PCP (or HP, both on documents!) documents not complete

berarde

 My daughter has autism and ADHD (medically diagnosed) and is vulnerable in all aspects of life. She also has had a hand and neck operation and is finding a manual difficult. she has contacted the finance company about affordability and the possibility of changing to automatic but they are not offering any help.

  She took out a finance agreement for a car in August 2023 (so post-2021)  with Moto Novo finance. She  could not afford it and is seriously  struggling.  I have looked at the documents which she received.

I think the most significant irregularity is that The "demands and needs" says she is buying a pcp. The statement of account  on date of purchase is for a Hire Purchase Agreement. So we don't know if it is a PCP or HP. In fact I don't see how they have a leg to stand on when they say it is a PCP in one document and HP on another. 

 1. She has not been given a purchase receipt for the car. 

2  Fees for the finance product.: "receive a commission from the lenders , either a fixed fee or fixed %" but without giving the actual  amount on any documentation.

It says that she has a right to ask for disclosure the amount of commission, but that she needs to ask. 

 
3 Then Insurance documents for Gap and Driveway insurance:

Similar wording re. commission but  no information of actual amount anywhere and neither a  statement that the onus is on her to ask.

4 Duty of Care document warranty: The document is not signed by her and no signature of an Authorised person either. 

Inadequate affordability checks:  She was not asked for proof of salary or income nor whether or not she received Universal credit nor any of her expenses, liabilities or her circumstances: she is a single mother with an autistic child. These would have shown that payments were not affordable.

5 Demands and needs questionnaire: this is unsigned by my daughter and unsigned by an Authorised signature. "To comply with FCA You will receive the original of this document once completed and signed "with a copy held at the dealership". she has not received this.

On account of Autism and ADHD she would have answered questions without understanding them Eg "options in relation to the final payment" would not make sense. Nor such things as "RTI Gap"

6 The Moto Finace information page: Termination. "Details were set out in your credit agreement" .We have no copy of the credit agreement. There is an email "Accepted agreement summary" which just details the payments and a click button, but we can't find a copy of a full legal agreement and the link in the email says error, so I can't check on this.

The credit on HP agreement is £14040.83, duration 49 months at 9.56 pa,  Interest £5,466.70, monthly payments £284.15 and she has made 14 payments.

She has just sent me a statement for PCP payments for October, next payment November. this gives the interest as 9.6% and APR 13.9%. The HP agreement is 9.56% without the APR mentioned

It is awful that the salesman has taken advantage of someone vulnerable and at risk of predatory people and we are taking out a Power of Attorney

I should add that I've done pricing up of cars of similar age and mileage. and the car is  close to the maximum whack

I hope that there enough inconsistencies to render the agreement void... here's hoping

DullGreyGuy

PCP legally speaking is HP with a balloon payment but as HP with a balloon payment is a bit of a mouthful most prefer the PCP terminology. It's common for documents to use the terms interchangeably subject to the formality of the document. 

Ignoring last weeks Court of Appeal decision, which is going to be challenged. They do need to make it clear that commissions are being received but certainly for insurance, and I would expect finance, that it can be left to be on request for the actual amount. In the case of insurance it can be complex as it may include a profit share etc and so the actual amount may not be known for many years. 

The dealership will be a non-advised sale so if the demands and needs document is in relation to the insurance it will be a fixed document and not normally signed by anyone. It's a very different beast in an advised sale. 

dunstonh

I think the most significant irregularity is that The "demands and needs" says she is buying a pcp. The statement of account  on date of purchase is for a Hire Purchase Agreement. So we don't know if it is a PCP or HP. In fact I don't see how they have a leg to stand on when they say it is a PCP in one document and HP on another. 

It's not an irregularity - so it's not an issue.

 1. She has not been given a purchase receipt for the car. 

Why would she need a receipt?    

2  Fees for the finance product.: "receive a commission from the lenders , either a fixed fee or fixed %" but without giving the actual  amount on any documentation.

It says that she has a right to ask for disclosure the amount of commission, but that she needs to ask. 

There has been no regulatory requirement for a commission disclosure.    Only the court case last week, which is being appealed, has said they should.  

3 Then Insurance documents for Gap and Driveway insurance:
Similar wording re. commission but  no information of actual amount anywhere and neither a  statement that the onus is on her to ask.

As per above.

4 Duty of Care document warranty: The document is not signed by her and no signature of an Authorised person either. 

Signatures are not required on many documents nowadays.  

Inadequate affordability checks:  She was not asked for proof of salary or income nor whether or not she received Universal credit nor any of her expenses, liabilities or her circumstances: she is a single mother with an autistic child. These would have shown that payments were not affordable.

You are assuming inadequate checks.  However, they would have done a credit check electronically that would consider affordability.

5 Demands and needs questionnaire: this is unsigned by my daughter and unsigned by an Authorised signature. "To comply with FCA You will receive the original of this document once completed and signed "with a copy held at the dealership". she has not received this.

signatures are not required.

6 The Moto Finace information page: Termination. "Details were set out in your credit agreement" .We have no copy of the credit agreement. There is an email "Accepted agreement summary" which just details the payments and a click button, but we can't find a copy of a full legal agreement and the link in the email says error, so I can't check on this.

you not being able to find it is not the same as it not being given.

It is awful that the salesman has taken advantage of someone vulnerable and at risk of predatory people and we are taking out a Power of Attorney

How would the dealer know unless it is obvious?   If it is obvious, then why haven't you taken out a POA earlier?

I hope that there enough inconsistencies to render the agreement void... here's hoping

I think you are grasping at straws.   Sorry.

Nasqueron

What income did your daughter tell the firm she was getting?

Nearlyold

There is no regulatory definition of a PCP. 

A PCP can be a modified version of a Fixed Sum Term Agreement (aka Personal Loan) or Hire Purchase or Conditional Sale.

The term PCP will not appear in the regulatory required official credit agreement, only the terms above may be used. 

The official paperwork your daughter received is correct in describing the loan as a Hire Purchase as that is what it is in regulatory terms.

berarde

Thank you. Looks hopeless, then.
It is difficult emotionally to do a POA as she is 39 and took the idea badly as she said it made her feel inadequate, incompetent and it was demeaning and an insult. 


For myself I would have thought a credit reference was only a measure  of the likelihood of default. rather than affiordability  I based my idea of an  affordability assessment from this  hippo site: 

You’ll also require proof of income within your paperwork to prepare for car finance. We’ll want to know your employment status, details of where you work, your job title and monthly income. Most lenders will require you to provide three months of payslips or bank statements as proof of income. This will show them that you’re able to afford your proposed monthly payments. Occasionally, a lender may call your employer to confirm that you work there. They won’t share any details about your application with your employer.

She tells me she wasn't asked to verbally give any income details


"She has just sent me a statement for PCP payments for October, next payment November. this gives the interest as 9.6% and APR 13.9%. The HP agreement is 9.56% without the APR mentioned." I did wonder about this discrepancy and I thought an APR was mandatory?

She has bought three cars before and been treated fairly and was able to afford the payments

I'm getting old as the idea that an agreement is made , a document drawn up and nobody needs to sign it seems odd as it leaves room  forconfusion and disagreement  We'll be signing our new wills!

~Brock~

I think the confusion is sourced in your understanding of what services credit reference agencies provide.  Nowadays it is far more than just a snapshot of outstanding credit commitments, CCJ's, defaults etc. 

Lenders are also provided with a detailed picture of affordability based upon the CRA access to customer's bank account turnover (both credit and debit).  Although not as detailed as a full open banking report, it is good enough to meet the expectations of the FCA.

It meets with the modern consumer expectation of quick hassle free decision making and is also less prone to the types of fraud where people offer up doctored or fraudulent paper based documentation.

The downside is that, because it is invisible and happens in the background, some people think that no checks have been undertaken because they were never asked for payslips or bank statements, leading to allegations of irresponsible lending.

I'm not saying the system is perfect, but it is modern day reality that works for millions of credit transactions every year.

DullGreyGuy

berarde said:

"She has just sent me a statement for PCP payments for October, next payment November. this gives the interest as 9.6% and APR 13.9%. The HP agreement is 9.56% without the APR mentioned." I did wonder about this discrepancy and I thought an APR was mandatory?

She has bought three cars before and been treated fairly and was able to afford the payments

I'm getting old as the idea that an agreement is made , a document drawn up and nobody needs to sign it seems odd as it leaves room  forconfusion and disagreement  We'll be signing our new wills!

APR is the total cost of borrowing £1,000 for 12 months, the intention, though if it works or not is another matter, is so you can decide if a finance offer with a £100 annual fee plus 6% interest is better or worse than a different finance offer of 9% interest with no fee. 

Given its purpose is for people to make informed choices between products I cannot see how its really relevant on statements etc when its a fixed rate for the duration of the loan? 

Current contract law is broadly as introduced in the Industrial Revolution, I'm sure you're not that old. I'm also sure you enter into several contracts a week without even discussing terms or being provided a paper copy of the terms let alone signing them when you do your weekly shop or get a coffee from a cafe etc. 

A contract is a very agreement to a will or deed because of the requirement for consideration. Deeds, like wills, have to be signed and witnessed because there is no consideration involved. The need for wills to be in writing, signed and two witnesses co-sign came about in the Wills Act  1837, so slightly earlier than modern contract law. Before that oral wills were acceptable as long as the witness to it was of good standing.