BBC London covering this in detail tonight.
Folks are using their car to raise a loan for " loan sharks" .
The V5 is handed to a loan company and also the ownership.
Payments to the loan company are not maintained so then the original owner sells the car.
Innocent buyer then gets the loan shark co on the doorstep to reclaim the car.
One guy shown , lost IIRC £6-7K.
I can only assune a duplicate V5 was obtained to enable the sale.
All credit checks will of course come back clean.
Just the sort of news I wanted as I am looking to replace my old Mondeo.
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The law should be changed to protect the innocent. The loan shark should chase the borrower and not the car if that is sold to a 3rd party.
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Tricky one that. Morally probably correct Movi. But, look at it another way. Suppose someone stole something from you. Which is in effect what the person who fails to keep up their payments to the lender is doing if they then sell the car on. They then sell it on to an innocent third party. Is it not still your property and not that of the third party?Do you really care about the third party or do you not just want your property back?
Last edited by: Humph D'Bout on Mon 27 Feb 12 at 15:14
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An innocent private purchaser is protected from the car being seized by a finance company, or that used to be the case under the terms of various consumer credit acts where the financed vehicle was the subject of a regulated HP or conditional sale agreement.
Traders are NOT so protected as it is considered that they have the tools and experience not to be involved as "innocent" parties!
Normally a loan advanced to buy a car does not give the lender title to the vehicle, so it cannot be repossessed.
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>> I can only assume a duplicate V5 was obtained to enable the sale.
>> All credit checks will of course come back clean.
If an HPI check is correctly carried out (submitting the registration no., VIN and V5 logbook number) and a check comes back clean, wouldn't you be reimbursed under the HPI warranty if it turned out to belong to a loan shark?
I appreciate that "in the heat of the moment" it may be tempting to forego an HPI check especially on a lower priced car, but it's got to be a worthwhile precaution when you're spending several thousand pounds with a private seller.
As ever, if the sale doesn't "feel" right, there are plenty more cars for sale elsewhere.
Last edited by: Dave_TDCi on Mon 27 Feb 12 at 15:21
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>> Do you really care about the third party or do you not just want your property back?
I would get the money for replacement car from insurance. In fact, if my car is stolen, I don't want to see it. A stolen then recovered vehicle may raise flags to potential buyers when trying to sell it later. So, I'd get rid of it as soon as possible.
>> check comes back clean, wouldn't you be reimbursed under the HPI warranty if it turned out to belong to a loan shark?
I also thought in same line, unless there is a small print in HPI for any loopholes.
A similar incident was reported in BBC Watchdog/Rogue Trader earlier. Some legal expert stated that associated laws were not changed since mid 1850s or so.
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I think more than ever one should appraise the seller as much as the car in private sales.
If it waddles and quacks etc.
I should hire SWM out to our members here, she can sniff a swindler at a thousand paces, do other SWM's have similar radar?
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I am looking to replace my old Mondeo.
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There is just a chance I might be able to find you a nice MB E class, not too far away!
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HPI checks and the like won't find this because the transaction is not directly linked to the vehicle, and there is no central record of a car's owner, only its 'registered keeper'.
Having taken his 'logbook loan', the keeper of the car is selling something he doesn't own.
I can't think of a foolproof way of not buying such a car from a private seller.
Probably best to use a bona fide motor dealer, even if it costs an extra few quid.
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>>I can't think of a foolproof way of not buying such a car from a private seller.
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That was exactly my thoughts
>>Probably best to use a bona fide motor dealer, even if it costs an extra few quid.
I have only ever bought privately once, all others being from a trusted source.
I exect I will stick with a dealer.
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My thoughts too. If it is a banger (i.e. sub £1000 car) then I won't mind buying from a private seller.
But for an expensive car, I'd buy from dealer.
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>>
>> Probably best to use a bona fide motor dealer, even if it costs an extra
>> few quid.
>>
Hoping the dealer doesn't go into administration between one placing a deposit and collecting the car - OK less likely than this scam but can happen, a couple of long established dealerships have shut up shop overnight round my way in the last year.
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>> Hoping the dealer doesn't go into administration between one placing a deposit and collecting
Deposit by credit card preferably, balance by debit card when you collect car.
Was involved in collecting cars from folded dealerships in the last downturn, heartbreaking seeing bewildered people turn up having put large often cash deposits down sometimes only the previous day, all lost.
You can't tell me that someone didn't know it was all over but still took hard earned money from ordinary people as deposits...a pox on them and all shysters.
We knew the day before in some cases what we would be doing.
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>> There is just a chance I might be able to find you a nice MB E class, not too far away!
>>
That is a bit tooooo big a jump :-)
Especially as my old bus appears to be worth a couple of tanks full of Petrol :-(
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Should've bought an estate Henry. Keep their value better too y'know. I'll..er...
:-)
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>> www.hpicheck.com/what_check.html
>>
>>
I had a letter from them today. It was asking me to confirm the mileage I gave them two years ago when I sold the Focus. I wonder if they have recently received a conflicting figure?
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>> www.hpicheck.com/what_check.html
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>> Isn't that what this is for?
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As iffy says.
"HPI checks and the like won't find this because the transaction is not directly linked to the vehicle, and there is no central record of a car's owner, only its 'registered keeper'. "
The transaction is another type of payday loan and I suspect protects the cash supplier rather well and little else.
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I have just watched the full item.
As expected the borrowers would not qualify for normal loans.
It was stated that 30,000 such logbook loans were taken out last year with a typical interest rate of 350% plus of course £12 per phone call all added to that bill.
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Log book loans are a real headache now, even for car dealers. I have come across a few dealers that have incurred the same problem.
The problem is that the loan company informing the HPI register is a voluntary code not cast in iron.
I would say anyone buying any car now has to be very careful ! & its more common than you think ! even for £1500 bangers
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How can a "log book loan" lender gain good title to the car?
I'd genuinely like to know.
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>> How can a "log book loan" lender gain good title to the car?
>> I'd genuinely like to know.
The mechanism is explained in this Govt Consultation form 2009/10:
tinyurl.com/783l5wm
Basically the vehicle is subject to a 'bill of sale' in support of the loan. Bills of sale are covered by victorian legisaltion and provided they're registered wit the High Court there seems little protection for the consumer.
The previous Govt would have banned the process.
The present administration has decided to do nothing but Introduce a voluntary code of practice and other non-statutory requirements.
Go Figure.
Last edited by: Bromptonaut on Tue 28 Feb 12 at 13:14
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>> Basically the vehicle is subject to a 'bill of sale' in support of the loan.
>> Bills of sale are covered by victorian legisaltion and provided they're registered wit the High
>> Court there seems little protection for the consumer.
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I still don't get this Brompton.
How come a bill of sale is good enough for this, but when mr average joe puts a 20% cash deposit down on a car and the company goes into receivership 10 miuntes later, despite having a bill of sale he won't even get his deposit back.
Both sellers are in effect bankrupt, the bod using a loan shark if he isn't up the creek will be within weeks.
Sounds like the usual one rule for those with money and another for those without.
This country's business practices need sorting out badly.
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>> I still don't get this Brompton.
Can only really refer you to the original consultation GB.
Seems to be covered by some Act from the mid nineteenth century whereby provided the contract is drawn in particular terms and registered with High Court then a good 'lien' on the car is created.
No properly advised individual or business would enter into a contrac on that basis. But folks desperate for cash are rarely properly advised.
Why Govt feels it can rely on an industry run by sharks and shysters to produce a fair and transparent code of conduct or a system to show registration of these loans on HPI is beyond me.
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>> Bills of sale are covered by victorian legisaltion and provided they're registered wit the High
>> Court there seems little protection for the consumer.
>> The previous Govt would have banned the process.
Oh Brompton. What twaddle.
1. You tell us: The legislation has been in existence for over 100 years.
2. We know: The previous Govt was in power for a long and painful decade.
3. So explain to me: If they "would have" banned the process, why didn't they?
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>> Oh Brompton. What twaddle.
>>
>> 1. You tell us: The legislation has been in existence for over 100 years.
>> 2. We know: The previous Govt was in power for a long and painful decade.
>> 3. So explain to me: If they "would have" banned the process, why didn't they?
Read the consultation MM and the BIS response published in Jan 2011. Prohibition by the previous administration is not my wishful thinking, it's the stated preferred option
Could something have been done sooner?
Perhaps, but consultation says problem came to fore when log book lending took off after other loan/finance got tight post 2007.
Not the first or last instance of shady finance using a loophole in old law to make new money.
Last edited by: Bromptonaut on Tue 28 Feb 12 at 14:27
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I have read the condoc. And it really doesn't say they were going to do it, merely that it is "the preferred option". We all know that these two statements are by no means the same thing.
The problem with the condoc is that it is written in terms of the outrageous rates of interest charged, rather than impact on third parties. (An amusing extension is that presumably two different logbook lenders could both end up with bills of sale on the same car. Couldn't happen to a nicer crowd!)
They seem to be a great way of raising cash if you are sub-prime. The only tweak to the legislation would be to require registration of the loans. The condoc helpfully suggests that you could pawn your car instead - at which point you wouldn't be able to use it. Not sure how that benefits the consumer.
Does make a HPI check absolutely worthless though...
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>> Perhaps, but consultation says problem came to fore when log book lending took off after other loan/finance got tight post 2007.
That will explain why in 2008 and 2009 the previous administration did nothing then :-)
Seems you're trying to blame the current government but the last one could have done something too. Perhaps you have reasons other than this to be negative about the alliance trying to dig Britain out of the situation created by Brown and Blair?
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>> Seems you're trying to blame the current government but the last one could have done
>> something too. Perhaps you have reasons other than this to be negative about the alliance
>> trying to dig Britain out of the situation created by Brown and Blair?
It's the current government who have decided to adopt a Micawber approach of do nothing and hope the vultures promoting these loans cpme up with a code of conduct. To the extent they've done that rather than grasp the nettle I blame them.
Could the previous Admin have done something sooner? Perhaps, but OTOH they get justified stick for knee jerk legislation.
As to reasons to be negative about the coalition I'm quite comfortable as the site's token pinko albeit only in the soft left Croslandite mode.
Last edited by: Bromptonaut on Tue 28 Feb 12 at 20:42
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...I'm quite comfortable as the site's token pinko...
I thought you were happily married.
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>> How can a "log book loan" lender gain good title to the car?
>> I'd genuinely like to know.
>>
By sending two large blokes called "Crusher" and "Evil Mike" around to collect it?
We're not talking about reputable organisations here.
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Why is a log book loan a problem?, unless the holder of the reg doc (loan shark) registers themselves as a new owner at DVLA, which would come up on a search then holding a copy of a registration doc means nothing.
Thats how i'd view it as a reasonable man anyway.
edit..see you're thinking along the same lines Roger.
Last edited by: gordonbennet on Tue 28 Feb 12 at 12:47
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There is of course a simple problem.. No voluntary registration means no right of redress for lender..
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Doesn't the V5C show registered keeper and not necessarily the owner? I still don't see how someone holding the V5C can hold claim - they must register their claim somewhere/somehow.
Last edited by: rtj70 on Tue 28 Feb 12 at 15:13
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>> I still don't see how someone holding the V5C can hold claim - they must register their claim somewhere/somehow.
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The program showed a document signed by the guy who sold the car.
The doc appeared to say he had signed over ownership over to the log book loan company
( I assume pending the loan being repaid ).
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But ownership has nothing to do with the V5C does it - that's the registered keeper. Which normally is one and the same.
The issue here is the signed document showing ownership isn't it and not the V5C. So it's not a V5C issue per se. The question is how could one now that legal ownership has been passed on unless it is registered - and these loan sharks aren't likely to bother logging this.
We'd have the same problem with houses if it were not for the land registry. Maybe the V5C should after all show legal owner as well as or instead of registered keeper?
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The problem here is that its extremely unlikely to affect well heeled MP's or their mates, and if it did a visit to the sharks premises by a senior copper with umpteen pips on his shoulder would soon sort it.
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V5c showing legal owner?
As it would go a long way to solve the problem - never happen...
Last edited by: Slidingpillar on Tue 28 Feb 12 at 17:38
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>> V5c showing legal owner?
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>> As it would go a long way to solve the problem - never happen...
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Especially as we switched from the V5.
I quote from the nice man's letter :-
" These certificates have been designed to comply with a European Directive to harmonise Vehicle Registration Certificates across the European Community."
Too true it will never happen :-(
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Raead the condoc! like what Brompton says.
The mechanism is explained in this Govt Consultation form 2009/10:
tinyurl.com/783l5wm
It is registered, but at the court, not at Swansea. And to find out if there is such a bill registered you have to give two weeks' notice, and you have to pay for it.
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The swedish reg document states quite clearly who the owner and the keeper of the vehicle is. Any loans or debts against the vehicle are also clearly written on the document.
And by logging onto the equivilent of the DVLA site (or calling them), anyone has access to the history, in terms of owners, loans, lease companies, sorn'd or not, last mot date, how much to tax it, tow limits, tyre sizes, tow bar fitted, etc. Quite sensible really - one easily accessed place for all the info about a car.
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Sounds like the system we should have! I have never fully understood why you'd record registered keeper but not owner. Often they are the same but that is not a given.
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Another scam re private car buying. - movilogo
