The Innocent Drivers

 

Hundreds of innocent motorists have had their cars repossessed because the vehicles’ previous owners had run up debts against them. 

In one case a man bought a Ford Fiesta for £1,200 through a website only to find the seller had borrowed £800 against its value and fled to Australia.

 He was told he must pay the vendor’s debt or give the car back.

 I need the car because my grandmother isn’t well and she often needs me to drive her to the hospital. 

'I’m advised that I can fight my case in the small claims court, but I’m not guaranteed success.

The Citizens Advice Bureau (CAB) is calling for Government action to tackle the growing phenomenon of ‘logbook loans’, where cars are being used as security for borrowing at rates of interest of up to 500 per cent by people struggling to get credit elsewhere. 

Borrowers then hand over their logbooks to the lenders and if they default on repayments their cars can be seized immediately.

One in five of the people who had vehicles seized were not the original borrower, according to an investigation by the CAB. 

The CAB’s investigation found that while the average logbook loan was around £1,286, some people had borrowed as much as £19,000. 

It also emerged that some borrowers were paying companies up to eight times the original loan and that some logbook loan companies were employing aggressive tactics to recoup debts.

Ms Guy said: ‘One client came to us after her son received death threats when he was unable to pay back the £5,200 he owed for a £1,000 loan.’

Anew code of practice was introduced for logbook loan lenders in 2011 to try to ensure the loans were being clearly registered and to stamp out irregular practice.


But Ms Guy says most logbook loan companies have flouted this code and warned that this lending practice now threatened to become a worse problem than payday loans

A 34-year-old mother who took out a logbook loan described how she had her car snatched by the lender.

She said: ‘One morning I was driving to my workplace when a tow truck suddenly stopped right in front of me, blocking my way. 

‘The driver then came over to my car, reached through my car window and just grabbed my keys.

‘He then towed my car away and left me standing in the pouring rain.’