The three concerns raised by the OFT about Hermes are pretty damning.  They are the key points in determining whether the customer can afford the repayments and fully understands the implications if they miss any payments. Read the full requirements (pdf 608kb)

I wonder what information was found to be held back?  Was it information such as non-payment will result in the borrower losing the vehicle? That it will be repossessed and sold to cover some of the debt outstanding?

How about the additional charges once the borrower goes into arrears?  These are £12 for a telephone call to be told you are in arrears at a maximum one call per week.  It’s also £12 to get a letter to say the same, again at a maximum of one letter per week. I make that £100 per month just to be repeatedly reminded you are in arrears.

Then there will be the storage charges once the vehicle has been repossessed. This is usually £25 per day for 14 days. That’s £350 by the way! And let’s not forget the collection and cleaning fee as well, about £200 and £60 respectively.

This to me is key information that every log book lender must make clear and ensure the customer understands before such a loan is granted.

Hermes / Log Book Loan Customers

So where do those borrowers stand that were previously customers of Hermes, before the detailed investigation, does this mean the Log Book Loans are now unenforceable because of the way that customers were misinformed and incorrectly processed? We asked Marcus Bright, a Civil Litigation Consultant with Maxim Legal and Commercial and he said:

"A breach of the OFT guidelines (such as those dealing with pre-contractual enquiries) will not necessarily render a credit agreement as unenforceable. Certain breaches may however assist in negotiating settlement of disputes with the lender (such as those concerning affordability) or in gaining the sympathy of the courts in proceedings brought over the credit agreement."

The Code of Practice

Oh, by the way that code of practice is only voluntary for Log Book Loan Companies. Read Code of Practice

Log Book Loan Self-Help Guide

The guide is designed to help you with arrears, repossession and excess charges. It also informs you of your consumer rights plus lots more.

Take me to the Log Book Loans Self-Help Guide by DebtWizard

Can you help with a 'Group Action' on Log Book Loans?

Have you purchased a vehicle in good faith and later discovered that it was the subject of a bill of sale (or logbook loan) taken out by a previous owner? Perhaps the vehicle was seized from you by the logbook loan company or a demand for money has been made on you.

If this is you then read more here Group Action re Log Book Loans.

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