Car Finance Fraud Lawyer

We are a specialist firm with an enviable track record in dealing with disputes and cases involving all aspects of automotive law and car sales fraud both in the UK and internationally.

We regularly advise journalists and TV companies and deal with claims involving motor finance, finance fraud and clearance fraud.

Car Finance Clearance Fraud

Car clearance fraud has naturally increased as a result of the increase in the number of cars bought on finance and the rise in sale or return and sale on consignment.

When a customer already has a car on finance and wishes to replace it by buying another one by way of finance, the process is traditionally dealt with by the car dealer in one of two ways; either the dealer will buy the part exchange by settling the outstanding finance and paying any excess to the customer,  or the outstanding finance will be ‘contra settled’, i.e. the total new amount financed (generally the invoice balance) less the settlement on the part exchange.

The car dealer informs the customer the outstanding finance on the part exchange will be settled, but that it may take a day or two to show on their account. The trusting customer hands over the car, the logbook and all the documents and takes delivery of their new car.

However, the unscrupulous car dealer or fraudster sells the part exchange, but then fails to pay of the finance.

The unsuspecting original customer often doesn’t find out about the part exchange finance not being paid off until the subsequent monthly finance instalment is debited from their account.

What Do I Do?

This presents the original customer with an awful choice; to inform the finance company, stop paying the finance and face being in breach of the finance agreement both by giving up possession of the car and non-payment; or continue to pay the finance instalments, allowing the dodgy car dealer to get away with it.

If the original customer takes the first option, the finance company will endeavour to repossess the Vehicle from the subsequent buyer, creating in effect a tug of war between the two customers, where ultimately one must lose.

The ensuing chaos leaves the car dealer free to perpetuate the fraud.

If a car dealer has failed to pay off your outstanding finance call the Car Lawyer.

The Car Dealer

Often the dodgy car dealer hides behind a limited company believing the company will be vicariously liable and shield them from personal liability; or so they think.

There are a number of cases which support company directors and employees being held personally liable for their illegal acts.

The Police

Fraud by representation is an offence under the Fraud Act 2006 and you should report clearance fraud to the Police. However, this may not help you with the immediate problems with the finance company and the financial pressure you are likely to be under.

Double Finance

There have been a number of recent cases where customers have bought a car on finance only to find out later the vehicle has already been financed and that finance remains outstanding.

Naturally, the process carried out by lenders should prevent these circumstances, but if you find yourself in this position you should obtain legal advice.