Customer not party to loan agreement so had no basis to complain about car’s repossession

Categories:

Service problems, Lending,

Summary:

In 2017, Elowen’s partner bought a car using a loan from their bank and used the car as security. The loan was in Elowen’s partner's name only. He subsequently transferred ownership of the car to Elowen, and she continued to use the car for more than five years.

Published:

September 2024

In 2022, they separated. Soon afterwards, the bank became aware the car was no longer in the possession of Elowen’s partner and repossessed it. The repossession agent mistakenly told Elowen she could have the car back if she repaid the loan in full. Elowen complained that the bank had wrongfully taken the car from her and that it had refused to allow her to repay the loan or have the car back after she had organised alternative finance.

Our investigation

We reviewed the loan and security agreements. Both were between Elowen’s former partner and the bank. We told Elowen we could only consider disputes between banks and their customers. The bank had not provided any banking service to Elowen. She had simply taken over ownership of the vehicle, but the lending and security agreements remained between the bank and Elowen’s former partner. The transfer of the car’s ownership did not change this fact, and nor did any comments made by the repossession agent, as the bank’s agent.