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This is an interesting case forwarded by a lawyer friend of mine. Buy a faulty car and the law is on your side. Your rights were strengthened by the Consumer Rights Act 2015. Within the first 30 days you can return a faulty car and demand your money back but we all know that life isn’t that simple with dealers pretty much refusing point-blank to take back the car.

This can lead to a lot of distress which isn’t covered by the act but is the point of this case. Here is what was said by the defending lawyer, defending the car dealer:

The driver took the dealer to court claiming that the car he bought was faulty. An element of the claim contained words to the effect that they demanded in the region of £2,000 in compensation for the distress caused – resulting in a deterioration in the buyer’s mental health.

Part of the defence was that if any part of a claim was for damages (compensation) for personal injury (physical, mental or psychological) then the whole claim was subject to compliance with the Pre-Action Protocol on Personal Injury.

And that as the amount sought was over £1,000 the case had to be allocated to fast track not to small claims. £1.000 is the threshold for personal injury claims to be held in the “small claims” track of the county court.  The lawyers invited the court to dismiss the whole of the claim because none of the claimant’s actions prior to issuing the claim had followed the mandatory Pre-Action protocol.

The court held a preliminary hearing and convinced the claimant not to pursue the mental health aspect of the claim.  According to the lawyers, they suspected that the Judge was generally unimpressed by the claimant and encouraged the parties to come to a settlement out of court purely on the issue of the value of the car alone – and nothing else.

The parties agreed to such a settlement there and then, which was endorsed by the court – but not giving the claimant anything towards the substantial issue fee that the claimant had paid to issue the claim in the first place.

Whilst the lawyers were obviously pleased with the outcome this is a real problem. I hear all the time about problems faced by drivers with dealers, both new car and used car dealers, who provide a dreadful service and cause a great deal of unnecessary grief which is never compensated for. Something needs to be done to stop disputes getting to these ridiculous level where consumers are affected mentally. By Graham Hill

A Dealer Scam Costing Them A Fortune

I don’t usually have a lot of sympathy for dealers but when I read about this scam going round catching dealers out I had to feel sorry as they’ve done nothing wrong. It involves taking payment for cars by Debit Card. Here’s the scam as revealed by a lawyer with a warning to car dealers:

The scenario is this. Customer purchases a vehicle. They pay with one, maybe two debit cards. They collect the car (but more usually ask to have it delivered) and are very happy. They are so happy in fact that they later look to purchase a second car.

The previous sale went without issues, there have been no complaints and so you sell the second car. They may come back for a third or more. All is well. Then, out of the blue 3 months later, your bank take all the money for those cars out of your account and so you have no cars, no cash.

The buyer has done a bunk and you are left with a fight on your hands to a) track down the vehicle and b) try and make a civil case that title never passed to your original buyer (the fraudster) and so you can have the car back.

These cases are never straightforward as you, as a car dealer, can imagine as you could find yourself in the position of the dealer who has been the victim of the chargeback or you might be the dealer who purchased the car further down the line in good faith. Who wins? Well, that is for the court to decide as the police will generally consider it a civil matter and each case can be determined on its merits as all these cases will have different facts despite being the similar bigger picture.

Going forward, be aware that chargebacks can typically be made by a cardholder up to 4 months after a sale. Bank transfer is a much better option. If someone is buying multiple cars with debit cards, then ensure it raises a red flag, even when you have all the information needed for the bank to process the transaction and especially, if they ask to have the car delivered.

So it’s not all one-sided with dealers always coming out on top. This scam is costing dealers a great deal of money. OK, sympathy for dealers over! By Graham Hill