Because the seller is deliberately passing on something to which he has no title.
But what about if the new owner, who bought it in good faith, subsequently sells it, also in good faith, to a further person ?
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Good faith accounts for diddly-squat. The second, third, 17th and umpteenth seller don't have good title until the finance company discharge their lien over the goods.
Classic example is a car chopped-in at a dealer in p/ex against another car. The p/ex is on finance but the dealer doesn't bother to find out or forgets to settle the finance. The dealer sells the car on and the new purchaser is sat at home when they get a knock on the door from me, waving repossession papers.
Nothing they can do about it, but you can guarantee the garage will be down to the local branch with cleared funds first thing the next morning.
Same applies in private sales.
If the person holding the keys can show a receipt for a reasonable market value for the car and implying clear title, the courts may allow them to keep the car pending further investigation/legal action, but the finance companies can and usually do contest this, as the court is awarding their property to a party unrelated to the contract.
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Thanks, as I thought. Tut tut the AA. Do the ASA have authority over websites...?
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They're quoting a member of the public. ASA haven't got a lot of control over that, otherwise Quentin Wilson's dire ads for Optimax would have gone out the window a long time back.
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I haven't seen the TV ads for a very good reason... Wireless is the bangernomic version of Sky(!).
So a member of public who makes a silly mistake calculating his mpg on Optimax, and thinks he got 80mpg out of a tank of Optimax can be interviewed on telly to say 'I get 80mpg out of Optimax, use it'?
They're publishing his comments, and by inference they become hard fact.
Surely. It's not that I doubt your wisdom, ND.
Or am I missing something? It's seriously misleading. You don't run the risk of losing £4,500 if you buy a 1983 Panda for £50. So you don't need to spend an extra £40 on an AA check.
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They're publishing his comments, and by inference they become hard fact. Surely. It's not that I doubt your wisdom, ND.
Ah, but you misconstrue my remarks, young Mapmaker. Just because you got a higher score on the Volvo ad.....
The ads are on the radio (or wireless as you prefer). They feature such remarks as "Since filling my tank with Optimax my dress sense has improved"
All very bizarre.
There is a funny loophole in ASA guidance regarding customer testimonials. I'm sure someone with access to google will be along with something appropriate in a minute
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I'm sure someone with access to google will be along with something appropriate in a minute
Ah, here it is....
TESTIMONIALS AND ENDORSEMENTS
14.1 Marketers should hold signed and dated proof, including a contact address, for any testimonial they use. Unless they are genuine opinions taken from a published source, testimonials should be used only with the written permission of those giving them.
14.2 Testimonials should relate to the product being advertised.
14.3 Testimonials alone do not constitute substantiation and the opinions expressed in them must be supported, where necessary, with independent evidence of their accuracy. Any claims based on a testimonial must conform with the Code.
14.4 Fictitious testimonials should not be presented as though they are genuine.
14.5 Unless they are genuine statements taken from a published source, references to tests, trials, professional endorsements, research facilities and professional journals should be used only with the permission of those concerned.
14.6 Marketers should not refer in marketing communications to advice received from CAP or imply any endorsement by the ASA or CAP.
14.3 tends to suggest the AA might be on a sticky wicket, except I'm not sure that the rules apply to the web, as you suggested earlier.
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IF I say "No Dosh says that Optimax helps him dress better" - that statement is presumably acceptable because its true. I can't/shouldn't use that statement to mislead intentionally, but it doesn't matter that what you said was rubbish/wrong.
Hence the frequent use of the word "allegedly" as in "Alfa allegedly make sports cars with diesel engines".
As for the web, the same rules apply as anywhere else, Its just a darn sight more difficult to prove something or track down who was the author.
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Some very rusty contract law coming from the back of my brain is suggesting to me that if you are subsequent purchaser of a stolen grandfather clock (say) you don't actually have to return it when they catch up with you, but you might have to compensate the original owner? Anybody else remember this?
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So you either hand the car back or settle the finance. Often the former is the cheaper option.
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Ah, but there is (used to be) quite a difference between theft and conversion. Stealing a car is one thing. Conversion (legally having it but then either keeping it when you shouldn't or selling it) is quite a different thing.
For example, stealing a car (which you can't quite, but its much the same thing) wouldn't (didn't use to) apply when you made off with a rental car that you had ourself legally rented.
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'IF I say "No Dosh says that Optimax helps him dress better" - that statement is presumably acceptable because its true.'
Is it? Now this is getting silly! But not as silly as those Optimax ads sound. I see they're available to watch/listen to on the net, so I'll have a look sometime.
Tut, tut, the AA.
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I meant that my statement "No Dosh says...." is true, not whether or not what he says is true.
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ND,
Very interesting, exactly the situation I was in back in 1996. Bought S/H car from main dealer in NE with cash. One year later the car was stolen and not recovered. Insurance co sent round loss adjuster etc, no problems and were just about to make a very fair payout when they noted that the car had outstanding HP from the person who P/E the car into the garage.
Insurance Co paid out and took dealer to court (selling items for which they did not have title or something like that). Dealers are supposed to check this. Garage agreed to go to court but the Ins, Co won.
I was lucky that the Ins. Co took this view otherwise I would have had to chase this through court myself.
regards
Ian L.
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No Dosh, I refer you to section 27 of the Hire Purchase Act 1964, (as inserted by the Consumer Credit Act 1974). This provides that a private purchaser for value in good faith (and without notice of the finance)gets good title to a car even if there is unpaid HP or conditional sale charges. I ran this argument successfully for a client about 10 years ago. Obviously it would not work if the buyer had got an HPI search, as he would then not be without notice.
Haven't used this bit of law since, but do not think it has changed. Ready and willing to stand corrected though!
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It's one of those areas where the finance companies tend to shout loudest and the innocent victims rarely attempt to defend in court, instead pursuing the seller through Small Claims.
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Knew I'd seen something on this:
A fraudster obtained a car on Hire Purchase using a false identity, The vehicle was sold to an innocent purchaser. However, the finance company was entitled to recover the cost of the vehicle from the innocent purchaser.
Shogun Finance Ltd v Hudson
Court of Appeal 28 June 2001 (Times Law Report 4/7/01)
The innocent purchaser of a motor vehicle from a rogue who had obtained it fraudulently by signing a Hire-Purchase agreement with a forged signature, did not obtain good title to it. The Court of Appeal so held in a reserved judgment when dismissing the appeal of the defendant, Norman Hudson, against the decision of Mr Assistant Recorder D. E. B. Grant on January 13, 2000, in Leicester County Court giving judgment for the plaintiff creditor, Shogun Finance Ltd, for £18,374.52 in its claim for damages for conversion of a Mitsubishi Shogun SWB, which Mr Hudson had purchased from a rogue in June 1996.
The rogue using the name of Durlabh Patel, a real person, purchased the car from a dealer in Leicester, producing a genuine but stolen or unlawfully obtained licence in the name of Durlabh Patel. After Shogun Finance made a credit search which was acceptable and having accepted the forged signature on the form of the agreement, the dealer accepted a 10% deposit for the agreed price of £22,250 from the rogue, who subsequently sold the car to Mr Hudson, who purchased it in good faith for £17,000.
LJ Sedley, dissenting, said that it might seem remarkable that the law governing the consequences of a fraud as common as the present was still in doubt.
The effect of section 27 of the Hire Purchase Act 1964, as substituted by paragraph 22 of Schedule 4 to the Consumer Credit Act 1974, was that a person, who in good faith bought a car from someone who turned out only to have it on Hire Purchase, obtained a good title.
The law was reviewed by the Court of Appeal in Lewis v Averay ((1972) 1 QB 198, 205-207) but, in his Lordship's view, the state of the law was still unclear.
Full details of the judgment at www.car-crime.com/shogun_finance.htm
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'LJ Sedley, dissenting, said that it might seem remarkable that the law governing the consequences of a fraud as common as the present was still in doubt.'
Which begs the question: why does the V5 not record the existence of finance? The Land registry (for a couple of pounds online) will tell you if a house you are buying has a charge over it. Why won't/don't DVLA operate a similar system? I dare say there are more properties with charges over them in the UK (most people buy houses on mortgages) than there are cars with outstanding finance (lots of cars are owned outright or by copmanies). Whyever does it cost £40 to get this information from the AA?
Most items on HP which might be sold unlawfully are subsequently untraceable (you couldn't ever track down a TV, for instance), but cars are traceable thanks to DVLA.
ND. Why do you say that Optimax helps you dress better?
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ND. Why do you say that Optimax helps you dress better?
nutter.
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Shogun Finance -v- Hudson has now gone to the Lords, where the Lords upheld the original appeal.
The Court of Appeal judgement was on the basis that there was no contract, voidable or otherwise, with the alleged Mr Patel. This meant that the contract which was signed was void from the outset, and thus there was no title sold on that could be passed to the innocent purchaser.
Otherwise though, the statutory provisions apply. In other words, if you are buying from the actual debtor on HP, you can acquire a good title if you are an innocent purchaser for value.
For what it's worth ND, the link you quoted focuses on the dissenting judgement, which is not a statement of the law as it is, but merely as Sedley LJ would like it to be. (So would I, to be honest, but I can see the merit in the distinction between a void and voidable contract in this case).
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The real tragedy here is the number of cases where fraud or deception has occured, so nullifying the contract. Those obtaining goods by deception have a vested interest in a swift conversion into the hands of an innocent purchaser.
What this boils down to is FINANCE CHECK ANY PRE-OWNED CAR YOU PLAN TO PURCHASE!
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I too, many years ago, worked for "Britains Best Finance Company" and there was certainly more than one occasion when we lost title of a car to an innocent private purchaser.
I think that the onerous conditions imposed by the CC act (no repossession once one third of the HP price was paid - without a court order, etc) made many Finance Houses switch to Credit Sale or Personal Loans on which it was relatively easy to obtain a CCJ enforceable by attatchment of earnings order and so on.
Roger.
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