Motor trader beware!

We have seen two cases this last week, involving the same lender, where a motor trader purchased a vehicle after a clear HPI search to discover many months later that the lender has now registered its interest under a hire purchase agreement late - in one case almost a year after the HP Agreement was entered into and many months after purchase by the wholly innocent motor trader.
Under section 27 (6) (a) of the Hire Purchase Act 1964 '...where the debtor disposes of the motor vehicle to a trade or finance purchaser, nothing in this section shall exonerate…that trade or finance purchaser...from any liability (whether criminal of civil) to which he would be subject apart from this section’.

On the face of it the HPI reports in these particular cases do not appear to be worth the paper they are written upon given the lenders failure to update the records!
What can be done?
In the immortal words of Paul Daniels 'not a lot' it would seem short of being fortunate enough to buy the vehicle from an innocent private purchaser who is able to pass on good clear title to the motor trader under the 1964 Act.
If lenders by neglect or design, fail to register their interest in a timely fashion or at all, then this would seem to make a mockery of the registration process and leave the motor trader vulnerable on every purchase from a private seller who may knowingly be selling a vehicle, which is subject to outstanding finance.
Should any of our readers have any similar experiences then please do let us know and if there is evidence of lenders employing such practices then there may be scope for raising issue of the Financial Conduct Authority (FCA) in the first instance.

Authors: Howard Tilney

Published: 21 Nov 2014


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(cAse SeNSItivE!)

Howard Tilney - Lawgistics (27/11/2014)
Arun Ltd - Extraordinary tale. Shocking infact!
Howard Tilney - Lawgistics (27/11/2014)
Graham - Since they are on going cases I am unable to say for legal reasons. Very good advice Graham. You certainly know your Dickens Sir!
Howard Tilney - Lawgistics (27/11/2014)
Motor Smart - Indeed it would but not in the two HPI cases that have crossed my path.
Howard Tilney - Lawgistics (27/11/2014)
lastyboy - These are ongoing cases and cannot be named for legal reasons.
Arun Limited (27/11/2014)
We bought a car from a Trader, it was HPI clear and then we traded it on to a Dealer who retailed it. It became apparent that Lombard had actually previously removed the car from HPI in order to let the broke owner dispose of it and then put it on HPI a year later when it had changed hands hoping to catch a new keeper for the balance of finance. Lombard sued the final dealer and due to massive legal costs, the three Dealers who had owned the car went thirds - Lombard accepted £35000 as an out of Court settlement. SHARP PRACTICE LOMBARD! Needless to say we all now have insurance for wrongful conversion!
lastyboy (27/11/2014)
Why is the lender not named?
Motor Smart (27/11/2014)
Surely the £10,000 liability waiver on Experian would cover this case. Is this not the same as with HPI?
Anchor Vans claim wronful conversion TWICE - GrahamAnchor (27/11/2014)
We have been caught twice.Once by Santander and once with a theft not registered. We have always bought wrongful conversion insurance as part of our Motor Trade Policy - with claims of £24,000 over 25 years this has proved to be a good investment.The premium is a few hundred pounds per year. Clearly Dickens was right in rehashing the following well know phrase from the 1600's.for his book Oliver Twist. "If the law supposes that," said Mr. Bumble, squeezing his hat emphatically in both hands, "the law is a ass - a idiot". Tell me something I didn't know.

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