More than 30 lessors ripped off in
scam still under police investigation
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A total of 33 leasing companies were
ripped off to the tune of £30 million (€35.2 million) in a
particularly complex scandal – the full details of which have never
been unearthed – involving a company called Gwent Fleet
Management.
In recent weeks, ING Lease UK reached a
settlement in the case that involved customers buying cars from
Gwent, which then sought finance for the same assets from the
leasing companies.
Dealerships that delivered the vehicles to the
customers issued invoices to Gwent, which, in turn, forwarded them
to the leasing companies.
Details of the scam emerged when Gwent entered
administration in recent months. Its managing director, Brian Webb,
is the subject of a police investigation.
In all these cases, the leasing company claims
it has title to the assets and that the consumer owes it the
monthly rentals. However, the consumer, having paid for the assets,
which are always cars in this case, believes it has title to the
goods.
Many of the claims so far have been brought by
the lessors against the consumers. However, in a recent case, the
claim by ING Lease UK was brought not against the consumer, but
against a dealer – Swansea-based Trainer BMW – which was
involved.
In the case in question, a Mini Cooper, which
the consumer believed it had purchased from Gwent, was delivered by
Trainer BMW well before the dealership had received the purchase
price from ING.
The lessor, in turn, believed it was
purchasing a vehicle for hire purchase to Gwent.
ING argued that, as a result, title had
already passed to the consumer and, as such, there had been a total
failure of consideration on the part of the dealer.
Furthermore, the original sales invoice from
Trainer to Gwent had been tampered with, with the name of the
company to whom the invoice was made out having been manually
amended to state ING rather than Gwent. Consequently, ING argued
that the sale contract was void and that they had paid by
mistake.
The case eventually settled on favourable
terms, with Trainer paying a proportion of the value of the Vehicle
to ING. The case was closed without any admission of liability on
the part of Trainer, which was keen to reach a sensible commercial
resolution.
The finding is a development on the judgment
reported in the March issue of Leasing Life, in which
Weatherbys Finance Ltd received an out-of-court settlement from WK
Plasterers, a third-party SME that had unknowingly been sold a
vehicle purchased fraudulently by Gwent.
