Unexpected PCP Car Finance Refund

I purchased a new car on a 3 year PCP deal in 2011 through Porsche Financial Services (PFS) and returned the car at the end of the agreement early 2014.

Yesterday I got a letter in the post from PFS apologising that they had not informed me during the monthly statements that I had a right to cancel the agreement at any time. Consequently, they are sending through a hefty check to refund all of the interest paid under the PCP agreement.

What law have they fallen foul of here? We also have a Toyota on a PCP agreement (and have had in the past) and I see no mention of voluntary termination on the paperwork for those statements either.. Is this PFS specific, or is this another PPI style situation brewing?

Comments

  • fermi
    fermi Posts: 40,542 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Rampant Recycler
    edited 31 December 2014 at 4:34PM
    Many lenders agreed with the OFT (now FCA) earlier this year to issue refunds like this.

    Very common at the moment.

    The law breached was the Consumer Credit Act(s) and subordinate regulation's contract and post contract information requirements.

    Companies who did not provide certain statutory information and notices were legally not entitled to charge interest etc while they were in breach of those laws.

    So now their breaking of the rules has come to light they are obliged to issue these refunds.
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  • ~Brock~
    ~Brock~ Posts: 1,714 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    The required format and content of statements can be found here:

    http://www.legislation.gov.uk/uksi/2007/1167/pdfs/uksi_20071167_en.pdf
  • eddr
    eddr Posts: 8 Forumite
    Part of the Furniture First Post Combo Breaker
    How could one figure out if the finance company they are using also breached this?

    I have a car on VW PCP from 2012.
  • Voluntary Termination:

    The UK Consumer Credit Act gives you the right to return your vehicle after 50% of your total amount owed has been paid under your finance agreement. Once you return the car, you are no longer required to make the remaining payments.

    Normally, at the time the financing is arranged, the PCP buyer is made aware of his/her option to return the vehicle at “maturity” (50%).

    Check your contract, though. There may be fees or exceptions involved. If the car is damaged or misused, there will probably be some extra hoops to jump through.

    Also, you can check the verbiage on your monthly statements, to see if they are informing you of your rights under the Consumer Credit Act. If you don't see them listing your rights under the Act, that could make you want to dig deeper.

    If you're happy with the car, it would be really nice to get those interest checks back, so happy looking!

    Source:

    file:///C:/Users/MyPC/Downloads/FITCH%20Driver%20UK%20Two%20New%20Issue%2025-09-2014.pdf
  • How far can you go back with this? My husband had a pcp agreement from 2012, paid off in 2014. Also another one from 2007.

    I currently have one that I took out in 2013.

    Don't have any statements but should I contact said companies and ask for copies of statements to see if they say what they should.

    Thanks
  • eddr
    eddr Posts: 8 Forumite
    Part of the Furniture First Post Combo Breaker
    MarkSimms wrote: »
    Voluntary Termination:

    The UK Consumer Credit Act gives you the right to return your vehicle after 50% of your total amount owed has been paid under your finance agreement. Once you return the car, you are no longer required to make the remaining payments.

    Normally, at the time the financing is arranged, the PCP buyer is made aware of his/her option to return the vehicle at “maturity” (50%).

    Check your contract, though. There may be fees or exceptions involved. If the car is damaged or misused, there will probably be some extra hoops to jump through.

    Also, you can check the verbiage on your monthly statements, to see if they are informing you of your rights under the Consumer Credit Act. If you don't see them listing your rights under the Act, that could make you want to dig deeper.

    If you're happy with the car, it would be really nice to get those interest checks back, so happy looking!

    Source:

    file:///C:/Users/MyPC/Downloads/FITCH%20Driver%20UK%20Two%20New%20Issue%2025-09-2014.pdf

    I have never received a monthly statement from VW. I think possibly I received a single short annual statement.

    Does this mean that I'm entitled to a refund of my interest if they have not sent me monthly statements?!?
  • flashg67
    flashg67 Posts: 4,117 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    eddr wrote: »
    I have never received a monthly statement from VW. I think possibly I received a single short annual statement.

    Does this mean that I'm entitled to a refund of my interest if they have not sent me monthly statements?!?

    AFAIK, only an annual statement is required.
  • fermi
    fermi Posts: 40,542 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Rampant Recycler
    For fixed sum credit agreements the law says that they must give period statements, where the period between them must not exceed one year. So monthly ones not required.
    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
  • eddr
    eddr Posts: 8 Forumite
    Part of the Furniture First Post Combo Breaker
    fermi wrote: »
    For fixed sum credit agreements the law says that they must give period statements, where the period between them must not exceed one year. So monthly ones not required.

    OK, I see. Thanks. I will see if I can dig out the statement and see exactly what it says. Perhaps they forgot to mention VT on the statement.

    Or would it be enough to mention VT on the initial agreement and then no longer mention it on any periodic statements?
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