Citizens Advice Bureaux is a free service that impartially and independently provides assistance to citizen of the UK this rather charitable organisation helps people in need getting justice, get out of debt, get asylum, employment and lots of other stuff. They really do good work and after having received thousands of complaints against logbook loan lenders, the CAB instigated plenty of legislation in the past, but the CAB is still not happy with what has been done. Nowadays it is not allowed to provide logbook loans unless you have a valid Consumer Credit License, which is one of the imposed limitations the government established ever since the public outcry even warranted considerations of banning logbook loans altogether.
It is almost impossible to ban a business that is borderline legal and that is very profitable for bankers, so the government did next to nothing, allowing the abuse to go forth next to untouched, which continued to generate complains with the CAB. This resulted in further demands and pressure for the government and particularly the Financial Conduct Authority, which does seem to respond, albeit grudgingly and insufficiently. Nevertheless, the new limitations imposed since 2014 did provide some improvement reducing the amount of complaints somewhat, but not completely ensuring that customers were treated in a proper and respectable way.
Proper conduct suggestions and the requirement to get a permit are not only being perceived as necessary nuisances by people who do want to collect more than 400% APRs for giving out loans, but not truly posing as any kind of deterrents, nor do they result in more favourable lending conditions. People are still being treated badly and logbook loans are still the worst loans available on the market. Unfortunately for people with bad credit, these kind of loans are perhaps the only other way, next to payday loans, to get their hands on some extra money, which seems to befall more and more people in recent years.
Citizens Advice would like to make the government to introduce the same rights and protections to logbook loan customers as hire purchase and conditional sale agreements provide, including better protection for third parties. One of the main concerns and also grievances that were reported, is the fact that many of the cars under logbook loan obligations are being sold off to unsuspecting and duped people, who are being made responsible for someone else’s improper and maybe criminal conduct. Why should someone who purchased a car in good faith from a person, which obviously was a title holder of a car, be held accountable that he was sold a car with a prior obligation, but was not notified of any such debt?
The point being, if such a car is being sold to a third party, then the bill of sale should not allow the original lender to repossess the car without a court order from a third person that does obviously not owe any money to the lender. This dark area of legislation can very easily be taken care of, but may be the reason why in future the sales of logbook loan providers would go down, which again is not something the legislative bodies like to cause. Generally speaking, people with money, particularly the people who have extra money to lend to other people have a stronger voice than regular folks. Incidentally, this is the reason why logbook loans were not banned in 2009 and why the ludicrous APRs and borderline loanshark behaviour has not been curtailed. Careful who you vote for.