Every year thousands of borrowers and unwitting buyers of second-hand vehicles are falling victim to unfair logbook loans.
Logbook loans are a way for borrowers to use their car as security for a loan. The lender takes on ownership of the vehicle but the borrower can carry on using it. Borrowers who miss payments can swiftly face repossession of their vehicle as well as a rapidly increasing the outstanding loan and incurring high charges – even if they have already paid off most of their loan. More worryingly, anyone buying a second-hand vehicle that is still subject to a logbook loan can find themselves liable for any outstanding amounts on the loan and can unexpectedly find themselves losing the vehicle or having to pay off the loan.
In a report published recently by the Law Commission, it was recommended that changes are made to the law that would make this form of lending fairer for borrowers and offer greater protection to people buying second-hand vehicles that are still subject to these loans.
Michael Flaherty, comments “It is high time the law was reformed to bring protections to both logbook loan borrowers and the unwitting purchasers who, in all good faith, buy second-hand vehicles that are still subject to these widely used and unfair loans.”
If you would like assistance in relation to a consumer or debt matter, call Michael on 01329 822333 for further information.
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