VT on PCP agreement

[majorclanger100]

Hi there, I'd appreciate some advice about the following please!

 

We have a PCP agreement with Renault Finance Services since September 2004, which has about £11,000 still owing on it. We've paid over half the total amount but are now 4 months in arrears.

 

Does anyone know what the deal is with voluntary termination on PCP agreements? I faxed RFS in December 2006, offering surrender of the vehicle, which was in response to an offer they made during a phone call in November (date of first default). Unfortunately they did not respond, so I've faxed both RFS and their agents three further times to chase.

 

We've now received a form to sign, allowing the agents of RFS to sell the vehicle on our behalf to clear some of the debt (we haven't signed this yet).

 

The value of the car is roughly £9,000 and I have a suspicion that RFS will let it go for well under the actual value and then chase us for the difference and remaining payments owed. Would I be correct in this?!

[rosiecotton]

As far as I am aware (though I haven't dealt with any cases personally), a PCP agreement is a conditional sale agreement, so you have the right to voluntary terminate and equally the creditor can terminate if you have defaulted.

 

Rather than go into lots of detail (since I don't have time!) this link might help:

 

Debt Factsheets - How to deal with Hire Purchase debt

 

or (probably more user-friendly):

 

The Office of Fair Trading: New hire purchase leaflet for consumers published by OFT and the linked leaflet

 

You can terminate the agreement yourself which must be in writing, this is the better course of action to take and there is more information in the above link.

 

Since you have already paid over 50% of the price they can only pursue you for arrears, and any damage to the vehicle (not wear and tear).

[majorclanger100]

Thanks for your advice Rosie. I've had a look at the links and they are very informative - don't think we'll be liable for nearly as much as I feared ( ).

[majorclanger100]

Am I going off my noddle, or is this creditor playing silly b*****s?!

 

I VT'd a vehicle HP agreement last year. There was some confusion at the time about if there were any arrears at time of termination, but it now looks like there was one month owing.

 

Despite numerous (8!) faxed letters to the creditor requesting VT they failed to respond - eventually they sent a letter claiming the full amount under the agreement (four months after my original VT request)

 

The creditor is now pursuing legal action, claiming that our request to VT was invalid as there were arrears and we had breached the agreement. There was no default notice in force (this was issued four months later, followed by a termination notice).

 

Am I right in thinking this is total b******s? I've read and re-read the CCA 1974 and as far as I am aware there is provision for the debtor to be liable for arrears up to the date of voluntary termination under 99 and 100 of the CCA 1974, but this does preclude VT? I've already offered in writing to pay arrears due to the date of VT.

 

Am I also right in thinking that the debtor cannot be regarded as in breach of the agreement until a default notice has been issued (Section 87d of CCA)?

 

Thanks guys

[majorclanger100]

Sorry, just bumping

[Edz11]

When you have terminated S100 (1) kicks in. You owe any arrears at date of termination and termination is possible when you have paid half of the total sum due. So if you gave notice of termination the agreement ended but your liability continued to the extent of the arrears +50%.

[majorclanger100]

Hi Edz

 

Thanks for the post. I have no problem paying the arrears - the problem is that the creditor is claiming I couldn't VT because there were arrears owing (one month anyway). Their legal action is based on this!

 

I believe this is wrong. There was no default notice until 4 months later and I understand that I could have VT'd right up to the expiry date on the default notice (legally speaking ). I had already paid over 50% of the agreement.

 

Many thanks,

 

MC

[sequenci]

Do Personal Contract Plans count as HP agreements? Are they subject to The CCA, especially section 99?

 

I really don't know.

[majorclanger100]

Hi Sequenci,

 

That's a good point - I've always assumed that PCP agreements were conditional sale agreements. Ours is definitely described as PCP but the agreement is a bog standard HP agreement, regulated by the CCA 1974 and with the usual voluntary termination clause at 50%.

 

It's with Capital Bank - we all know that this is a company which seems to be extremely confused about what type of contract is what....

 

As far as I'm concerned I've complied with the terms of the agreement and the CCA 99 & 100 to the letter. However they think otherwise .

 

Cheers MC

[sequenci]

As far as I'm concerned I've complied with the terms of the agreement and the CCA 99 & 100 to the letter. However they think otherwise .

 

They always do (Sweeping generalisation there!). Time for Trading Standards perhaps?

[Edz11]

Both 99 and 100 apply contractually or by default to HP or CS, BUT ONLY by contract to PCP. This is from the OFT's site;

 

Why voluntary termination provisions are important in the context of the contractual provisions of HP and CS

 

To understand how the CCA protections provided by s.99 and 100 work it is necessary

to understand the structure of the agreement and the interaction and impact of the

contractual terms. The right to VT can be granted by a contract term, but when it's

not, ss. 99 and 100 fill the gap. Essentially, there are two types of HP contract: one

offered to consumers in a position to make a bargain and one offered to those who

cannot.

 

Modern consumers who are able to use their knowledge and economic influence to

properly bargain a contract demand something very similar to the statutory provisions:

Personal Contract Plans (PCPs) are a market driven phenomenon where the contract

terms expressly allow the consumer to hand back or purchase a car at roughly the

halfway point. Conversely, for those consumers who have little bargaining power (this

includes, but is not limited to, vulnerable consumers) the contract terms impose

maximum financial liability and minimum freedom of action, which is only mitigated by

the statutory right to VT.

 

So your rights are in your contract as far as PCP's are concerned. What does is say exactly about termination?

[sequenci]

It says there are NO termination rights.

[Edz11]

posts 1 & 4 read like there are two different vehicles involved. Post 1 is a "real" HP agreement and s99 and s100 apply. Post 4 is different in that it is a PCP. In which case it's down to contract...

[majorclanger100]

Hi guys,

 

Sorry for the confusion. Post 1 was when I was in some doubt about PCP and VT, Post 4 was when I was in no doubt (i.e. I had dug out a copy of the original agreement - which is the same as an ordinary HP agreement governed by the CCA 1974 and been through the mill arguing with the creditor). It is the same vehicle and the same company (RFS were a subsidiary of Capital Bank).

 

The contract has a standard 50% TAP voluntary termination provision and the creditor has argued that s99 and s100 are not applicable in this case. What they are arguing is that I could not VT as I was a month in arrears - which I think is b******t under both the CCA 1974 and contractual provisions. This has already reached PHR stage at Court and allocated to the fast track.

 

Good fun, eh?!

 

MC

[sequenci]

Have they ever served you with a default notice?

[majorclanger100]

Hi Sequenci,

 

Default notice was served at the end of March 2007 - four months after I VT'd in writing! It was swiftly followed by a termination notice.

 

MC

[sequenci]

If you have proof that you VT'd prior to receiveing the default and termination notices they should adhere to your request. I would seriously consider taking a complaint further to Trading Standards and possibly the FOS also.

[majorclanger100]

Thanks Sequenci,

 

Yes I've kept the proof - I'll probably have to wait until the resolution of the legal action (going to full hearing) before complaints to TS and FOS, but as Capital Bank seem to make a habit of such behaviour there will be complaints!

 

Many thanks,

 

MC

[garygumps]

Hi Majorclanger,

 

How is your case proceeding? I am having problems with these clowns (RCI, formally RFS) at the moment regarging amount due because of "damage" not deemed wear & tear.

 

See my threadhttp://www.consumeractiongroup.co.uk/forum/vehicle-retailers-manufacturers/130470-vt-problem-rci-finance.html

[majorclanger100]

Hi garygrumps,

 

Thanks for the post. Case not going well as it looks like although we've complied contractually and legally with the VT request (without a doubt), and RFS/RCI haven't and have acted unlawfully, we'll end up with being stung with costs by the Court. I love this country - such protection for the consumer!

 

I've read your thread and my advice would be to get Trading Standards and/or the FOS involved asap. RCI will continue to ignore your letters and may very well take further action. I was stupid not to get TS involved early on in my case, as it probably wouldn't have got so far.

 

Good luck!

 

MC

[garygumps]

thanks Major. What court is it being held in? Is is small claims or a full "proper" court? What sort of costs are you being stung for if you dont mind me asking?

 

Surely you are not expected to stump up for what no doubt is a big legal operation that RCI/RFS/Capital Bank have put into operation?

 

Thanks for the heads up, will be contacting FOS. Don't really think Trading Standards would be interested, as we are disagreeing on interpretation.

 

Gary

[majorclanger100]

Hi Gary,

 

It's a full court, as on fast track. Can't say too much about it at the moment because it's an ongoing case but let's just say we've had to appoint a solicitor not only to fight off RFS/RCI but to deal with the judge. Litigants in person certainly are at a disadvantage in some courts....

 

Good luck with the FOS - hopefully RCI might actually listen!

 

MC

[garygumps]

That sucks Major:(

 

My dispute is over "only" £99, but its the principle I am mostly fighting over. The thought of this going to a full court hearing and all the associated costs and such is scary TBH:o .

 

I am more than happy to be in a small claims court situation as I am familiar with that and it is "Joe Public/small man" friendly. i would happily argue my case in person in front of a judge on this matter, but as you say you are forced to employ professional lawyers.

 

FOS should be in receipt of my papers by now, so should hear something soon. No word of course from RCI:rolleyes: