Finance Lawyer

Consumer Credit Lawyer

Finance agreements come in a variety of forms but ultimately can be categorised as either a regulated or an unregulated agreement. Understanding how regulated finance works is essential, as it determines the level of legal protection and rights available to consumers. How to approach legal problems involving credit depends on which of these is applicable.

A regulated agreement is one that is regulated by the Consumer Credit Act 1974 and is typically used in consumer transactions, as opposed to an unregulated agreement, which is not. However, there are exceptions, such as high-net-worth individuals, who can often obtain better terms on supercars, for example, under an unregulated agreement rather than a regulated one.

The Consumer Credit Act bestows the rights you would have had, if you for example bought a car from a dealer, to the finance company. This is the same as when you buy goods on your credit card. A consumer finance and consumer rights lawyer can help you navigate any confusion or difficulty you may encounter. At Stormcatcher, our experienced team can help.

Contract Hire and Business Lease

These are not contracts for the sale of goods, as there is no option to buy the vehicle and title does not transfer upon payment of the final payment as it does in Hire Purchase. Instead, the customer hires the vehicle and it is, therefore, more akin in the eyes of the law, to the ‘supply of services’. Contract hire and business leases are unregulated finance agreements and often contain non-reliance and limitation of liability clauses, which can make matters more complex.

Hire Purchase Act

The Hire Purchase Act 1964 is one that is commonly cited to protect an innocent purchaser of a motor vehicle which, unbeknown to them, is the subject of an outstanding hire-purchase agreement, or conditional sale agreement. This hire purchase law however is far from clear and straightforward; it needs close analysis of the status of the seller, whether the buyer had notice of the finance agreement and how much was paid for the vehicle.

Chattel Mortgage

A chattel mortgage is, as the name suggests, security-based lending where the borrower ‘mortgages’, i.e. obtains a loan from the lender taken over tangible movable property, known as a chattel.

This form of lending and borrowing is not uncommon and uses assets such as valuable vehicles, artwork, superyachts, ships and aircraft.

However, chattel mortgages have in more recent times found favour in the form of ‘logbook loans’ by a business or company to raise credit against its plant or equipment, including motorhomes. Although it has been widely regarded that a chattel mortgage is unsuitable in circumstances where the goods or asset is replaced regularly, such as a motor dealer or traders’ stock in trade, these circumstances do arise and need careful analysis.

Financial Ombudsman Complaint

For complaints about the quality or suitability of a vehicle bought under a regulated finance agreement, customers have the right to escalate their complaint to the Financial Ombudsman Service. However, the financial ombudsman has no jurisdiction to deal with unregulated agreements and can exclude regulated agreements in circumstances where it is believed that the vehicle was acquired wholly or mainly for business purposes.

Dealing with the Financial ombudsman complaint process can be long and arduous, and you may benefit from expert help or a consultation.