Credit Hire Car

manimag

I had a non fault accident 3 years ago and on notifying my Insurers, was offered a free hire car (I didn’t have Courtesy Car cover on my policy). I was told it was free and should the third party insurers not pay, Enterprise would take the loss. I hired a car from Enterprise on that basis. I have now received letters from solicitors for Enterprise requiring me to give them permission to take out legal proceedings in my name in order to try and recover the cost of the hire car. This will require me to provide in depth proof of my finances and the possibility of having to go to Court and be cross examined. I have now discovered that the free car hire was in fact under a Credit Hire Agreement which in small print states I agree to assisting Enterprise in recovering the hire charges. I was not told this either by my insurers or Enterprise. I was asked to sign an agreement on an i-pad with only the signature box visible and was not given a copy of the Hire Agreement. I believed it was a standard car Hire Agreement. I have reported my insurers to the Financial Ombudsman for misleading information and failure to disclose relevant facts and they are investigating.

As I am refusing to agree with legal proceedings being taken out in my name,  there is now the possibility of Enterprise suing me for the hires charges for a hire car which I was told was free! My research has revealed that there has been an increase in complaints about issues the same as my own. Had I known that my hire was a Credit Hire, I would have simply hired my own car.

I wanted to post this as a warning to others to only take on a Credit Hire car if you are unable to hire privately and to be aware of the possible repercussions.

DullGreyGuy

If you didn't have cover for a replacement vehicle on your insurance why did you think they were giving you one? Are you sure you remember those conversations from 3 years ago well?

Be it on iPad, paper or anything else you should read what you are being asked to sign, though millions dont. iPads have the ability to scroll so a quick swipe of the finger would have revealed what you were signing. 

Ultimately you have signed a credit hire agreement which requires you to assist them in recovering their outlay. Its really up to you now as to if you want to decide you dont want to do that and so just pay up on the hire (no point getting them to add court costs and interest to the bill) or do what you agreed to and support their recovery attempts. It is legally your loss as you were the one that was in the accident which is why the litigation will be in your name. 

Hopefully you already went through the complaints process and got a final response to your complaint before going to the FOS otherwise they will simply reject your complaint.

chrisw

Why would you refuse to assist them with legal proceedings to recover their money? When I've signed a hire agreement on an iPad, I've always received a copy by email as well.

ontheroad1970

It generally only gets expensive for you when you take the actions you are taking.  

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As we told you in your previous thread, you are responsible for the costs of the credit hire, so that recovery can be made from the third party, but Enterprise agree to write off any of the charge that can't be recovered from the third party following legal action, which you agreed to facilitate. (obviously without realising).

What it means is that you have to assist with the court case taken out in your name, and therefore pay nothing, or Enterprise will take you to court instead.

The problem is that the bill for the hire is huge, and the third party won't pay.

The norm is that various sabres are rattled, court papers served etc. and the third party insurer offers a reasonable rate for the hire, which Enterprise accept, call off the legal action, and write off the difference.

So you can either assist Enterprise now with a case against the third party, defend yourself against Enterprise in a claim for the same money, or offer Enterprise the reasonable hire costs and hope they accept, leaving you out of pocket.

manimag

 

dullgreyguy and others -I remember exactly what I was told by my insurers, otherwise I would have just made my own arrangements for a car hire as I was able to pay for one. I was told by my insurers that I could have a free hire car and that Enterprise would take the hit if the hire costs couldn't be recovered. Why should I have disbelieved what they said? I assumed that my insurers had an agreement with Enterprise, the basis of which was Enterprise would get the bonus of extra business and accept a few losses on the way. It seemed a win win.

I should have been advised by my insurer that this was an option only if I wasn’t in a financial position to fund a car hire myself. I initially contacted my insurers via their CEO to ask why I wasn’t told that it was a Credit Hire Agreement and the possible repercussions. The letter in reply didn’t address this, just confirmed the position I am now in. Hence reporting them to the Financial Ombudsman. The Financial Ombudsman agrees I was misled, hence they have accepted it as a case to be investigated.

The FO have investigated similar cases to mine and the insurers have been made to pay compensation to their insured for misleading them. It is not my loss as I haven't lost anything but it has to be in my name as the Credit Hire Agreement is in my name.  The Agreement only says I have to assist them in the recovery, not that I could end up in Court.

Yes, I should have insisted on reading the Credit Hire Agreement but they were very busy, I wasn't handed the i-pod and in any event having never heard of a Credit Hire until a few days ago, I assumed it was a standard Car Hire Agreement. I expected to get a copy of the Agreement but wasn't sent one. 

I don't want to risk having to go to Court, having my financial affairs discussed and being cross examined by Enterprise's solicitors. If Enterprise want to claim the hire costs from me, just shy of £700, so be it and I will then pursue an uninsured loss claim from the TP's insurers via my Legal Protection extension to my motor policy which is what I would have done had it been fully explained to me.

Incidentally, there is no doubt as who was responsible for the accident as my car was parked in a parking bay and the TP insurer's have settled with my insurers including my excess. The matter is further complicated by the fact that the person responsible for the accident performed a manoeuvre forcing the car that hit mine, to serve to avoid it. Enterprise’s claim is against the person who hit me, whose insurers, presumably, will then seek to recover their outlay from the car that actually caused the accident. I imagine that the TP insurers are querying the hire costs, which I have just discovered are higher under a Credit Hire than a private Hire but the solicitors won’t tell me what action they have already taken to recover the hire charges nor why the TP’s insurers are refusing to pay.

I only posted this comment to warn others that if they are offered a free car by their insurers, it will be a Credit Hire and what that entails, so no-one else makes the same mistake as me. 

rigolith

You might possibly be able to make a "red hand rule" argument in your defense if sued, but there really is no point not cooperating with them.

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manimag said:

 <snip>

 I was told by my insurers that I could have a free hire car and that Enterprise would take the hit if the hire costs couldn't be recovered. Why should I have disbelieved what they said?

<snip>

You shouldn't, because it is true, they will take the hit on anything they don't get back when all avenues of recovery, including legal action, have been exhausted.

manimag said:

<snip>

I don't want to risk having to go to Court, having my financial affairs discussed and being cross examined by Enterprise's solicitors. If Enterprise want to claim the hire costs from me, just shy of £700, so be it and I will then pursue an uninsured loss claim from the TP's insurers via my Legal Protection extension to my motor policy which is what I would have done had it been fully explained to me.

<snip>

You do realise that you would still have to go to court and subject yourself to the exact same discussion and cross examination as the one you currently don't want? The claim would still have to be in your name as it is you that "lost" the money.

Enterprise are already pursuing your uninsured loses. As part of that they may have to prove that they are a mitigated uninsured loss, which is what the court process is about- and it is unlikely to actually get to court anyway.

If you don't want to end up out of pocket you are going to be involved in a court process, so you might as well co-operate with this one as the next. (Plus, your Legal protection won't help unless there is a reasonable chance of success, and you refusing to co-operate with a previous court process for the same claim would be a Red Flag)

manimag

As I don't want to the stress of going to Court, I will just have to pay it. If my Legal Protection cover, won't take it on, then I will apply directly to the TP insurers for reimbursement, something that I am capable of doing. If they won't cooperate then I will just write it off. Interesting that some of you disagree with the Financial Ombudsman who agree that I was misled!
For the record, I am 73 and suffer with anxiety so going to Court is not something I could cope with and already I have been made extremely anxious by all this and the threats from Enterprise's solicitors.
In any event, I didn't post this for advice, just to warn others who, like me, don't know what a Credit Hire Agreement is and what they are signing up to.

DullGreyGuy

manimag said:

 

dullgreyguy and others -I remember exactly what I was told by my insurers, otherwise I would have just made my own arrangements for a car hire as I was able to pay for one. I was told by my insurers that I could have a free hire car and that Enterprise would take the hit if the hire costs couldn't be recovered. Why should I have disbelieved what they said? I assumed that my insurers had an agreement with Enterprise, the basis of which was Enterprise would get the bonus of extra business and accept a few losses on the way. It seemed a win win.

But that's how credit hire works... if they cannot recover their outlay Enterprise take the hit with the two exceptions of if you dont support them recovering their outlay or there was fraud involved. 

That is the arrangement Enterprise is offering, you are just missing the referral fee Enterprise pay your insurers for the lead. 

manimag said:
The Financial Ombudsman agrees I was misled, hence they have accepted it as a case to be investigated.

The FO have investigated similar cases to mine and the insurers have been made to pay compensation to their insured for misleading them. It is not my loss as I haven't lost anything but it has to be in my name as the Credit Hire Agreement is in my name.  The Agreement only says I have to assist them in the recovery, not that I could end up in Court.

No, the FOS are obliged to investigate all cases that fall within their jurisdiction and so doesn't mean they think you were mislead. Of all insurance complaints escalated to it, the FOS only sides with the customer in 31% of cases, in some classes of business it can be as low as 7%.

 FOS at times does rule credit hire referrals were not done appropriately, more normally when it involved credit repairs too which went wrong. Even if they do rule against the referral its normally £50 comp

Going to court is assisting them in the recovery... did it carve out attending court or did you not question what assisting them could mean?

manimag said:

I don't want to risk having to go to Court, having my financial affairs discussed and being cross examined by Enterprise's solicitors. If Enterprise want to claim the hire costs from me, just shy of £700, so be it and I will then pursue an uninsured loss claim from the TP's insurers via my Legal Protection extension to my motor policy which is what I would have done had it been fully explained to me.

And so you will go to court with the LE cover but not with Enterprise? The whole point of Credit Hire is to avoid your need to be out of pocket whilst the process goes ahead but you can repay them and then take it on as a regular loss. Note that if you mess about and get to the point of Enterprise having to add debt recovery charges to the bill those will not be recoverable from the third party. 

manimag

It won't come to that as I will repay Enterprise well before it gets to that stage. If I end up seeking recovery myself, I will negotiate an acceptable settlement given that there is no dispute as to who was to blame. Yes I will probably end up out of pocket to some extent but rather that than a breakdown in my health. None of this would have happened had I just hired my own hire car. Hence wanting to point out to others the pitfalls of Credit Hire. As  for the FO, they take full details before deciding whether there is a case to answer, Several examples on their site had exactly the same circumstances as me and their insurers were ordered to pay compensation of £350. I didn't report my insurers for compensation but to help prevent insurers generally from not fully explaining what the free car actually means.