At what point can a finance company pass VT excess mileage on to a debt collector

[Deakus]

Firstly. Thank you for the this site and its resources. It is proving very helpful in my battles with Ford Credit. My question is, at what point can Ford Credit pass a "perceived" debt on their part to a debt collection agency and is their any legislation or regulation that they must adhere to?

My situation is as follows:

Voluntary Terminated a Ford Focus with Ford Credit in June 2016.
Ford accepted I had paid 53% of the outstanding amount (over the phone) when I called pre sending the termination notice (I used the template from this site).
Vehicle was collected and assessed at handover as in GOOD condition on the paperwork. I also photographed it in detail.

Ford Credit wrote to me requiring me to pay excess mileage @6p/mile (car went back with 45000 miles on it after 24 months, the contract was priced at 15000 miles per year).

I refuted this in writing pointing to their contract. On the front page of their contract there are two paragraphs:

Termination Your Rights
You have the right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods and to half the amount payable under this agreement, that is £9891.58 If you have already paid at least this amount plus any overdue instalments, and have taken reasonable care of the goods, you will not have to pay any more.

Directly below this paragraph is a further paragraph.

Excess Mileage:
You must not exceed the Approved Annual Mileage of 15000 miles. If you do exceed the Approved Annual Mileage, Excess Mileage Charges are payable at a rate of 6.0p per mile plus VAT where this agreement ends for any reason under paragraph 8(a), 8(b), 8(c) or 8(d) of the Terms and Conditions. Note if this agreement ends early for any reason, we will proportionally reduce the Approved Annual Mileage for the purpose of the calculation of Excess Mileage Charges.

8(a) Talks refers to my right to terminate as quoted above.
8(b) - (c) talk about possession of the car and them ending the agreement (not relevant here)

8(d) - This may be relevant so I will type it in full

Where we have taken back the vehicle
(d) If we end this agreement where we have taken back the vehicle you must pay us on demand: This is specific to if THEY end the agreement. In this case have I not terminated the agreement?
(i) any arrears of monthly payments and other sums due but unpaid at the date when the agreement ended.
(ii) our reasonable costs of repairing the vehicle and restoring it to goo condition (commensurate with its age and mileage). The vehicle was already graded as good on handove
(iii) the outstanding balance under this agreement (which is all amounts payable under this agreement less the total amount you have paid) less:
(A) any arrears; and
(B) the Purchase Fee shown on page 1 under "Payment Details" and
(C) the net proceeds of the sale of the Vehicle (failure to return the vehicle with the accessories and documentation cited below may lead to a lower price on resale); and
(D) any rebate of the charges for credit to which you may be entitled by law

there are then some other irrelevant paragraphs until
(h) If the mileage travelled by the vehicle has exceeded the Approved Annual Mileage you must pay the excess mileage charges (shown under the heading excess mileage on page 1)

I claimed that they could not claim excess mileage because, and I quote (ignore the rebate for payments in advance, it turns out that it was payment in arrears, I have also settled a final amount for the number of days I had the vehicle up to the day of collection)

I dispute your calculations of liabilities on termination.

I believe that my credit agreement is paid monthly in advance. I have therefore paid for a whole month prior to my notice of termination which you have confirmed as being received on 30^th June 2016. A full payment was taken on the 26^th June 2016 and as such I request that you repay to me, by reason of your own calculations of £8.68/day an amount totaling the number of days since your receipt of my notification and the next due payment date. I calculate this to be 25 days which totals £217.00. Please pay this amount within 28 days of the collections of the vehicle, either by BACS payment or cheque made payable to Marc Mears at the address listed above.

Furthermore, Voluntary Termination as laid down in statute makes no provision for you to recover excess mileage. The mileage on the vehicle as of today is 45340 miles. I refute any liability for excess mileage and under the Terms and Conditions on Page 1 of the FORD CREDIT Hire Purchase Agreement regulated by the Consumer Credit Act 1974 which I was provided with when I signed the agreement it states clearly that on payment of half the total amount payable (According to your representative I have paid 53% of the total amount payable) and providing I have taken reasonable care of the vehicle, I will not have to pay any more.

I believe I have therefore satisfied all requirements laid down under the Consumer Credit Act for Voluntary Termination and ask that you proceed with collection of the vehicle without delay and arrange for the refund requested above. I see no reason why this matter should be passed to Link Financial Outsourcing Ltd or any other representative for the collection of liabilities that you incorrectly lay out and you should note that any action of this type could render Ford Credit in breach of its obligations to keep clear and accurate records under the Data Protection Act.
Ford have come back to me having registered this as a FCA complaint and refused to uphold my complained (I never actually complained I simply stated that I did not agree with their calculations based upon the fact that I did not believe I was liable for excess mileage) they have said

The Consumer Credit Act 1974 stipulates although the hirer has the right to voluntary terminate a hire purchase agreement they will remain liable for any liability which has accrued before the termination.

They then go back to pointing to the page one paragraph about excess mileage.

In summary I can now go to the Ombudsman - This is not a mis sale claim, it is a contract dispute, or I can pay or go to court. I am quite happy to go to court and test this, I have yet seen anyone who has tested it, however my I would just like to know if I am on the right track. My feeling is that I should write back with a statement to the effect that the excess mileage was not liable at the time when I terminated and my account was up do date and all instalments paid. In addition does the work Installment have a specific legal meaning and if so can excess mileage be classed as an instalment. If so it looks like their contract contradicts itself or is at odds with the Right to Terminate Clause. Bearing in mind this clause is based on statute the law would presumably override any other Terms and Conditions?

Some clarity or help would be much appreciated. If I am on shaky ground I would rather know now.

Many thank in advance.

[nemesis45]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

Firstly. Thank you for the this site and its resources. It is proving very helpful in my battles with Ford Credit. My question is, at what point can Ford Credit pass a "perceived" debt on their part to a debt collection agency and is their any legislation or regulation that they must adhere to?

My situation is as follows:

Voluntary Terminated a Ford Focus with Ford Credit in June 2016.
Ford accepted I had paid 53% of the outstanding amount (over the phone) when I called pre sending the termination notice (I used the template from this site).
Vehicle was collected and assessed at handover as in GOOD condition on the paperwork. I also photographed it in detail.

Ford Credit wrote to me requiring me to pay excess mileage @6p/mile (car went back with 45000 miles on it after 24 months, the contract was priced at 15000 miles per year).

I refuted this in writing pointing to their contract. On the front page of their contract there are two paragraphs:

Termination Your Rights
You have the right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods and to half the amount payable under this agreement, that is £9891.58 If you have already paid at least this amount plus any overdue instalments, and have taken reasonable care of the goods, you will not have to pay any more.

Directly below this paragraph is a further paragraph.

Excess Mileage:
You must not exceed the Approved Annual Mileage of 15000 miles. If you do exceed the Approved Annual Mileage, Excess Mileage Charges are payable at a rate of 6.0p per mile plus VAT where this agreement ends for any reason under paragraph 8(a), 8(b), 8(c) or 8(d) of the Terms and Conditions. Note if this agreement ends early for any reason, we will proportionally reduce the Approved Annual Mileage for the purpose of the calculation of Excess Mileage Charges.

8(a) Talks refers to my right to terminate as quoted above.
8(b) - (c) talk about possession of the car and them ending the agreement (not relevant here)

8(d) - This may be relevant so I will type it in full

Where we have taken back the vehicle
(d) If we end this agreement where we have taken back the vehicle you must pay us on demand: This is specific to if THEY end the agreement. In this case have I not terminated the agreement?
(i) any arrears of monthly payments and other sums due but unpaid at the date when the agreement ended.
(ii) our reasonable costs of repairing the vehicle and restoring it to goo condition (commensurate with its age and mileage). The vehicle was already graded as good on handove
(iii) the outstanding balance under this agreement (which is all amounts payable under this agreement less the total amount you have paid) less:
(A) any arrears; and
(B) the Purchase Fee shown on page 1 under "Payment Details" and
(C) the net proceeds of the sale of the Vehicle (failure to return the vehicle with the accessories and documentation cited below may lead to a lower price on resale); and
(D) any rebate of the charges for credit to which you may be entitled by law

there are then some other irrelevant paragraphs until
(h) If the mileage travelled by the vehicle has exceeded the Approved Annual Mileage you must pay the excess mileage charges (shown under the heading excess mileage on page 1)

I claimed that they could not claim excess mileage because, and I quote (ignore the rebate for payments in advance, it turns out that it was payment in arrears, I have also settled a final amount for the number of days I had the vehicle up to the day of collection)

I dispute your calculations of liabilities on termination.

I believe that my credit agreement is paid monthly in advance. I have therefore paid for a whole month prior to my notice of termination which you have confirmed as being received on 30^th June 2016. A full payment was taken on the 26^th June 2016 and as such I request that you repay to me, by reason of your own calculations of £8.68/day an amount totaling the number of days since your receipt of my notification and the next due payment date. I calculate this to be 25 days which totals £217.00. Please pay this amount within 28 days of the collections of the vehicle, either by BACS payment or cheque made payable to Marc Mears at the address listed above.

Furthermore, Voluntary Termination as laid down in statute makes no provision for you to recover excess mileage. The mileage on the vehicle as of today is 45340 miles. I refute any liability for excess mileage and under the Terms and Conditions on Page 1 of the FORD CREDIT Hire Purchase Agreement regulated by the Consumer Credit Act 1974 which I was provided with when I signed the agreement it states clearly that on payment of half the total amount payable (According to your representative I have paid 53% of the total amount payable) and providing I have taken reasonable care of the vehicle, I will not have to pay any more.

I believe I have therefore satisfied all requirements laid down under the Consumer Credit Act for Voluntary Termination and ask that you proceed with collection of the vehicle without delay and arrange for the refund requested above. I see no reason why this matter should be passed to Link Financial Outsourcing Ltd or any other representative for the collection of liabilities that you incorrectly lay out and you should note that any action of this type could render Ford Credit in breach of its obligations to keep clear and accurate records under the Data Protection Act.
Ford have come back to me having registered this as a FCA complaint and refused to uphold my complained (I never actually complained I simply stated that I did not agree with their calculations based upon the fact that I did not believe I was liable for excess mileage) they have said

The Consumer Credit Act 1974 stipulates although the hirer has the right to voluntary terminate a hire purchase agreement they will remain liable for any liability which has accrued before the termination.

They then go back to pointing to the page one paragraph about excess mileage.

In summary I can now go to the Ombudsman - This is not a mis sale claim, it is a contract dispute, or I can pay or go to court. I am quite happy to go to court and test this, I have yet seen anyone who has tested it, however my I would just like to know if I am on the right track. My feeling is that I should write back with a statement to the effect that the excess mileage was not liable at the time when I terminated and my account was up do date and all instalments paid. In addition does the work Installment have a specific legal meaning and if so can excess mileage be classed as an instalment. If so it looks like their contract contradicts itself or is at odds with the Right to Terminate Clause. Bearing in mind this clause is based on statute the law would presumably override any other Terms and Conditions?

Some clarity or help would be much appreciated. If I am on shaky ground I would rather know now.

Many thank in advance.

Good morning, welcome to LB.

I'll get some help for you.
[MENTION=71570]R0b[/MENTION] can you help please?

nem

[R0b]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

Hello,

Firstly, this is the second time I have come across ford credit passing on charges to a debt collector (or debt purchaser). Secondly, what was the date of the letter you sent to Ford? There is nothing within the Act that states the agreement is only terminated once it has been acknowledged. Therefore if the letter was sent on or before 23 June 2016 then arguable the agreement is terminated immediately once it has been delivered (taking into account a couple of days for delivery). Some lenders delay in sending an acknowledgement letter when there is a payment due so that they receive an extra payment.

Have you tried reclaiming this amount back via the direct debit scheme if you were paying by direct debit?

As for the excess mileage, you are on the right track yes and it is a debated view as to whether excess mileage can be charged. My opinion is that there is lots of evidence including a county court case which points to the fact that a debtor's liability is limited to 50% of the total amount payable provided they terminated in accordance with s.99 of the CCA.

s.100 sets out the total price payable and under s.189 the definition of 'total price' is the total amount payable under the agreement including the option to purchase but explicitly excludes payments in relation to breach of the agreement, damages or compensation.

s.173 provides that any contractual term which is inconsistent with the protection of a debtor's rights is void an unenforceable. This does not mean that the clause is not allowed to be in there at all because this clause could still be enforced if for example Ford had terminated the agreement or you agreed to a repossession of the vehicle. It just means for the purposes of s.99, Ford cannot enforce the excess mileage.


Whilst I do not dispute that termination does not affect liability which has accrued before termination, when you take into account the definition of 'total price', excess mileage is not part of the total amount payable and is instead a contractual term, therefore any accrued liability can only related to the monthly arrears you might have missed. For example, you have already paid over 50% of the total amount payable but you are two months in arrears before you terminate, you will still owe the two months of arrears but nothing else.

There is lots of solicitor practitioner books which confirm this position and I suspect the reason why it hasn't gone to court is because the finance companies know this is the case and is best left alone as they could make more money from people than losing in court. Technically this is a false representation of the law but that also requires someone to bring a claim to prove that and most people are either happy to pay a modest sum or wait until a claim is brought against them.

Instalment does not have a definition but if you take its ordinary meaning it is a sum of money paid over time.

Something which also evidences that debtor's have a maximum liability under s.100 is set out in the Consumer Credit (Agreements) Regulations 2010 (http://www.legislation.gov.uk/uksi/2...chedule/1/made) at paragraph 30. It says that HP / Conditional Sale agreements must state the maximum liability under s.100. In your case, Ford has done this with the following wording:

Termination Your Rights
You have the right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods and to half the amount payable under this agreement, that is £9891.58 If you have already paid at least this amount plus any overdue instalments, and have taken reasonable care of the goods, you will not have to pay any more.

Therefore excess mileage cannot be charged as it does not fall within the maximum liability under s.100, it does fall within s.173 an is therefore unenforceable.

Lenders and alike will of course dispute this point of view but ultimately there is overwhelming evidence which confirms that liability is restricted to 50% and I would find it highly surprising that a court would ignore all of the evidence.

[Deakus]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

Rob,

That is really helpful. Thank you.

Would you have any understanding of what conditions should be met before any company is able to pass on/sell a debt to a collection agency.?

I guess what I am asking is whether or not I can prevent Ford from passing it on as a debt to an external agency. If I can keep Ford "nose to the grindstone" and get them to relax their stance on this it will save hassle all round. It they pass it over and it then turns out not to be a debt, do I have any recourse against Ford for costs incurred or incorrectly passing my details to an outside agency?

At what point does this become and "established" debt as opposed to two parties arguing about it. Can Ford pass it over simply to try and side step the issue? Does it help if I restate that this is not a debt. That it is not a complaint about mis-sale but that it is a dispute over contractual terms and therefore should be resolved by them because it is their contract?

Thanks again.

[R0b]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

Ford can pass on the debt at any point they wish albeit it is merely an alleged debt at this time. The only point in which it becomes a recognised debt is through a judgment by the Court.

If it were passed to a debt collection, then Ford still owns the debt and is simply outsourcing the collection to a third party which they will no doubt receive a commission for successful recovery.

If they sold the debt on then that would be an assignment, and for the third party to have any legal rights to bring a claim against you, it would need to be a legal assignment which would need to satisfy the criteria set out in s.136 of the Law of Property Act 1925 i.e. they must notify you in writing of the assignment, unless there is a clause in the agreement prohibiting assignment by either party although that is very unlikely as creditors like to assign things.

If a legal assignment is not complied with then it will be an equitable assignment and in order for the third party to bring a claim it would need to be brought by Ford with the third party as an interested person.

If Ford believe it to be a debt they can do what the want, bigger fool the third party in buying a debt for something which cannot be enforce but that is not your problem.

You may wish to keep an eye on your credit report in case either Ford or the third party applies a default on your account too, at which point that becomes a breach of data protection for inaccurate data.

Hopefully that answers your questions?

[Deakus]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

That is great thanks very much. I will keep the site updated on progress, it may be of use to others as time goes on.

[Deakus]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

Latest Update:

I replied to the Head of Customer Relations at Ford (they sent out an initial leaflet saying that if I were unhappy with any decisions I could write to them) explaining that this was not an FCA complaint of mis-sale (a process they seem to have followed) but a contract dispute and set out the reasons why I felt their contract was unenforceable (as already laid out very kindly by R0b above). This letter was sent on the 2nd August 2016.

Today 5th August 2016 I received a collections letter from Ford telling me to pay £1014.48 within 14 days or the "any amounts unpaid after the above date will be assigned to Link Financial Outsourcing Ltd who will contact you in due course". It looks like their letter was dates 2nd August so the two overlapped.

I called (I will follow up with a letter) today explaining that I did not believe Ford could enforce these terms within their contract and asking specifically what Fords relationship was with Link Financial Outsourcing Ltd. Were they planning to legally assign the debt over, or were they simply outsourcing collection of the debt. This was too much for the collections department who passed me to the Customer Relations Department who had received my letter. I suggested that if Ford were seeking to assign the debt and a court found in my favour there would most likely be issues of data protection and passing incorrect data to a third party. Collection has been suspended and my original letter has been passed to the Ford Legal Team.

I will confirm this to them in writing and post any updates.

Thank you for all your help.

[R0b]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

Hi Deakus,

thanks for the update, although I don't think you have any argument on breach of data protection. When you say passing incorrect data are you referring to the outstanding balance? As I pointed out the outstanding balance is an alleged debt that is in dispute so that does not make it incorrect data and whether it is correct or not is determined by the court.

If I were in the legal team at Ford, I would say your arguments on breach of data is groundless. Ford is entitled to assign the agreement whichever way they please and the only way in which they are not allowed is if it is explicitly stated in the terms and conditions of the contract and I'm willing to put 95% of my faith in that. Even if the assignment is silent in the contract then it is also well established that they can assign it.

However, if they apply a default marker on your credit file in respect of the alleged balance, then I would say that is a breach of data protection because it is inaccurate in the sense that it is a disputed debt that does not form part of the credit agreement but is actually damages/compensation.

In my opinion Ford are entitled to assign it, either legally (which they must notify you of doing so) or equitably (where they don't need to notify you but Link cannot bring a claim without Ford being part of it). Once that information passes, then Link has an obligation to comply with the data protection act in the same way Ford Does.

I apologise if my last post was confusing but I don't think at the moment Ford, or even Link once assigned will be in breach of the data protection act.

[Deakus]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

Thanks for clarifying R0b. I have not put the Data Protection stuff in my email I just stuck to the legal points on the Consumer Credit Act but clearing this up helps because at some point I am sure someone with threaten me with putting a marker on my credit file and it will be helpful to be able to push back at them and send a cautionary signal.

In the meantime I will stick to the points of dispute within the contract and see what they come back with. The interesting thing for me was despite speaking to people who never want to pass you deeper within the organisation and just keep quoting the contract clauses at you as soon as I asked them to clarify on the relationship between them and their collection agent and formally requested to understand if they were legally assigning the debt to a third party I was passed to a manager and then very rapidly to a department that could view my letter who then in turn also passed it on to the legal department. It feels like progress is being made. Thanks again.

[Deakus]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

The latest letter arrived from Ford Credit in the post today. It seems to me to be less robust than I had anticipated but I will summarise it here because they have not given up on their position regarding Excess Mileage charges. I will try not to recap so that I can keep it a brief as possible and the thread follows the timeline as cleanly as possible. I have a couple of questions at the end.

The latest response which has take them a couple of weeks basically:

Repeats their position under the title Factual Background. They restate the obvious which is that I went in to a dealership, looked at a car, signed a contract and then the car was delivered (no new information there then). They stipulate that the contract had excess mileage clauses in it and that I was aware of them (nothing new there either).

They state that I had rights and protections under the CCA then at point 6 they have written the following:

6. If you exercise this right, you became responsible under Section 100 of the CCA to pay to us:

6.1 the difference (if any) between (a) one half of the total amount payable under the Agreement and (b) the total amount of payments which had fallen due by the date you ended the agreement; plus

6.2 any amounts which were due but not paid by you at the date you ended the agreement; plus

6.3 compensation if you have failed to take reasonable care of the Vehicle.

They then confirm in points 7-8 that I gave written notice on 27th June 2016 and that the vehicle was recovered on 14ht July 2016 and state the vehicle mileage as being 45,340 and that I had the vehicle for 2yrs and 1 month (the agreement was arranged with a mileage allowance of 15000 miles per annum. They explain that this is calculated monthly.

They then have a further section to the letter entitled Legal Position I will quote this verbatim:

9. You were required to take reasonable care of the Vehicle. This included not exceeding the Mileage Limit. By the date of the Vehicle's return, you had covered 45,340 miles in 25 months.

10. The agreement states that if it ends early for any reason then we would "proportionally reduce the [Excess Mileage] for the purpose of calculation of" the excess mileage charge (see page 1 of the Agreement). Because you had the Vehicle for 25 months you should not have exceeded 31,250 miles ("Total Mileage Limit") (i.e. 36 times by the Monthly Mileage Limit). In fact you covered 45340 miles. The difference between these two amounts is 14,090 miles ("Excess Mileage").

11. The total amount you owe us for failing to keep to the Total Mileage Limit is therefore £1,014.48 (i.e. the Excess Mileage multiplied by the Excess Mileage Charge). Our position is that we are entitled to this amount under section 100(4) of the CCA.

Then then restate that they believe they are owed this amount and thank me for my correspondence.

It appears that they have completely ignored the points I raised relevant in the CCA as explained earlier in the thread and just restated their position according to their contract and added in that exceeding the allowance constitutes not taking reasonable care of the vehicle.

I am tempted to respond asking them to re-read my last letter but this will probably not move things forward any further. I guess my questions are:

1. Does exceeding excess mileage constitute a breach of reasonable care? Who determines reasonable care? The CCA? or the car company? When the vehicle was collected it was classed as in "Good" condition and I have this in writing from the collecting agent with the mileage stated on the same paperwork as the car is classified as in "good" condition.

2. There is some detail here I think about when that excess mileage payment because due. They are claiming under the T&Cs that I owe any amounts that would be due but not yet levied at the time of collection...is this relevant or smoke and mirrors.

To my mind it feels as if my response position should be:

1. The excess mileage is not a valid instalment under the CCA and let them test it.
2. The vehicle was picked up, assessed the mileage logged and then classified as in "Good" condition so it cannot be classed as having been kept without taking reasonable care. I am not sure doing more miles can be classed and not taking reasonable care anyway. The car is built and designed to do miles in fact the warranties cover much more than the miles I did. They seem to be conflating their Terms which are contradictory with the CCA.

Any thoughts on how I should respond or if i am barking up the wrong tree would be welcome.

Thank you again for all your help.

Marc.

[Deakus]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

[MENTION=71570]R0b[/MENTION] I am drafting a response to Ford Credit regarding the latest update on excess mileage and would not mind a second opinion on my stance if you possible

CONTRACT DISPUTE EXCESS MILEAGE CHARGE – ACCOUNT NUMBER 950684010

Further to your letter dated 17^th August 2016.

Thank you for your response.

The laying out of the factual background items 1-5 are correct statements of fact. I wished to by the car, registration RE14YUB, applied for finance was subsequently accepted and entered in to the Ford Hire Purchase Agreement regulated by the Consumer Credit Act 1974 on 9^th July 2014. This is not in dispute.

At item 6 of your response of 17^th August 2016 you start to use the word “If” in your points. These are therefore no longer statements of fact.

From items 6 onwards up to and including section 8 you are repeating the terms of your contract, not the terms of the CCA section 100 and are therefore conflating two sets of terms. This is not helpful in coming to a resolution.

For your benefit and so there can be no doubt I provide you with the wording of s100 of the Consumer Credit Act 1974. Please use this as your reference point, not your terms and conditions on the basis that it is the legislation that takes precedence in this matter of dispute.

100
Liability of debtor on termination of hire-purchase etc. agreement.
(1)
Where a regulated hire-purchase or regulated conditional sale agreement is terminated under section 99 the debtor shall be liable, unless the agreement provides for a smaller payment, or does not provide for any payment, to pay to the creditor the amount (if any) by which one-half of the total price exceeds the aggregate of the sums paid and the sums due in respect of the total price immediately before the termination.
(2)
Where under a hire-purchase or conditional sale agreement the creditor is required to carry out any installation and the agreement specifies, as part of the total price, the amount to be paid in respect of the installation (the “installation charge ”) the reference in subsection (1) to one-half of the total price shall be construed as a reference to the aggregate of the installation charge and one-half of the remainder of the total price.
(3)
If in any action the court is satisfied that a sum less than the amount specified in subsection (1) would be equal to the loss sustained by the creditor in consequence of the termination of the agreement by the debtor, the court may make an order for the payment of that sum in lieu of the amount specified in subsection (1).
(4)
If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly.
(5)
Where the debtor, on the termination of the agreement, wrongfully retains possession of goods to which the agreement relates, then, in any action brought by the creditor to recover possession of the goods from the debtor, the court, unless it is satisfied that having regard to the circumstances it would not be just to do so, shall order the goods to be delivered to the creditor without giving the debtor an option to pay the value of the goods.

I have highlighted in yellow the key areas for your attention and the reasons for my assertion that I am not liable for the debt that you currently claim from me. It is clear that sections 2,3, and 5 are not in dispute at this stage.

You have confirmed that on 27^th June 2016 I terminated under s99 of the CCA. Therefore s100 of the CCA applies. In sub section 1 it is clear that the liability is limited and it specifies the basis of that calculation and is very clear that the liability is immediately before termination.

At the point of termination I had a conversation with Ford Credit at which I was informed that there was a further amount to account for days between termination and collection and I paid this amount and the account was at zero.

Upon collection your agent inspected the vehicle, logged the mileage and in writing confirmed that the vehicle was in GOOD condition. It is therefore not possible for you to claim that I had not taken reasonable care of the vehicle. In addition the vehicle is designed to drive many more miles that this vehicle had, it therefore is perfectly reasonable to consider this normal wear and tear. It is not related to your terms under contract regarding excess mileage. Excess mileage is a financial term that you use to determine resale value and not related to the s100 of the CCA.

I therefore refute point 9 under the section Legal Position of your response of 17^th August 2016. I do not believe you are entitled to regard the excess mileage in this case as a breach of sub section 4 of the CCA as listed above.

In point ten you once again refer to your terms and conditions and disregard the protections offered by s100 of the CCA arising as a result of termination under s99 of the CCA. The protections offered by the act can not be over written by your terms and conditions. The excess mileage was not due at the point of termination. It is not a payment and you confirmed that the vehicle was in GOOD condition. I therefore believe that there is no liability in this case for excess mileage and it is therefore not possible for you to proportionately reduce a liability of zero.
I restate my position that I am not liable for the amounts you claim in your letter dated 17^th August 2017.

I am keen to bring this matter to a close. The returning of the vehicle occurred because became redundant and could no longer make the payments. I am one of those people that the CCA was written in to law to protect.

If you continue in your position and pursue the debt it will be left for a court to make a determination in this matter and clarify the position in law regarding Excess Mileage charges and how they relate to s100 of CCA.

I would ask simply that you confirm to me that you no longer intend to pursue this disputed debt and set the balance of my account to zero with no adverse marker on my credit file other than a note indicating that the debt was settled via voluntary termination under s99 of the CCA.

Please let me know how you intend to proceed at your earliest convenience.

[R0b]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

Hi Deakus,

Bit too wordy I think, needs to be straight to the point and no waffle. As I understand it they are claiming the car was in an unreasonable condition because of the excess mileage and this raises several issues:

1. They have provided no evidence that the excess mileage has caused the car to be in an unreasonable condition
2. If they are claiming that, then that requires an independent expert's opinion
3. If the car was regularly serviced that would offset any claim for unreasonable condition caused by excess mileage
4. As you have said, the fact that the car was noted as being in good condition so why are they trying to claw back charges under s.100(4) since you have already satisfied this critera

Here's a quote from a case Brady v St Margaret's trust 1963 that sums this all up.

There should be evidence by the hire-purchase company to show the condition of the goods at the time the agreement was made and to show how far the hirer has defaulted under it. As I read this clause, the hirer's duty is to keep the car in the condition in which it might reasonably be expected to be if he had looked after it properly. He need not put it in a better condition than it was when he hired it. He need only keep it in the condition in which a reasonably minded hirer would keep it. Thus he would repair it if there was an accident, and he would do the immediate repairs in the course of running the car, but no more. The hire-purchase company should give evidence of any default on his part in that duty.

So you should try and succinctly make reference to all of the above as best you can. Do you know if they have actually assigned the agreement to someone else? I recall them saying they were going to.

[Deakus]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

[MENTION=71570]R0b[/MENTION]

A shorter version following your comments. I have left out the case law example pending their response, if they want to test it in the courts then it looks like a very useful piece of history. Thank you very much. As far as I know the debt still sits with Ford who have halted collection proceedings whilst their legal department looked at my last letter. In their latest letter they have simply restated why they feel the liability exists without giving any indication of their next steps, hence I have asked in this response for them to declare their intentions.

CONTRACT DISPUTE EXCESS MILEAGE CHARGE – ACCOUNT NUMBER 950684010

Further to your letter dated 17^th August 2016.

Thank you for your response. I note that you continue to refer to your Hire Purchase Agreement Terms and Conditions on a dispute that arises from conflict between your Terms and Conditions and the protections arising from s100 of CCA. In this instance it is the statute that takes precedence over your Contract Terms. It is therefore not valid for you to continually refer back to Terms that are rendered unenforceable by The Act.

It is my assertion the all criteria outlined in s100 or the CCA act have been adhered to and as such no further liability exists. I maintain that I do not owe the amounts that you state in your letter of 17^th August 2016.

There some points that I wish to make in support of this:

1. You have provided no evidence that the vehicle has been kept in an unreasonable condition. If this is the case then an independent experts opinion is required.

1. The car was maintained and serviced in accordance with the manufacturers instructions, there was no damage to the vehicle and the interior was clean, tidy and without significant wear. The mileage had not caused the car to be in an unreasonable condition. Upon collection the vehicle was inspected by your agent, the mileage was logged and the report classed the car as in GOOD condition. You therefore cannot claim that the car had been returned in an unreasonable condition.

On the 27^th June 2016 I provided written notice under s99 of CCA to terminate the agreement. The criteria governing termination and its protections are laid down in the Act and I have complied with them in all respects.

I therefore ask that you confirm to me that you no longer intend to pursue the alledged debt which I have disputed, and that you log the debt on my credit file as settled. You are entitled to place a note on the file indicating that it was a voluntary termination but there should be no default markers or other contra indicatiors.

Please advise me of how you wish to proceed at your earliest convenience.

[R0b]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

1. You have provided no evidence that the vehicle has been kept in an unreasonable condition. If this is the case then an independent experts opinion is required, explaining in full the direct causal link between the excess mileage and the unreasonableness of the car.

Inserted in rec, the rest sounds fine to me, but remove the very last sentence. Does your credit file still show as an open account with an amount outstanding on there?

In the interests of batting letters back and forwards I would insert the quote with something like (but it is up to you), you may or may not be aware of the Court of Appeal case, Brady v St Margarets Trust 1963 in which Lord Denning commented directly on this point:

There should be evidence by the hire-purchase company to show the condition of the goods at the time the agreement was made and to show how far the hirer has defaulted under it. As I read this clause, the hirer's duty is to keep the car in the condition in which it might reasonably be expected to be if he had looked after it properly. He need not put it in a better condition than it was when he hired it. He need only keep it in the condition in which a reasonably minded hirer would keep it

Without such evidence, you have no reasonable grounds for pursuing me for the alleged sums.

[Deakus]

Re: At what point can a finance company pass VT excess mileage on to a debt collector

[MENTION=71570]R0b[/MENTION] I would appreciate a little guidance on the following and what it means for me. The latest notification has come in from Ford Collections Department with the following text:

"We write to inform you of an important change concerning the management of your account.

Effective immediately, your account has been assigned to Asset Link Capital (No.5) Limited who have appointed Link Financial Outsourcing Ltd to recover any outstanding debt due.

This means that all future contact and correspondence with you concerning the above account will be with Link Financial Outsourcing Ltd who will now be responsible for reporting the details of the above account to the Credit Reference Agencies."

They then give the contact details and telephone number for Link Financial Outsourcing Ltd.

I guess the next steps with be increasingly aggressive letters from the collection agent and Bailiffs threats etc however there are a couple of questions in my mind.

1. Is it material that the debt has been assigned to Asset Link Capital (No.5) and yet my correspondence, credit reference agency management and the company who are recovering the debt sit with Link Financial Sourcing Ltd? Should I be discussing the liability with the company that holds the debt or the collecting agent?

2. Are my next steps to sit and wait for Link to contact me or should I contact them and explain the situation and see if they want to pursue (I have no knowledge of how much information Ford would have given them).

3. Should I respond in any way to Ford?

Any guidance on next steps (if there are any) would be much appreciated.

Regards

Marc