Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to Steffers0,Anonymous,CryptoPlankton,GrahamPlatt,Walkeia, for Donating to support the site

The scandal of credit hire

including wills and probate
Clitheroekid
Lemon Quarter
Posts: 1704
Joined: November 6th, 2016, 9:58 pm
Has thanked: 651 times
Been thanked: 1542 times

The scandal of credit hire

#251700

Postby Clitheroekid » September 13th, 2019, 8:28 pm

I think I've mentioned this before, but I can't find it. Credit hire occurs when you have a no fault accident and your claim is captured by an accident management company. They will then milk it for all it's worth.

In theory, they are there to help you recover compensation for your actual or imagined whiplash injury, but in practice they see it as an opportunity to put you into one of their fleet of cars and then screw the third party insurers for hire charges. They will usually also put your car into a compliant garage to be repaired - compliant in that they will spin out the repair period as long as possible to maximise the hire charges.

As very ancient members of TMF may remember I first came across this scam because it happened to me all of 15 years ago. In simple terms I had just bought a new car, it was damaged in a no fault accident, so I took it to the local dealer for repair. They said they'd arrange at no cost a replacement car, and although it was technically a hire car I wouldn't have to pay anything as they'd recover the hire charges from the other driver's insurers.

I duly signed up for it, and the same day took delivery of a brand new identical replacement. I was suitably impressed.

For whatever reason it took 3 months to fix my car, but I was perfectly happy to drive their car for that time. Eventually mine was fixed, I returned the hire car and forgot all about it.

Until I received a letter several months later, asking me to pay the credit hire company, the notorious Accident Exchange plc, the not inconsiderable sum of £23,378.67!

It turned out that they'd charged a total of £29,378.67 for the car hire, but, not surprisingly, the TP insurer would only pay £6,000. They said I'd signed a hire agreement, and that I had to pay the balance.

To cut a very long story short I never paid them a penny, but even though I was in the trade it was still a very unpleasant experience, and generated a hatred in me for AE in particular but CHO's (credit hire operators) in general.

Sadly, AE have continued their predatory activities, and I see their name pop up occasionally in law reports, but a recent one was spectacularly greedy even by their standards.

This is a link to the article, which contains a link to the judgment in case anyone's interested - https://www.civillitigationbrief.com/20 ... ims-track/

In summary, a Mr Messenger had a minor no fault accident. AE got involved, and because his car needed a repair to a light costing £230 + VAT, which he said he couldn't afford, they hired him a replacement - for 11 months ...

They then put in a hire bill for over £40,000! This was, according to the judgment, later settled for just £1,000.

The judgment was really about the legal costs. AE had argued that because it was a £40k claim and they'd `won', in that they'd recovered £1,000, they should have all their legal costs paid (probably around £30,000). Fortunately, the judge gave them short shrift and allowed them only the costs they would have got in the small claims court - a couple of hundred quid. So another bloody nose for AE.

But I don't suppose they're bothered, as for every one like this there are probably a hundred where their exorbitant bills are paid.

I find it both incredible and deeply depressing that this same scandalous practice is still ripping people off 15 years after it happened to me. In many ways it's even worse than the whiplash industry, as the sums involved are usually far more than the average couple of thousand quid for a whiplash claim.

I've written to my MP about it on several occasions, but because, unlike whiplash claims, credit hire never makes the front page of the Daily Mail it seems the Government doesn't give a damn.

AsleepInYorkshire
Lemon Slice
Posts: 663
Joined: February 7th, 2017, 9:36 pm
Has thanked: 464 times
Been thanked: 278 times

Re: The scandal of credit hire

#251740

Postby AsleepInYorkshire » September 13th, 2019, 11:32 pm

Clitheroekid wrote:I think I've mentioned this before, but I can't find it. Credit hire occurs when you have a no fault accident and your claim is captured by an accident management company. They will then milk it for all it's worth.

In theory, they are there to help you recover compensation for your actual or imagined whiplash injury, but in practice they see it as an opportunity to put you into one of their fleet of cars and then screw the third party insurers for hire charges. They will usually also put your car into a compliant garage to be repaired - compliant in that they will spin out the repair period as long as possible to maximise the hire charges.

As very ancient members of TMF may remember I first came across this scam because it happened to me all of 15 years ago. In simple terms I had just bought a new car, it was damaged in a no fault accident, so I took it to the local dealer for repair. They said they'd arrange at no cost a replacement car, and although it was technically a hire car I wouldn't have to pay anything as they'd recover the hire charges from the other driver's insurers.

I duly signed up for it, and the same day took delivery of a brand new identical replacement. I was suitably impressed.

For whatever reason it took 3 months to fix my car, but I was perfectly happy to drive their car for that time. Eventually mine was fixed, I returned the hire car and forgot all about it.

Until I received a letter several months later, asking me to pay the credit hire company, the notorious Accident Exchange plc, the not inconsiderable sum of £23,378.67!

It turned out that they'd charged a total of £29,378.67 for the car hire, but, not surprisingly, the TP insurer would only pay £6,000. They said I'd signed a hire agreement, and that I had to pay the balance.

To cut a very long story short I never paid them a penny, but even though I was in the trade it was still a very unpleasant experience, and generated a hatred in me for AE in particular but CHO's (credit hire operators) in general.

Sadly, AE have continued their predatory activities, and I see their name pop up occasionally in law reports, but a recent one was spectacularly greedy even by their standards.

This is a link to the article, which contains a link to the judgment in case anyone's interested - https://www.civillitigationbrief.com/20 ... ims-track/

In summary, a Mr Messenger had a minor no fault accident. AE got involved, and because his car needed a repair to a light costing £230 + VAT, which he said he couldn't afford, they hired him a replacement - for 11 months ...

They then put in a hire bill for over £40,000! This was, according to the judgment, later settled for just £1,000.

The judgment was really about the legal costs. AE had argued that because it was a £40k claim and they'd `won', in that they'd recovered £1,000, they should have all their legal costs paid (probably around £30,000). Fortunately, the judge gave them short shrift and allowed them only the costs they would have got in the small claims court - a couple of hundred quid. So another bloody nose for AE.

But I don't suppose they're bothered, as for every one like this there are probably a hundred where their exorbitant bills are paid.

I find it both incredible and deeply depressing that this same scandalous practice is still ripping people off 15 years after it happened to me. In many ways it's even worse than the whiplash industry, as the sums involved are usually far more than the average couple of thousand quid for a whiplash claim.

I've written to my MP about it on several occasions, but because, unlike whiplash claims, credit hire never makes the front page of the Daily Mail it seems the Government doesn't give a damn.

Bu99er. That's another company I need to sell my stake in :lol:

Hi ck ... I hope you're well and that on balance your life's in balance :)

You're tenacity is remarkable. I'd like to say will you come back in 15 years time and tell us how you get on ... but hell I hope you find a way to bring this kind of behaviour to a close before that. I think what I'm saying is this ... I completely get you have written to your MP several times on this subject. Respect. But it hasn't had the desired effect. Are you giving up? And if so why? Noting I don't think you should ... but there must another route?

At some time in the future when I can cope with it I will come to this board and discuss some of the issues I have faced in my life. I am not strong enough for that just yet ... but, like you, there's a fire in my belly and I hate injustice of any kind. And [in my opinion] that may be a curse or a blessing.

AiY

EssDeeAitch
Lemon Slice
Posts: 533
Joined: August 31st, 2018, 9:08 pm
Has thanked: 132 times
Been thanked: 144 times

Re: The scandal of credit hire

#251752

Postby EssDeeAitch » September 14th, 2019, 5:52 am

This is a very good post on something that can have disasterous consequences.

I will certainly alert those in my orbit to this scam.

Howard
Lemon Slice
Posts: 718
Joined: November 4th, 2016, 8:26 pm
Has thanked: 257 times
Been thanked: 357 times

Re: The scandal of credit hire

#251773

Postby Howard » September 14th, 2019, 10:22 am

These examples do sound horrendous.

But when I googled Credit Hire to find out more, to my surprise, I see that Citizens Advice suggest using these firms under certain circumstances.

This is a quote from their site:

"If the accident wasn’t your fault, you can use a credit hire company instead of making a claim through your insurance company. A credit hire company pays for the cost of you hiring a replacement vehicle while yours is being fixed, and pays for the cost of repairs. The company then claims back these costs from the insurance company of the other driver who is at fault in the accident."

https://www.citizensadvice.org.uk/consu ... our-fault/

So presumably some Credit Hire firms are ok, as Citizens Advice must have considered their comments carefully? Presumably one just has to read the small print carefully before signing a legal contract?

regards

Howard

Howard
Lemon Slice
Posts: 718
Joined: November 4th, 2016, 8:26 pm
Has thanked: 257 times
Been thanked: 357 times

Re: The scandal of credit hire

#251774

Postby Howard » September 14th, 2019, 10:31 am

Clitheroekid wrote:I think I've mentioned this before, but I can't find it. Credit hire occurs when you have a no fault accident and your claim is captured by an accident management company. They will then milk it for all it's worth.

In theory, they are there to help you recover compensation for your actual or imagined whiplash injury, but in practice they see it as an opportunity to put you into one of their fleet of cars and then screw the third party insurers for hire charges. They will usually also put your car into a compliant garage to be repaired - compliant in that they will spin out the repair period as long as possible to maximise the hire charges.

As very ancient members of TMF may remember I first came across this scam because it happened to me all of 15 years ago. In simple terms I had just bought a new car, it was damaged in a no fault accident, so I took it to the local dealer for repair. They said they'd arrange at no cost a replacement car, and although it was technically a hire car I wouldn't have to pay anything as they'd recover the hire charges from the other driver's insurers.

I duly signed up for it, and the same day took delivery of a brand new identical replacement. I was suitably impressed.

For whatever reason it took 3 months to fix my car, but I was perfectly happy to drive their car for that time. Eventually mine was fixed, I returned the hire car and forgot all about it.

Until I received a letter several months later, asking me to pay the credit hire company, the notorious Accident Exchange plc, the not inconsiderable sum of £23,378.67!

It turned out that they'd charged a total of £29,378.67 for the car hire, but, not surprisingly, the TP insurer would only pay £6,000. They said I'd signed a hire agreement, and that I had to pay the balance.

To cut a very long story short I never paid them a penny, but even though I was in the trade it was still a very unpleasant experience, and generated a hatred in me for AE in particular but CHO's (credit hire operators) in general.

Sadly, AE have continued their predatory activities, and I see their name pop up occasionally in law reports, but a recent one was spectacularly greedy even by their standards.

This is a link to the article, which contains a link to the judgment in case anyone's interested - https://www.civillitigationbrief.com/20 ... ims-track/

In summary, a Mr Messenger had a minor no fault accident. AE got involved, and because his car needed a repair to a light costing £230 + VAT, which he said he couldn't afford, they hired him a replacement - for 11 months ...

They then put in a hire bill for over £40,000! This was, according to the judgment, later settled for just £1,000.

The judgment was really about the legal costs. AE had argued that because it was a £40k claim and they'd `won', in that they'd recovered £1,000, they should have all their legal costs paid (probably around £30,000). Fortunately, the judge gave them short shrift and allowed them only the costs they would have got in the small claims court - a couple of hundred quid. So another bloody nose for AE.

But I don't suppose they're bothered, as for every one like this there are probably a hundred where their exorbitant bills are paid.

I find it both incredible and deeply depressing that this same scandalous practice is still ripping people off 15 years after it happened to me. In many ways it's even worse than the whiplash industry, as the sums involved are usually far more than the average couple of thousand quid for a whiplash claim.

I've written to my MP about it on several occasions, but because, unlike whiplash claims, credit hire never makes the front page of the Daily Mail it seems the Government doesn't give a damn.


CK

I should have linked my post above as a reply. Apologies for the double post.

Do you think Citizens Advice should be mentioning these firms? Is it worth contacting them as they must be a key source of referrals for these companies?

The people CA advise will probably not be skilled in reading the small print of a contract. And they won't be the most resilient if they are subsequently the target of a demand for a large amount of money.

regards

Howard

Clitheroekid
Lemon Quarter
Posts: 1704
Joined: November 6th, 2016, 9:58 pm
Has thanked: 651 times
Been thanked: 1542 times

Re: The scandal of credit hire

#251873

Postby Clitheroekid » September 14th, 2019, 7:42 pm

Howard wrote:https://www.citizensadvice.org.uk/consumer/insurance/insurance/types-of-insurance/vehicle-insurance/vehicle-insurance-if-the-accident-wasn-t-your-fault/

So presumably some Credit Hire firms are ok, as Citizens Advice must have considered their comments carefully? Presumably one just has to read the small print carefully before signing a legal contract?

I can't say I was impressed by the CAB guidance.

It's not a good start when they don't even bother to check the text before posting it:

If you use a credit hire company, you won’t have the pay the excess on your policy.

This is also a complete non sequitur. If you weren't at fault and you make a claim you won't have to pay the excess whether or not you use credit hire.

You also sign to say any costs will be in your name ...

What on earth does this mean?

... and may be asked for financial details. This is in case the insurance company takes the credit hire company to court, because they think they have charged too much. In this case you will have to give evidence in court. You may need to prove you needed the hire car and couldn’t pay for it without the help of the credit hire company. If this does happen, get legal advice.

This is confusing and rather misleading. The whole point about credit hire is that it can only be used where the innocent driver can prove that they are `impecunious' - i.e. that they couldn't afford a normal hire car without making unreasonable sacrifices. That is, of course, never explained to the customer, and the first most of them know about it is when, as in the linked case, they're dragged into court by the CHO to try and prove how poverty-stricken they were.

But at least the CAB have flagged this up as a risk, and the advice that any unfortunate credit hire customer in that situation should `get legal advice' is interesting - who's going to pay for that legal advice? Certainly not the CHO!

One might reasonably ask why should an innocent victim of an accident ever have to contemplate the hassle and upset of attending court to give evidence of their poverty simply for the benefit of the CHO? And why should they ever have to consider shelling out hundreds of pounds (which, being impecunious, they by definition don't have!) for legal advice to protect them from a CHO who had pretended to be their saviour?

In principle, credit hire is perfectly reasonable, just as personal injury claims are. However, what's happened with both is that they have been hijacked by spivs and shysters for their own benefit, and the poor driver is merely the mechanism that enables them to carry out their predatory activities.

Incidentally, there was another notorious case last year involving credit hire. The judgment is here - https://www.bailii.org/ew/cases/Misc/2018/B7.html I wouldn't expect a non-lawyer to read it (though for those who are interested it's actually quite readable) but just have a look at paragraph 5 for some further outrageous examples of credit hire claims.

Clitheroekid
Lemon Quarter
Posts: 1704
Joined: November 6th, 2016, 9:58 pm
Has thanked: 651 times
Been thanked: 1542 times

Re: The scandal of credit hire

#262794

Postby Clitheroekid » November 7th, 2019, 2:21 pm

In the latest credit hire case to hit the courts the hire company involved in the other case that I mentioned, Direct Accident Management, attempted new heights of scammery, this time with a credit hire bill of approximately £400,000!

https://www.lawgazette.co.uk/news/claim ... 73.article

Fortunately, the judge decided the claim was fabricated, so they lost :lol:

The judgment linked to in the article is good for a chuckle, especially around paragraph 26 where the judge unravels the fraud.

The most depressing aspect of all this is that Direct Accident Management and their solicitors, then known as Bond Armstrong, made so much money out of these operations that they floated a company on AIM - Anexo Group plc - https://anexo-group.com/content/about/a ... p#about-us

Whoever it was that said "Ethics is a county in south east England" was entirely correct!

bionichamster
Lemon Slice
Posts: 334
Joined: November 4th, 2016, 10:52 pm
Has thanked: 92 times
Been thanked: 42 times

Re: The scandal of credit hire

#264040

Postby bionichamster » November 13th, 2019, 7:41 pm

I've written to my MP about it on several occasions, but because, unlike whiplash claims, credit hire never makes the front page of the Daily Mail it seems the Government doesn't give a damn


Have you tried writing to BBC watchdog, rogue traders, or someone like Martin Lewis. Seems like the sort of thing some of these tv crusaders like to get their teeth into. I’m sure you could write quite a convincing case for them investigating it. Got to be worth a try....

Bh


Return to “Legal Issues (Practical)”

Who is online

Users browsing this forum: No registered users and 8 guests