VBDR2500 - Payments: Treatment of payments for repossessed goods

When businesses supply goods under hire purchase or similar arrangements they may retain the right to repossess the goods. Additionally customers may have rights, either under the Consumer Credit Act 1974 or where the agreement specifically provides, to end the agreement by voluntarily returning the goods.

Where goods are either repossessed or voluntarily returned, there may be entitlement to a Regulation 38 reduction to the original value, as illustrated in the General Motors Acceptance Corporation UK Ltd (GMAC) case (2004 STC 577).

The possibility of a bad debt relief claim only arises where the customer has defaulted. VBDR3600provides further guidance on bad debt relief claims by finance companies.