Friday, September 12, 2008

Hire Purchase: Car Repossessed?







Salam,

  1. I have one assignment yesterday regarding one poor chap's car repossessed by his financier.
  2. His case is straight forward but one that typical type of problem, the brief is simple:-
    1. This guy has a car which is still under hire purchase
    2. He defaulted for more than 3 months which gave the bank rights to repossess his car under the Hire Purchase Act, and the bank did.
    3. The car was kept at one store somewhere in Penang for 2 months pending auction.
    4. He however managed to settle his overdue installments (after getting some soft loan from friends) and wanted to bring out his car.
    5. Too bad, somehow when he tried to get back his car from the store, he noticed that some (quite substantial) 'things' and parts of his car is no longer intact.
    6. He did a complaint to his bank and then lodged a police report.
    7. The police due some reasons (God knows why) asked his just to refer back to the bank and had done nothing till date, in fact he was advised by the police to settle the matter directly with the bank.
    8. He then went back to the bank and as expected the bank 'tries to not to assume any responsibility' and ask him to lodge another report against the store and/or the repo guys.
    9. The car till date cannot even be used at all, and to make things worse he still have to maintain his monthly installment (not to mention the friendly loan that he has to pay back).
  3. He came to me to seek some advice on how to solve this problem.
  4. For me, what he has been facing is not a new scenario, perhaps too frequent we heard same case over and over.
  5. I will try to post in other occasion how the repossession procedure should be carried out legally and what is your right as hirer.
  6. Any way back to this case, what I can say is first lodging the police report is the right thing to do, in fact there was an element of wrongful criminal act has been occurred, namely the repossesser and / or the store keeper should be held responsible for the 'missing parts' of his car. And the police have to conduct an investigation to catch his ugly cheep thief.
  7. There is no excuse for the police to wrongfully advice him that he should settle the matter with the bank directly. (Perhaps, he should file another complaint against the particular officer).
  8. Second, no what is done by the repo team and the store keeper the bank must be held responsible as the principle or master to them, almost everybody know about the responsibility of a master upon the wrongful act of his agent. In this case the repo team and the store keeper are the agents of the bank.
  9. In short, my advice is to sue the bank for the lost, demand further to lost of use from the time he took back his car till the actual date the condition of the car has been restored, plus try to demand general damages, and if lucky even skip paying for monthly installment during the aggrieve period.
  10. Even the criminal case is not been initiated yet (again God knows when), the civil claim against the bank can always start first, remember the criminal and the civil case can run concurrently.
  11. I am quite confident that he will manage to secure his claim against the bank for his unfortunate situation.
  12. Somehow, I been thinking that is it the practice of the bank to simply hire repo team without first checking thoroughly their background? This practice of uncivilized act of repo team should not be allowed to continue. What more if the bank tries to escape liability of this criminal act?
  13. As for his friendly loan or whatsoever, I see no reason or solution to for me to interfere because this is more on personal matter which is not directly related to this case or to be precise no means for legal remedy to seek from the bank.

26 comments:

  1. Do you have an update on the outcome of this case? Did the hirer manage to successfully sue the bank for damages etc.

    On the same note, I was wondering if you have information on the lawful procedures when it comes to calculating the repossession fees?
    My car was repossessed recently (in fact just this past Friday) and I went to pick it up on Monday. Fortunately, it's still in running order. However, the bank (EON) charged me RM500 for repossession. How do I know if this was a reasonable fee? The repossessors did not tow away the car. The waited for me outside my house and followed me to my place of work in Damansara. As I got out of my car they accosted me from both sides. I handed the keys over to them and they then drove my car to a yard in Selayang (the yard, which was protected by high security fences was called "Too", in the middle of no-man's land). I paid off the loans about 1hr after they took my car. Initially, the bank officer accepted my payment of the outstanding installments but about 20 minutes later said that they cannot accept my payment unless I also pay RM500 in repossession fees at the same time. This seems a bit exorbitant for someone just to drive my car from Damansara to Selayang isn't it? When I called the EON Bank Credit Recovery Center in Klang, I spoke to the officer in charge, a person named Shah. He told me over the phone that the RM500 charge was the minimum amount mandated by Bank Negara and that I if I wanted to petition for a reduction, I would have to write to Bank Negara. Guess what? I called Bank Negara and the representative told me that there's no such thing as a minimum, and that the banks calculated the amount based on the difficultly of repossessing the vehicle (which in my case was quite easy). So I called Shah back at the CRC and when I told him that I'd spoken to someone at Bank Negara, he gave me a different story this time, saying that the RM500 was the minimum amount charged by the repossessors, namely "Too". He also said that all of the RM500 is paid to the repossessors and that the bank does not take any of that amount for processing fees (which I found quite hard to believe). Anyway, bottom line is that it seems like the bank is free to charge any amount that the feel like charging at the time of my repayment of the installment. I feel that there is a severe lack of transparency in this regard. Is there anything that can be done to obtain further information on this, and perhaps maybe challenge the charges?

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  2. perharps, you could always refer to Hire Purchase Act 1967 for more info.

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  3. If u were to refer Section 14(3)(a)of the Hire Purchase Act 1967, it seems that when the owner by himself took possession of the car, then, u have to pay the net balance due & with THE REASONABLE COSTS(storage,repair,maintenance incur by owner incidental to his taking possession)& (b)when u return the car by yourself u will not be charged by any reasonable cost which these would means that the bank can charged a cost for repossessions. (but im not sure towing would include in storage,repair or maintenance cost). We should amend this section and make it so specific so the bank won't charged any unreasonable cost.

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  4. Hi there,
    I was working overseas and sent money back monthly to pay for my car loan. However, my friend who was supposed to take care of my car, used the money and just left my car in an empty house for close to 2 years.

    I am back, and I cannot afford to pay the defaulted payment amount of close to 20K. Do I just surrender the car to the bank and let them auction it off, and pay the amount outstanding monthly?

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  5. I am sorry to hear about your case, it is a bit difficult to trust anybody thesedays. Anyway, as far as your responsibility and liability is concerned, you need to pay all overdue monthly instalment. surrendering the car back to the finance is one of the option to let the bank auction the car which may reduce the outstanding balance (that if the selling price is good! otherwise you need to cover the different).

    as for the balance outstanding, even after the auction, you may negotiate with the bamk to pay on instalment basis, in any event, all are up the bank descretaion. I am sure you can talk nicely to them, afterall it is the money they want not making you trouble.

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  6. Hi Kamarul Irzuan, Asmk,

    I have read "Code of Ethics on Repossession" provided by a bank which my brother made loan with.

    I would like to know, if the repossession was NOT conducted according to the Code of Ethics, what shall I do?

    Make a police report, make a report to BNM?


    Thank you in advance for your time.

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  7. Thank you very much for your info. I just surrendered the car this afternoon. I owe the bank RM56K, according to the officer, the auction price is around RM10K, which means the difference is 46K. I will try to find 16K to reduce the amount outstanding to 30K and pay them installments I guess. Wish me luck!

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  8. Assalamualaikum bro...

    i need ko know what is the important issue need to be taking care in handling cases on repossession?

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  9. the banks are runnning daylight scams and guess who is backing them up, the BNM of coz. the fucking bastards are here not to help us but to give a hard time to everyone. but nothing can be done. lets think of some way to screw the bank.
    try to save money and buy cash even if takes lots of time. it actually helps a lot.

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  10. Hi Kamarul,
    I would like to seek your advice on my current matter. My husband has encountered problem with RHB Bank just Dec last year; we are the unsuspecting consumer who pays car installment without fail every month on the grounds we believed that there were no outstanding installments. To cut the story short, the car was repossessed on the highway, not from the authorised driver, and by of cos 'gangster'. We were required to settle the outstanding amount plus RM500 before we could take the car back. I reported this incident to Jabatan Consumer and Bank Negara has also followed through this case. Now what im not satisfied about is that the bank manager has the cheek to inform me in writing to state that they did not issue any instruction for repocession and has no knowledge of the fees charged. Where does that leave me? I have the deposit slips for the RM500 being deposited into an unknown individual account and signed by the officer of the bank.I'm in the midst of responding to this matter and would like your further advice. Appreciate if you could reply urgently. Thanks

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  11. Somehow, our Malaysian banks have a very long way to go when comes to ethics. And the whole system seem to want to protect the banks 'so called' for the economy.
    Consumers have to be very-very careful when dealing with them. They have turned into licensed thugs..

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  12. Hi KI,

    I had a situation last weekend. I had my car repossessed but I understood, it was my mistake for delaying the payment (FYI...I had only another RM3.6k to settle my purchase which I did last Monday and I believed repo team love this type of vehicle as the auction margin will be very high). I'm ok with the repossession of my car as I knew I can settle it but the way ther took my car is very cruel.
    This was the scene. At some point I realized I was followed. I speed up and then suddenly the car that followed me just cut in front of my car in the middle of the road (I don't think even police can't just cut through your road). The repoman, claimed my car as their as the bank had release the repo letter (the letter was at the same date and around the time I was 'arrested' faxed to a gas station----there is a connection in the bank itself that get a bit of the repo otherwise who can faxed the letter...hmmmm). First they acclaimed a settlement of RM800...wow, it a half month work. Then the 2nd man ask for RM700 but after a while it was RM750...what the heck.(I went to the Ambank to get back my car...the charge was only RM400 plus RM30 for 3 days of hiding my car...the repomen lost RM150X3 I did offer them).

    The questions for this vehicle repossession act that always in my mind before the case and until now are:
    1. To whom the bank make payment to? Does the repo team had a registered company or they are just plain gang*? Are they bank connected to this 'agencies' as Along to gang-star? Both bank and along act the same.
    2. Are the repomen allowed to pursue a car in their list or they need to wait until the owner stop? I believed no such act should be allowed as it will jeopardize the safety of all vehicles around the point of impact. Any charge can be made to such act?
    3. Should the repossessed owner get a copy of police report? For me, if they took your merchandise without a report, it should be called 'carjack or 'kena samun'.
    4. I just can't understand this. The bank got your number, got your address and know your workplace....why the hell they need to ask such a thug to get back vehicles. Don't banks got enough credit to call the customer and discuss on the matter?

    I got lots more question regarding this process because I believed this act of vehicles repossession is the act of 'everybody get a bite'-the repomen, the connection and the storeyard from the so called 'fees'(pay is when we pay somebody to do a job, fee is when we have to pay to men who hit us that was request by other man..it is, bank ask thug to hit on us but we have to pay for the cost....macam ni pun ada. it's like asking an assassin to kill somebody and ask the payment from the dead guy)

    Mr KI,
    If this can be make a case, do reply.

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  13. Very agree with the above comment. Malaysia banks are robbing normal citizen cash at daylight. They are the most notorious thug.

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  14. Repoman can take back the car in anytime ?
    They still can repo the car after 7PM ? thx....

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  15. I would like to know about the new vehicle reprossession law that was amended. Could you please highlight it.

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  16. what in the name of HELL did the malaysian bank did to Malaysian hirer...

    i think BNM is always in gangs with all the banks to rob Malaysian off their hard earn monies. To make the matter worse, how could a repo be done by a third party without the presence of an authorised bank officer or a person legalise? i recall in singapore any repo must be conducted by the presence of a police officer. why can't this be done. and also if your HP with the bank is settle up to 80%, the bank has no rights to repo but to take legal action to set off their balance.

    Looks like in Malaysia the best things to do is not to use any bankers. CASH is still the best but i believe with an average income of malaysian, anyone would need them in one way or another.

    Why can't our government think on RAKYAT behalf? looks like it is really a time to change to a better side of the grassland and hope for some work to be done.

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  17. Dear All,

    To prevent vehicle been repo, 1st make your instalment on time.

    Before they repo your vehicle they must send you a fourth schedule and give you 21days to pay up.

    If you really do not have the money to pay, just send to them before 21days, they not even can charge you for vehicle storage.

    If you are stubborn, your vehicle will be repo.

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  18. Hi,

    If you said that bank do rob your money, please do not take any loan from them.

    When the time we take any loan, we do sign agreement and agree on that. Actually bank help us a lot, at least help us to own a car, house, credit card....

    But when we not able to pay or do not want to pay, we say bank are thug...think properly before you said...

    Without bank, you do not even have a ATM card...aprreciate them not critise them for own benefits...

    we all must binding the law....

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  19. I am an old pensioner lady having an old continental car which still owing bank 2+K. 6 months ago the car was sent to workshop for changing the starter and oil seal. But, the mechanic destroys the car instead of repair. Until now i don't have car to use, and I have no money to pay to the bank. I inform the bank to repossess the car, but bank refused to do that and they put me to court case. I appreciate anyone to give me some advice.

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  20. Dear anonymous,

    In the case of hire purchase, the bank should repossess the car instead of initiating a legal suit in court.

    What can be done is to wait until the formal letter from the bank lawyer's or court's document.

    Regards
    Khairul Aiman
    Messrs. Irzuan

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  21. Dear Annonymous,

    First you already breach the agreement that not to keep goods in a particular place in the agreement, you can be fine up to RM25K or imprisonment not exceeding 3 years. Bear in mind.

    Not matter the vehicle on the road or not, you have to pay the installment.

    Be fair to bank, if people owe you money do not want to pay you, what do you feel?

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  22. Hi, would like to get some clarification. Is it a must for a repossesor to reposses the vehicle with the acknowlegdement of the owner? Now that my vehicle had been repossesed without me knowing as I'm staying in a flat. No calls from the bank either.

    Now what can I do in the event my vehicle is damage during the repossession? Can they twist and turn back the damage under my responsibility? Please advice. I'm helpless and yet not satisfy as the repossession was out of my understanding.

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  23. dear anonymous,
    according to Hire Purchase Act, notice intention to repossess the car must be given to you. then they have the right to do so after 14 days of the service but no need if they believed the car will be concealed by you. the car can be repossessed without your knowledge but they must gives documents about it. nowadays they just repossessed the car and make a police report after doing so. then, regarding the damage, if your car was damaged and you can prove the damage caused by them then you can claim for it from them. sorry for late response.

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  24. Dear Anonymous,

    Repoman normally will wait awhile before they tow your vehicle.

    Are your vehicle locate at the place where stated in the agreement?

    Next time, please surrender your vehicle yourself rather than waste the unnecessary repo fees.

    After surrender, u still have 21 days to collect money and get your vehicle back without storage charge & repo fees. That is the best way.

    Repoman nowaday got laptop, can easily get your vehicle info.

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  25. Outstanding piece of work you have done. This type of posts is rarely found. This site has proved its metals in the way of giving extra ordinary information.

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  26. Dear Encik Kamarul,

    I have a friend who drives a car (still under loan - 9 years). Somehow or rather, he has never paid the car since September last year until this year Dec 2012. I understand that a car will be repossess even after 3 months loan not paid. By the way his account has been blacklisted by the bank.

    My question is In this case, why did the bank still not take legal action against him (it has been more than a year?

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