change their name and it may not have been reported to us yet.

You should take further steps to protect yourself from unauthorised firms and check our list of warnings from foreign regulators(link is external). You can also find out about share fraud and other investment scams.

Search for an unauthorised firm below or see the most recently added firms.

As you can see, not carrying out a quick check could leave you seriously out of pocket with no-one to turn to for help.

Warnings have been issued by the British Vehicle Rental & Leasing Association (BVRLA) regarding the increase in contract hire scams. Knowing who you are dealing with is much more important than simply searching for the cheapest deals.

The BVRLA has warned about scammers preying on those looking for the cheapest deal. In its simplest form, the ‘brokers’ advertise cheap deals that don’t exist and ask for a holding payment to secure the rates or a car. Or they wait till closer to the time they say they can deliver and ask for the 6 or 9 months advance rental, often thousands of pounds. Then disappear.

One of the very few benefits to taking out a PCP through a dealer is that you know where they are and who they are. They have a physical showroom and you can see the person you are dealing with. In the case of contract hire most contracts are agreed online with someone you will never meet so you really need to know who you are dealing with. Creating or cloning a very professional looking website is easy so you need to know that the people you are dealing with are as professional as the website looks.

And as warned by the BVRLA and I it is very easy to scam and it’s becoming more widespread than you think.

Following on from the warnings issued by the BVRLA I have another of my own. I’ve seen websites that have been cloned from an original legitimate site but changed all the contact details. Customers who check out the company that they think they are doing business with, find them to be legitimate – but they’re not.

The FCA suggest that whilst you are checking that the company is on their register you can also check the website contact details to ensure that the email address and telephone numbers agree. Even then it isn’t 100% as a legitimate company could have an 0800 number on the website but a landline number stored on the FCA register.

Also watch out for ‘cloaked’ email addresses. You may see something like graham@ghafinance.co.uk on the website but when you click on the link it takes you to something like graham@ghafinances.co.uk They will have an email account set up with the slightest of modifications like adding an ‘s’ at the end of ghafinance. By Graham Hill

One very important thing to remember is that a contract hire agreement:

IS NOT A LOAN AGREEMENT!

I have run training courses and seminars for leasing company employees and executives, dealership staff and consumer groups. In each, when I talk about contract hire agreements I tend to describe them as more like an insurance policy. The problem is that many consumers don’t bother reading the terms and conditions because they believe them to be similar to a loan agreement.

A loan agreement provides you with some key information regarding the finance, amount borrowed, loan term, interest rate, APR, monthly payments etc. This summary is followed by a dozen or so terms and conditions, pretty much falling in line with the Consumer Credit Act  1974, with most of the terms and conditions much the same between each lender, whether it is a bank or a supermarket.

The fact is that once you have the money you can buy a car following which everything is down to you, when, where and how you have the car serviced, the type of insurance you take out, the tyres you fit, when, where and for how long you take your car abroad and how you deal with warranty claims. It’s all under your control.

However, take a car on contract hire and you don’t own it. The leasing company owns it and wants you to take care of it whilst you have the use of it. Because they end up having to sell the car at the end of the agreement and want it to fetch as much as possible at auction. They also want to maximise their profit out of the deal and the profit comes from many places. However, in extreme ignorance, consumers and SME’s with decide upon a car based purely on the rate and totally ignore the contract they are about to sign.

I have pulled out of my files 7 recent contract hire agreements and each one is substantially different from the others and each contains terms that are incredibly vague and confusing. It’s frightening for someone with the knowledge and experience that I have let alone those who are not financially astute.

Here is an example from one of the contracts:

Except where the Customer deals as a Consumer (as such term is defined in the Unfair Terms in Consumer Contracts Regulations 1994) or if in Scotland this Agreement is a Consumer Contract (within the meaning of Sections 12 and 25 of the Unfair Contract Terms Act 1977) the Vehicles hired under this Agreement are hired without the benefit of those terms implied by Sections 8. 9 and 10 of the Supply of Goods and Services Act 1982 which terms are (except where the Customer deals as Consumer defined as before) expressly excluded.

Got it? I know what it means but most people would find that incredibly confusing and could leave a customer seriously out of pocket and without a car following a warranty claim. And that’s just one of a hundred terms. So even if you take time to read through the terms and conditions you may still be as knowledgeable as if you hadn’t read them in the first place. It’s a scam.

The fact is that none of the contract hire companies are registered charities and they all need to return profits so think of the monthly rate as just one part of an equation aimed at relieving you of money. Oh, and part of their equation is cost so some employ school leavers on minimum wage to take calls from customers with little training so you can’t expect a high level of customer support if any at all. And raise a problem with a bucket shop broker and you’ll be given short shrift with the response – sort it out with the leasing company! By Graham Hill

The EU’s Intellectual Property Office (IPO) says the number of fake parts fitted to cars on British roads is on the increase. They have estimated that over £2 billion of fake tyres and batteries alone are fitted to cars across Europe. In the UK investigations have revealed that the most common fakes fitted to cars are filters and lights but the fakes that can put lives in jeopardy are brake pads and airbags.

The IPO has explained the huge increase in fakes is mainly due to problems identifying the fakes from the originals. In order to sort the problem out the IPO has joined forces with manufacturers BMW and Audi, selling platforms Amazon and eBay as well as numerous part suppliers. They have come together to issue guidance on how to spot fake car parts.

One of the recommendations was to have dealers or garages source parts for you and fit them rather than source parts yourself and then ask a dealer to fit them. You might save money by sourcing parts yourself but if the dealer sources the parts then he is responsible for the job from start to finish including the parts he provides. They can’t guarantee a part that you provided yourself.

Audi pointed out how difficult it was to identify the fakers from their websites that are looking more and more professional and as genuine as the websites of genuine providers. Their ‘Brand Protection Team’ finds it more and more difficult identifying the crooks from their website. The first indicator is the price that is ‘too good to be true’. The next is spelling. Often there is the slightest of spelling mistakes that alert them and should alert you. That applies not only to the website but also the packaging.

I remember years ago a friend that owned an electrical shop ordered in some Sharp calculators that were at giveaway prices. They looked exactly the same as the original, the logo looked exactly the same but when you looked closely Sharp was spelt Shrap. He asked everyone who came into the shop to tell him what was wrong with the calculator. Hardly anyone saw it as the logo looked so genuine.

The quality of the packaging can also be a giveaway. Some manufacturers also put small marks on the packaging to make it easier to detect fakes. What Car suggests that you take your car to a recognised garage, one that is signed up to the Motor Industry Code Of Practice for Service and Repair.

I feel that a central database of all fakes found by Trading Standards, Customs and Excise and other regulatory bodies be posted on a ‘Fakes’ website to alert consumers about the fakes and how to identify them. By Graham Hill

As an avid reader of my regular newsletters and blogs, you will know that you need to run your diesel engine at over 50mph for a minimum of 20 minutes at least once a month in order to clear out the catalytic converter (the same applies to some petrol engine cars).

This exercise doesn’t spew the particulates (soot) out of the exhaust, it creates a chemical reaction that destroys the particulates without destroying the environment. However, for some drivers, it isn’t possible to do this on a regular monthly basis so a company called Cataclean has come up with a solution – literally, that you add to your fuel.

They claim that by adding it to the fuel it will react within the catalytic converter to not only clean the filters but also all the surfaces within the converter making it not only more fuel efficient but also more efficient at removing NOx and Carbon Monoxide from the exhaust gasses.

In fact, Halfords ran a recent promotion saying that if your car failed its MOT test on emissions after using Cataclean they would refund your money (for the Cataclean that is). They claim that the additive causes the fuel to combust more evenly and efficiently whilst not affecting the fuel in any way.

You can buy it currently in Halfords for both petrol and diesel engines for £15.99 for 450ml. Users have given it a 5 star rating. If you want to know more about the product and how it works go to  https://www.cataclean.com/products.htm

By Graham Hill

Disturbing news has been issued by Matthew Avery, head of research for UK safety company Thatcham Research. Suspicions were raised when they found components fitted to cars, sent for crash test assessment, marked, ‘For Crash Test Only’. The items marked included airbag modules and ISOFIX child seat mounts.

Matthew revealed that they had found previous instances of components being marked ‘Euro NCAP only, for crash test only’. With these and similar markings appearing in cars from various makers. The findings by Thatcham were confirmed to Auto Express by Euro NCAP, the body responsible for setting the test criteria. They said it had ‘Come across parts …. Airbags, seat foams etc. which have unusual or suspicious labelling’.

Whilst Euro NCAP set the safety standards and carry out the testing, conforming to very tight test procedures, in order to issue an NCAP Safety rating, after these tests researchers from organisations such as Thatcham, which test cars in conjunction with NCAP, periodically carry out a strip down audit, inspecting individual components. It’s during these audits that Thatcham and NCAP have found suspiciously marked parts.

Avery said, “Sometimes we’ve tested a vehicle and on the back of a module it says ‘Euro NCAP test’, that seems very suspicious to us.” Whilst some of the components come from 3^rd part suppliers, Thatcham and NCAP ask the manufacturers for explanations after such markings are found. In response, they have received a variety of explanations such as ‘Well no that’s a genuine component, that’s an early version’. But as Avery pointed out these are not stamped they have the notes crudely written on the components using marker pens. When they see that alarm bells ring.

NCAP went to lengths to explain that they follow up every suspicious incident asking the manufacturer to explain what is going on. They visit factories and component suppliers in order to interrogate all involved. A common thread is for manufacturers to explain that a batch of cars may be ordered internally by the safety department and that they may use Euro NCAP as special marking to identify the cars as they pass through production. ‘In some cases, this reference is written onto parts, in order to ensure that production isn’t delayed’.

The Society of Motor Manufacturers and Traders (SMMT) came out strongly on the side of manufacturers and disputed any possible wrongdoing and NCAP also said that they had no proof of any suspicious ‘fiddling’ of the tests by manufacturers but Avery is not convinced. Whilst marked components over the last year have become rare, according to his report to Auto Express, it could be that manufacturers are more careful as a result of ‘dieselgate’.

Personally, I find it very strange when you see very few people on the production line of a car manufacturer, because of the incredibly high level of automation, that they would then put cars together using parts marked with a marker pen. It somehow doesn’t make sense. I also found a comment made by the SMMT to be a little strange. They said, ‘It can be necessary to identify certain safety-critical components in order to confirm they are the latest, approved specification parts’. So would one assume from that statement that there are cars fitted with earlier, non-approved ‘safety critical’ parts being fitted at the same time on the production line?

All very suspicious and after the diesel scandal and the latest scandal relating to the rollout of new technology by German manufacturers how much can we trust the manufacturers? By Graham Hill

I won’t go into the fine detail but the driver of an F-Type had the under bonnet pedestrian airbag deploy twice without the need to, costing him £4,000 as the dealer and the manufacturer refused to accept that there was a manufacturing or design fault and therefore refused a warranty claim.

What Car got involved but still no joy. In the meantime, fearing that the airbag would deploy again the driver, Aiden Magee, stopped using the car. What Car then recommended that he lodge a complaint with the Motor Ombudsman. After investigating, their adjudicator stated he didn’t think that it was a manufacturing defect as it only affected around 2% of F-Types. WHAT THE F!!!! Are they serious?

OK, so it isn’t a manufacturing defect if only 2% of electric kettles blow up! Or if the brakes only fail on 2% of a particular model of car. What a disgraceful argument. But it gets worse. But before I get to that I should point out that the Motor Ombudsman isn’t like the Financial Ombudsman, financed by the Government they are an independent profit-making body set up to confuse customers.

They are paid for by their member dealers so they can hardly be considered as independent. In fact in some promotional text I managed to see, they explain that being a member of the group and paying fees gives all members great publicity giving the public confidence in using those signed up to the ‘code’. So it’s a marketing con. Here are the reviews on Trustpilot:

https://uk.trustpilot.com/review/www.themotorombudsman.org

As the car was pre-2016 when Jaguar changed its handbook to say that the pedestrian protection system was active between 12mph and 31mph they felt that as he didn’t know that he had to drive the car at speeds of lower than 12mph when approaching obstacles that Jaguar should pay for the first repair. However, as he had been made aware of the constraints when the first airbag was replaced he was responsible for the second deployment.

None of the above made any sense to me. The ‘Ombudsman’ said that the ‘fault’ only affected 2% of all F-Types so not a manufacturing fault but then referred to the fact that there was no note of the way the pedestrian airbag deployed in the handbook, being the reason why the first replacement should have been made under the warranty but even though no pedestrian was involved in the second deployment the car owner should be responsible.

Not surprising I don’t recommend that you ever use the Motor Ombudsman – what a waste of space. I’m currently attempting to find out if legal expense insurance will cover you for warranty claims. By Graham Hill

I recently announced in my newsletter that the Government was going to pull the plug (get it) on electric vehicle and hybrid grants in November. Hybrid cars that have an electric, zero-emission, range of less than 70 miles were to have their grants reduced to zero and the grants for full electric vehicles were to drop from £4,500 to £3,500.

Whilst drivers brought forward their purchases to benefit from the last of the grants the Government forgot to mention that there was a pot of grant available and when that pot went so did the old grants and the new grants were to kick in.

So imagine the shock when car dealers and leasing company staff rocked up for work on Monday to find that the new grant structure was effective from Monday morning. Presumably, because the old pot of grant money had gone by Sunday night. The Government revealed that qualifying car sales increased by 6 fold following the Government’s announcement.

I covered the announcement in a previous blog/post so I won’t repeat but we are already behind most of Europe when it comes to charger infrastructure and the take-up of hybrids and EV’s is still low even though the higher uptake of the two is the reason given by the Government for people buying hybrids and EV’s. More would take electric vehicles if there was less anxiety over the range, hence the popularity of hybrids.

Personally, I think that removing the grants on hybrids is a bad move. Many used it as a stepping stone towards a full electric but they are now being pushed out of the market and back into petrol and diesel cars purely because of cost – retro-move! By Graham Hill