Car Finance paid in full now want a "Trace Fee"

norbet

My partner purchased a car in Sept 2005 took out finance over 3 years and has paid each monthly payment on time and has completed the loan term - there are no outstanding payments due in respect of the loan.
When she took out the finance she was at her mothers address and after moving in with me last year rang them to advise that she'd moved house (note didn't advise in writing and she admits she didn't notify them immediately). We live close to her mothers and she collects post from her mothers regularly so there was no chance that she'd miss any correspondence.
This week she's received a letter from the finance company at our address (not her mothers) stating the following:
"This notice is served under section 86E of the Consumer Credit Act 1974 and provides notice of default sums (other than interest) now payable by you"
It then goes on to provide a summary of the default sum (£70) "IN HOUSE TRACE FEE" and date sum became due (3/11/2009)

Now clearly distressed, she called the finance company (GMAC) who said she'd moved address without notifying them and that the trace fee is charged for finding out her new address. She asked why they needed to trace her as she'd rang previously (prior to the end of the loan term as she also asked for a settlement quote) no payments have been missed, the loan term was completed and paid in full nearly 3 months ago and no correspondence has been received at her mums address.
They refuse to back down and say she has to pay £70.
Now I've asked her to find the original loan/finance agreement so we can check on what terms/conditions were stated, but both of us feel this demand for payment is unfair. She's called them in the past and advised of a change of address, albeit not in writing and she's given them no real reason for them to have to contact her (other than to advise that the loan has been repaid in full).
So the question is, where does she stand on this? I suspect that if the original agreement she signed stated that a change of address must be notified in writing then she will have to pay, but surely when she rang and spoke to them they would have told her this?
Is a £70 charge excessive or does it sound about right?
I looked up section 86E of the CCA 1974, but to be honest it really doesn't answer my question - just that the debtor must give notice when a default sum becomes payable (which is seemingly what the letter is).
Given that the loan agreement is now ended, is she still bound by the terms of it?
Any advice on how to proceed would be most welcome.

laney85

If they are claiming that she never informed them of the moove, and her mother has kept all mail and not put return to sender, how do they know she moved ?

norbet

laney85 wrote: »

If they are claiming that she never informed them of the moove, and her mother has kept all mail and not put return to sender, how do they know she moved ?

My thoughts entirely her mother wouldn't return any of her post as undelivered. Like I said, she's called them by phone and advised of the changed of address, perhaps that's how they know, but they may be applying the terms to the letter in that she's not notified them in writing. I need to check the original agreement she's signed up to, she's going to look for it later.
She's changed address at her bank (who the direct debit was with) perhaps that was a way for them to know of the address change?
We got married in September (just before the loan term ended and the final payment was taken - perhaps that could have something to do with it?

standupguy

The agreement ended in September 2008 from what you say.

It appears at some stage a letter must have been sent and returned unknown at which point they put out a trace and it is only now , well after the agreement has ended that they are chasing the amount.

It is likely that a search made around that time will have revealed her new address and the cost of this is minimal so a charge of £70 can be deemed to be excessive and unfair.

Also, as the account was never in arrears the charge could be deemed unfair.

She should phone the company and say that she wishes to speak to the Legal and Compliance manager and make a formal complaint about being treated unfairly and that she is prepared to take the matter to the Financial Ombudsman service if her complaint is not resolved satisfactorily within the timeframes laid down by the FSA guidelines for treating customers fairly.

All jargon, I know but if she says this word for word then they know they have to treat this as a serious complaint.

I suspect the outcome will be the write off of this charge and the matter closed.

norbet

Thanks standupguy - I should point out an error in my OP - it was a 4 year term, so ended in September 2009.
Not sure if that makes much difference or not, but as you say, the account has never been in arrears and she has contacted them by phone to advise of a change of address.
I'll advise her to take your advice and we'll see how that pans out. I'll post back as & when.

PNPSUKNET

if the agreement was kept to and never late and fully completed put a complaint in writting never phone.

jonesMUFCforever

Some companies only accept changes in address in writing - though if the loan was repaid on time this should not be an issue.
I would pay this 'under protest' to protect your credit files and then complain all the way to the financial ombudsman if need be.
Only a very stupid financial institution would quibble over a £70 fee when it will cost them £400 for a FO complaint.

norbet

Thanks for the advice folks - I'll let you know how we get on with it.