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Stuart J
Stuart J, Solicitor
Category: UK Law
Satisfied Customers: 22624
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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I am going through a small dispute wit Audi Financial

Customer Question

Good morning, I am going through a small dispute wit Audi Financial Services.
There was an arrear on the account. The lease contract was due to end on 29 April.
I have called to make the balance payment on 14 April but I have queried the amount because it showed three payments in arrear, not two as I thought.
The adviser and I agreed to go and check and to speak again after a few days.
On 25 April they have terminated the agreement. I called, unaware, on 29 April to make full payment and extend the contract for one more year as I was entitled to, but I couldn’t.
I have complained and I was told I had to wait up to 8 weeks for a response. They have sent a response on 09 June, which I didn’t get because they have sent it to my accountant (registered office) despite me telling them to change the address they had on file. On 27 June at 7.30 in the morning someone came and took my car away.
I have tried to argue the case in the last couple of days but with no success.
Then I had a look at the T&C I have signed and under “Our right to terminate” it says: “We may terminate the hiring by giving you written notice if any of the following happens..” THEY HAVE NEVER SENT A WRITTEN NOTICE nor they have advised they were going to terminate the agreement 4 days before it run out anyway.
Submitted: 1 year ago.
Category: UK Law
Customer: replied 1 year ago.
I want to pay them, get tmy car back and extend the agreement for one more year.
Expert:  Stuart J replied 1 year ago.

Good morning. Thank you for the question.

It’s my pleasure to assist you with this today.

Please confirm that I got the facts right.

The agreement had 4 days before it finished and at that stage they terminated the agreement and there was either one month or three months in arrears (we’re not sure yet). Is that what happened?

You admit that you were at least one month in arrears and clause 7.3 covers that as a repudiation of the agreement that you no longer want to be bound by it.

Whereabouts in the agreement does it say that you are able to continue after the end of the initial period of 36 months?

Customer: replied 1 year ago.
The arrears were Sep 2015 and Feb, March 2016.
I was not aware of Sept 2015 arrear. That is why I have queried it on 14 April call.
In Sep 2015 there were money in out of the business account and I didn’t realise payment was not made.
Feb and March we had late payments from clients, I have called in April to pay the balance.
Because the lease contract came to an end on 29 April I had three options: return the car – buy the car – extend the agreement for one more year based on a new valuation of the vehicle.
I have received a letter on 07 April which said: “we note that your account is in arrear for £2,065.95. The current balance outstanding account is £2,065.95. Please contact this office to discuss your agreement.
When I have received the letter I called – on 14 April.
Here is when I have called to pay but as I was not aware of Sep 2015 miss payment I have queried the matter. I have agreed by telephone with the adviser that both of us were going to look into it and we would talk again to move forward. But on the 25th they have cancelled the agreement.
Whoever cancelled the agreement was not aware of my call on the 14 April. On top of that they have never issued a written notice.They have told me that because they are unregulated they don’t have to let me know that I am in arrear and they have the right to terminate the agreement even after only one miss payment. I questioned how it could be that for over six months they have never wrote or called me about the Sep 2015 miss payment. I said, any customer could have been in my same situation or because an error with the bank. They should be always communicating with the customers.
Expert:  Stuart J replied 1 year ago.

Thank you.

Whereabouts in the agreement does it say that when it finished you can carry on for another 12 months or another period? I couldn’t find it.

Customer: replied 1 year ago.
I have sent you copy of a letter received 29 Feb 2016.
I called Driver Sales Programme to get a valuation of the car if I wanted to buy it. I called early April.
I was given a valuation of 21K. The adviser here told me that I also had the option to extend the agreement for one more year. All I had to do is pay a fee of I think of £90. The new monthly payment was then recalculated based on the new valuation of the vehicle.
I have spoken about this option with VWFS on 14 April. The advisor confirmed everything. All calls were recorded.
Expert:  Stuart J replied 1 year ago.

I’m sorry to say that I think you’re going to struggle with this.

Firstly, there is nothing in the agreement which says that you can extend.

There is a letter dated 29 February 2016 which is not an offer as such but invites you to telephone.

You telephoned and came to some kind of agreement over the telephone but that is not in writing anywhere it seems. I think you would struggle to enforce that extra time based upon the evidence you’ve given me.

The lease is to a limited company and therefore doesn’t come under the provisions of the Consumer Credit Act.

The agreement quite clearly says, in quite Draconian terms, but if you miss any payments, (7.3) you are repudiating the agreement and don’t want to continue.

The 7.1.1 it says that they can terminate the agreement if you fail to make any rental payment on time.

It does say however that they can terminate it by giving written notice and, from what you have said, they have not done that. Hence, by taking the car back without that notice, they are in breach of the agreement as indeed you are.

The problem that you have here is that you cannot beat them with a stick until they give you the car back and if they don’t get the car back and reinstate it for another year, then your only recourse is to take them to court. It is most unlikely that if there are arrears on the account (1 month or 3 month) that the court would order them to reinstate the agreement. It would be different if there were no arrears.

Even so, court proceedings are not going to be quick or cheap and if you’re lost, you could easily be paying between £5000 and £10,000 in court costs.

Volkswagen Financial Services (UK) Ltd is authorised and regulated by the Financial Conduct Authority and registered under number 311988. Whilst the agreement is not regulated under the terms of the Consumer Credit Act for the reasons I mentioned earlier, VFS and therefore they have to treat customers fairly.

I think the only recourse that you would have would be to make a complaint to the Financial Ombudsman Service but that’s not going to be quick although it is free. In all honesty, I still don’t think that they’re going to uphold your complaint quite simply because of the arrears although it depends on the view they take on the non-giving of notice. Don’t be surprised if they come up with a copy which they alleged to have popped in the post.

I’m sorry, I wish I could give you better news but based upon what you have shown me, that’s my opinion.

Does that answer the question even though it’s not the answer you wanted?

Can I answer any specific points arising from this?

Please do not forget to use the rating service to rate my answers positively so that I get paid for my time here today.

You may get the impression that the thread closes after rating, but it does not, it remains open and we can still exchange emails if anything needs clarification.

Kind regards

Customer: replied 1 year ago.
I have wrote to them:
Please find attached the Leasing Agreement and Terms for the vehicle Reg: BV13WHC
I was asked by one of your advisers to send copy of the Terms.
I refer clause 7.1 of the Terms which says that VFS (UK) can terminate the agreement by giving written notice. However, they have not issued a notice. Therefore, by taking the car back without the notice they are in breach of the agreement.They have replied:
Thank you for completing the security questions. In relation to your query I can confirm we sent a termination notice on the 25.04.16. Although I appreciate you have advised in relation to the address this was a previous accountant’s of yours and you had advised of a different address we were not informed to update this therefore all letter correspondence has been sent to this address.Then I have found this:
Duty to give notice of termination (non-default cases).(1)The creditor or owner is not entitled to terminate a regulated agreement except by or after giving the debtor or hirer not less than seven days’ notice of the termination.
(2)Subsection (1) applies only where—
(a)a period for the duration of the agreement is specified in the agreement, and
(b)that period has not ended when the creditor or owner does an act mentioned in subsection (1),but so applies notwithstanding that, under the agreement, any party is entitled to terminate it before the end of the period so specified.
(3)A notice under subsection (1) is ineffective if not in the prescribed form.
(4)Subsection (1) does not prevent a creditor from treating the right to draw on any credit as restricted or deferred and taking such steps as may be necessary to make the restriction or deferment effective.
(5)Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.
(6)Subsection (1) does not apply to the termination of a regulated agreement by reason of any breach by the debtor or hirer of the agreement.CONCLUSION
They have said they have sent notice on 25 April but they should have given no less than seven days.
Is that correct?
Expert:  Stuart J replied 1 year ago.

Thank you.

It seems most strange that they asked you to send a copy of the terms. They should have them.

If you didn’t inform them of the change of address, then the notice is adequately served.

Because the agreement is to a limited company, it is a non-regulated agreement. Your reference is to a regulated agreement.

At this stage in time I don’t think there’s any legal action you could bring. I think you will be better appealing to them and asking whether you could pay the arrears, take the car back, and continue for another 12 months. As you are in arrears of 1 month or 3 months (to be decided) they are unlikely to do that because all they may be doing is setting themselves up for another account with arrears on. I know that you wouldn’t fail to pay that’s not the way they look at it.

I’m sorry, I wish I could give you a better answer but I really don’t think there’s a way of getting the car back unless they decide to be a bit more reasonable. You don’t have a legal remedy and even if you did, could take some time to get to court and be risky and expensive.

When you get a moment, please don’t forget to use the rating service to rate my answer positively. If you don’t rate it positively, then I don’t get paid at all.

You may think that the thread closes after rating, but it does not, it remains open and we can still exchange emails if anything needs clarification.

Kind regards.