A man who had his car repossessed has successfully recovered £17,500 in damages from his finance company after taking advice from a consumer law specialist.
Liam Waine, Partner and head of the Consumer law team at Stephensons Solicitors LLP, acted for the man who had bought the car with the assistance of a Conditional Sale Agreement supplied by Lombard North Central Plc.
Liam said: “My client bought an Audi and provided a cash deposit, paying the rest with the use of the Lombard finance. However, some time after entering into the agreement he was involved in an accident with the vehicle and it sustained some damage. His injuries meant he could not work and he then got into financial difficulties.
“The finance company issued default notices and notices of arrears and sought to terminate the agreement. Shortly thereafter the debt recovery was passed into the hands of a bailiff who eventually repossessed the vehicle from our client.”
The finance company initially argued that the vehicle was not protected goods under the Consumer Credit Act 1974. They advised that the client had paid less than one-third of the total purchase price but had failed to take into consideration the client’s cash deposit. Following this, they advised that the client consented to the taking of the vehicle.
Liam continued: “He did not consent to the vehicle being taken and had email evidence to advise the finance company that they could just inspect the vehicle, presumably so they could assess the damage caused by the accident.”
The man then turned to Stephensons for advice. Liam quickly identified a significant breach of Section 90 of the Consumer Credit Act 1974 (as amended).
Given the miscalculation of the amount paid by the client under the agreement, ie: failure to take the deposit amount into account, and the error in relation to consent, Stephensons were able to successfully argue a breach of Section 90 of the Consumer Credit Act.
The man was able to recover all payments made under the finance agreement. In addition the finance company agreed to pay his legal costs.
Liam said: “I would recommend that any debt adviser faced with advising clients in recovery of Protected Goods cases to put the issue of Consent under the microscope.
“Just because a finance company provides evidence of consent, for example in the form of an authority, don’t automatically assume this is valid consent. You need to check with the client how the consent was obtained and see whether any pressure or duress was used to obtain it.
“It is also worth checking whether the creditor has tried to repossess protected goods by unwittingly miscalculating how much the debtor has paid under the agreement. If the creditor gets this wrong, they face the possibility of having to unwind the agreement and handing all payments made under it back to the debtor.”
Every year, the Stephensons team assists hundreds of people facing debt and repossession. In many cases, they can successfully challenge the validity of loan agreements. For more information about Stephensons’ Consumer team, visit www.debtandrepossession.co.uk or call 0845 144 1441.
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Editors’ notes
- Stephensons is the leading firm in the country at challenging unfair agreements, and specialises in writing off agreements, defending mortgage repossession claims and fighting bankruptcy and charging order hearings