Found this articles on the BBC today

Logbook loans

Seems something else for a buyer to beware of before buying a used car. I have never heard of them in 19 years of car ownership, but the law goes back to Victorian times.

Never heard of it either but you would think the garage that had the car would have done a HPI on it before buying it/taking it as a trade in.

"I wanted to get a car that would last me a long time"

"second-hand Peugeot 206" :rofl: :rofl:

Would this show on a HPI check? I bet you that it doesn't....and there probably isn't anyway to check.

And if i was Louise i wouldn't have paid a penny and given the invoice to the garage to pay as I would hold them liable and at worst could have been charged for selling 'stolen' property.

I heard this on the radio this afternoon. They don't show on HPI checks and you don't own the car.

They had some girlie that had been asked to settle the loan on a car she had just bought.

Pretty scary really.

You would think that logbook loans should by law, have to inform the necessary that they have a financial interest in the car, then it would show on HPI. just the same as any other lender.

If ownership is formally handed to the lender, shouldn't this be shown on the V5? If so wouldn't this show up when a prospective buyer (trade or private) looks at the car as the person offering it wouldn't match to the V5?

The V5 is NOT proof of ownership. It actually states this on the V5. V5 only records the Registered Keeper of the vehicle.

Don't forget that if you buy a car on HP it doesn't actually become yours until the debt is paid in full, so your point would apply there too.

The problem is that these type of loans are under a very old piece of legislation that doesn't require them to be recorded, and to do so requires an alteration to a newer Act. The previous Government was going to amend this Act, but lost their time to do it, and the current lot don't seem to be bothered.

I'm sure that those that offer these loans knew this "shortfall" and have made use of it.

I see. Thanks. Knew someone would have the answer.

I don't understand why anyone would what take one out as the APR is over 460%

These crooks are legal loan sharks, just like a lot of these numpties on TV who advertise short term loans. APR is in the stratosphere.. Their prey is people on low pay, and who are up to their eyeballs in debt.

Felly's right, these loans are aimed at the high risk borrowers who no-one else wants.

Is there any way check whether a car you are thinking of buying is subject to an unpaid 'Logbook loan'?

See my reply in post #7, and the link in the opening posting.

Basically No!

Edited 27 February, 201115 yr by Llanigraham

Guess you'll have to credit check any seller now and if they look like they have credit problems, then don't buy the car

If you buy from a garage or retailer rather than an individual, you'd be due a full refund as they sold you something which was not theirs to sell.

See my reply in post #7, and the link in the opening posting.

Basically No!

Hang on, if the loan is secured on the car, and a potential buyer through reasonable endeavour can't obtain notice that there is an outstanding liability at time of purchase, how can he/she be liable. If no mention is made in the contract of sale how can Caveat Emptor apply ?. It can't be as wide as that. This type of transaction, then totally undermines a fundamental principle of English commercial law. And presumably this risk could extend to all other second hand property transactions e.g. car boot sales,E-bay, jewellers. This could have the effect of totally closing down the second-hand personal property market, So, politically, how could HMG stand-by without legislating ?

Surely, the moneylender, before instituting an action for recovery of possession, would have to be assured that he was able to produce written evidence from their own records of a written and signed notification from the original loanee (

Pre-dating the sale to the victim) that the liability had been transferred or written-off and that ownership had changed - presumably these fly monkees won't do that otherwise they will become liable to pay-off the balance. If the moneylender can't then surely their action can only lie with the original loanee for either the balance of the loan or possession - bearing in mind a change in the V5 is only proof of who is the registered keeper. If they can, then all the victim has got to do is either request that the dealer provide evidence of notification of the liability and/or prove that the person/organisation that sold him the car didn't make reference in the contract of sale to this liability. I would have thought, that unless their is some sort of legal presumption or deeming along the chain if logic that the victim could walk away from small claims court with costs and possibly could take a follow-on action against the plaintiff and ther legal representation for incompetent/vexatious litigation. WooHoo !

Also, the moneylender would have to prove to a court that they were assured that the applicant was legal owner of the car at the time the loan was made, otherwise they would be complicit before the fact in the execution of a fraud and that would void the loan agreement. Surely, before they can get an order for re-possession of a vehicle i.e. the legal property in the veicle, they must show evidence of a chain of legal ownership from day one of the vehicles existence i.e. manufacturers sales docket to in-country vehicle distributor, vehicle distributors sales docket to dealer, dealers sales docket to owner one, owner one sales docket to owner two, and onward up to the loanee.Chances of being able to do that ? Can you imagine the opportunities this could open up to the crims. You steal a high-value motor, take out a log-book loan then sell the car to some dubious hoodlum in the far away place and its in the container port on its way out of the country before you can say "praise the prophet". They'd get two bites at the cherry. That said, i suppose you could do that, with a bit more admin, with a personal loan.

Further, I'm not sure whether this would or still applies. Drawing on the info in a suitably ancient copy (1973) of Stevens and Borrie's Commercial Law (The latter was a former HMG's DG of Fair Trading ://en.wikipedia.org/wiki/Gordon_Borrie,_Baron_Borrie), it refers to then applicable Moneylenders Acts of 1900 and 1927, in regard to the limitation of actions in respect of moneylenders contracts. It states "A moneylenders rights to take proceedings under a contract either to recover lent money and interest or to enforce a security is barred unless the proceedings commence within 12 months from the date on which the cause of action accrued".

Victims may be able to rely on this as well.

If the liabilities can't be detected by HPI or Credit reference checks before or at the time of sale, how can liability for payment be fairly transferred in Equity ? And if no reference is made in the contract with the victim, how can it be transferred in law ? The BBC article made reference to to these Bills of Sale being registered.Where ? If that's not disclosed or available at the time of sale . . . how can notice apply ?

In real property transfers i.e. houses etc, buyer gets the opportunity to inspect registers of charges maintained by central and loacl government before buying. Why is the high value personal property area excepted ?

The good 'le days of debt collection:-

http://www.youtube.com/watch?v=k9e3dTOJi0o&feature=related

Nick

Edited 1 March, 201115 yr by Clunkclick

I've just read-up on it. That 1882 Bills of sale act is a fraudsters charter in todays environment.

For those that don't know, a Bill of Sale is a document which transfers the property in goods. Its just like a mortgage for goods, except you don't have to prove legal title to the property you want to mortgage or a genuine intention to get title, before you can enter into to this type of arrangement.

Some Bills of Sale transfer the property in goods without involving a change in possession - log book loans.

The latter are regulated by 1882 Bills of sale act

There are two types of Bill of Sale,

Absolute, where the property passes to a nominated transferee

and

Conditional, where the property passes initially to a transferee and then re-vests with the original owner once a condition specified in the bill is fulfilled i.e. a sum of money specified in the bill is repaid.

These car loans are of the conditional type.

Apparently to be valid, the Bill of sale for the particular transaction has to be registered with the Filing Department of the Royal courts of Justice within 7 days of execution and it appears that at the time the document is made, there is no requirement for the person asking for dosh to prove he has the legal title to the car. All he has to do is claim/show that he has possession at present and get some worthies to swear and sign affidavits to that effect - with a conditional bill the people swearing don't even have to be officers of the court e.g. solicitors etc. The affidavits are then bundled with the Bill of Sale to substantiate its validity and presented to a Registrar of the Courts who decides whether to admit them to the records of the Filing Department. Once the court accepts the document into the record, it in effect deems, for there on after, that the legal property of the car is owned by the log-book loan company until full repayment is made. Talk about arsenic and old lace - not exactly thorough going investigation into title or a piece of legislation fit for the 21st century.

So when the original borrower defaults on his payments, the log book loan company, who at that point have legal title to the car seek to re-possess it from the person in current possession to sell it in order to clear the debt balance. And if the original owner has exchanged it for money since the initial Bill of sale (mortgage) was made out, then those subsequent transactions are not recognised as the earlier transaction has chronological precedence and because the seller didn't have legal title to make the sale.

Just a crims charter. why am I not surprised that no-one in the Courts of Justice admin system ahve raised the issue of the deficiency in this system with the Lord Chancellor - apparently a commission did look at it in 1971 and later in 2009 then forgot about it.

http://en.wikipedia.org/wiki/Bill_of_sale

I would suggest that the evidence base used to set up the Bill of Sale is flawed,in that legal title does not have to be proved as a pre-condition, only possesion.

Suppose as a temporary fix they could open up the courts or company records to search on an HPI check.

Nick

Edited 1 March, 201115 yr by Clunkclick

That was perhaps the most informative post I have read on any forum in a while.

Nick, which is exactly why the previous Government were about to pass an Act changing the 1882 Bills, but lost the Parliamentary time to do so.

Unfortunately the current "lot" don't see it as important!!

Nick, which is exactly why the previous Government were about to pass an Act changing the 1882 Bills, but lost the Parliamentary time to do so.

Unfortunately the current "lot" don't see it as important!!

I wonder whether the reluctance of the current lot to legislate is because the Bills of Sale device is used by them who must be paid (Obeyed ?) in the City of London.

Nick

Nick, which is exactly why the previous Government were about to pass an Act changing the 1882 Bills, but lost the Parliamentary time to do so.

Unfortunately the current "lot" don't see it as important!!

Run out of parliamentary time to protect the innocent public from the danger of logbook loans, presumably because they spent a while being backstop for our entire financial system.

I love the smell of irony in the morning.

I wonder whether the reluctance of the current lot to legislate is because the Bills of Sale device is used by them who must be paid (Obeyed ?) in the City of London.

Nick

What you're saying the entire failure of the derivatives loan system, is because the bankers gave a logbook loan out to the Greeks Island and are now trying to reposess Ireland because that's an island too? Those dastardly bankers!

(Sarcasm)

What you're saying the entire failure of the derivatives loan system, is because the bankers gave a logbook loan out to the Greeks Island and are now trying to reposess Ireland because that's an island too? Those dastardly bankers!

(Sarcasm)

Ha! Ha! Ha! Ha!

Yes. You could say that not just one but many log-books were passed around.

And in so doing Fischer's MV=PT would apply.And we will be getting some of that very shortly.

However, that on its own, as our our american cousins would say, would be "like Shooting craps" - the degree of uncertainty in obtaining your desired outcome would be too great.

As we all now know, it would be far more elegant and deftly crafted and executed than some pyramid selling, ponzi like, spot the lady game ! For goodness sake, mathematicians from Cambridge would have to be involved.

(Sarcasm seen and raised)

Nick

Edited 5 March, 201115 yr by Clunkclick

There's some posts on the Consumer Forums about Logbook loans, I saw a TV advert for a company offering short term loans and the text on the screen said an APR of approaching 4200%.

There's some posts on the Consumer Forums about Logbook loans, I saw a TV advert for a company offering short term loans and the text on the screen said an APR of approaching 4200%.

Wonga short term service has a APR of 4214%, but the loan duration is only up to a month. APR is an industry standard calculation that shows *annual* repayment costs, hence it skews it a bit.

Iv used wonga before when I ****** up my money one month, was cheaper than the bank charges for a failed dd

Matt