Motorhome dealers, no better than a second hand car sales

[Robinhood]

Brian Kirby - 2011-11-25 9:18 PM

 

I had always been under the impression that a liquidator had the right to call in any such payment, because it related to a pre-existing contract and would form part of the firms assets. Clearly not. Any idea what the costs are? One would have thought a reputable firm might offer its clients that kind of security as a sign of goodwill on its part. You link implies that the costs are not that great. They might even benefit from taking a higher than usual deposit, given the security provided, although I suppose the risk of losing his deposit in through sudden illness, or death, might make that unattractive to the client. Still, there must be insurance provisions that could cover that, as well.

 

I can't really give much more of an opinion, other than to echo your feelings that (at least in a period with a high rate of business failure) some better way of doing business that appears to be, at least relatively, straightforward would be quite sensible. I've certainly heard in the past of motorhomes being sold by a dealer on a commission basis via an escrow-like agreement, but don't have any details.

 

As I say, my experience is in a slightly different, but parallel area, and is on an industrial scale where there are agents readily available, and cost is (proportionally at least) less of a problem.

 

Personally, other than any on-cost, I can see little downside for either party (the dealer obviously doesn't get the deposit up-front, but this might well be offset by the willingness of customers to trade on a lower-risk basis - ultimately, I don't think the risk of losing the deposit through ill-health or death is any different for either party - as long as the agreement is drawn up accordingly - and let's face it, this is the fundamental purpose of escrow).

 

As I say, it isn't my specific area of expertise, but I think it might be best worded as an "option to buy", with a cost of rejecting that option to buy once it comes to fruition. Hence, no money paid up front, full purchase cost, or cost of rejection (equivalent to the deposit) to be paid at the defined handover point, and the cost of rejection to be deposited into escrow up-front. It would be sensible to time-limit the agreement (another issue that arises in standard contracts).

 

I can't see that anyone (other than the buyer) could pursue the escrow money in a liquidation situation, as it isn't due, and there has been no service given for it (after all, they can't pursue the balnce, can they?)

[Rayjsj]

After all that, I think that in future I will only purchase an 'In Stock' new Motorhome, leave NO deposit Purchase it the same day, and get a bill of sale to prove that the vehicle is MINE, before leaving it for it's PDI or have any extra's fitted. No way would i fancy the ordeal of fighting an official receiver for a deposit i had paid or a van i had already purchased. Not a happy state of affairs. :-S Ray

[flicka]

I am in fell agreement with Brian, regarding the name & shame posts.

 

A typical recent example is various reviews posted on TRIPADVISOR website, regarding Hotel / B&B owners suffering loss of business through derogatory postings.

In one instance, a B&B owner was able to verify one such derogatory post which was created by a person who had written a glowing reference in their Visitors book.

 

Despite the odd rogue out there, the vast majority of businesses are trying to provide a service to their customers (abeit some betters than others, but that will always be the situation) & not out to dupe them.

 

In almost all instances of Liquidation or Administration, the front of house Sales Staff will not be fully aware of their Employers financial vunerability, until the proverbial hits the fan.

Even those employees who may have an inkling or concerns, will generally be making more efforts hoping to turn the situation around by improving Sales volumes, etc. & trying to safeguard their futures.

 

 

[Derek Uzzell]

Brian Kirby - 2011-11-25 9:57 PM

 

Postnote, you are a one-note! :-)....

 

 

My earlier description is decidedly more apt - 9th posting (29 May 2011) of the following link.

 

http://www.outandaboutlive.co.uk/forums/forums/thread-view.asp?tid=21992&start=1

[Rayjsj]

Flicka,

I'm afraid my sympathy is with the Motorhome/caravan buyers that have lost their Deposits, NOT the dealers who have gone Kaput ! taking their customers money with them.

I am sure (i hope) that the Discover salesmen at the NEC were unaware that they were taking deposits under false pretences, and i am sorry that they have lost their jobs, BUT what a Farce ! at the 'Premium' Showcase for the Industry a large dealer goes down halfway through It. Taking Show goers deposits and giving them to the receivers. To MY eye as close to Blatant FRAUD as it gets !

Someone need to get their Arsxx's kicked and good and HARD. The (ex) Directors of Discover Leisure for a start. ' Someone' knew just how 'close to the edge' they were ! and yet they STILL took up their Stand at the Show !! disgraceful !

>:-( >:-( Ray

 

Sue ME !

[Brian Kirby]

Rayjsj - 2011-11-26 4:47 PM

 

Flicka,

I'm afraid my sympathy is with the Motorhome/caravan buyers that have lost their Deposits, NOT the dealers who have gone Kaput ! taking their customers money with them.

I am sure (i hope) that the Discover salesmen at the NEC were unaware that they were taking deposits under false pretences, and i am sorry that they have lost their jobs, BUT what a Farce ! at the 'Premium' Showcase for the Industry a large dealer goes down halfway through It. Taking Show goers deposits and giving them to the receivers. To MY eye as close to Blatant FRAUD as it gets !

Someone need to get their Arsxx's kicked and good and HARD. The (ex) Directors of Discover Leisure for a start. ' Someone' knew just how 'close to the edge' they were ! and yet they STILL took up their Stand at the Show !! disgraceful !

>:-( >:-( Ray

 

Sue ME !

I don't see any reason why that sentiment should get you sued, it seems entirely reasonable.

 

It is very difficult to see how Discover's directors can not have known they were taking deposits while technically bankrupt, which I had thought was deemed fraudulent. I suppose it may be the case that something outside their control brought about the bankruptcy, such as a creditor unexpectedly calling in a loan, or a supplier refusing to extend further credit. However, even then the directors must have been aware they had the loan, or needed the credit, so must have appreciated the risk of "what if"?

 

So, under the circumstances, continuing to take deposits given in good faith does look very cynical indeed. All the more so when Robin has demonstrated that such payments could relatively easily, and apparently quite cheaply, have been secured to protect their client's money.

 

Being generous, I can understand that any company, having taken a high profile at a major national show, and wishing to continue in trade, would regard refusing to take deposits as tantamount to a public admission of insolvency, but that cannot, IMO, in the absence of some reasonable justification, excuse what was actually done. If there was fraud, it should definitely be punished.

[postnote]

Robinhood - 2011-11-25 9:58 PM

 

I can't really give much more of an opinion,

 

QUOTE]

 

Oh well never mind.. (lol)

[Colin Leake]

They'll be protected of course but if there was any justice in the world some of the directors personal assets should be sold to provide refunds to their innocent victims!

[HymerVan]

Well this certainly has been a lively topic !!

I feel extremely sorry for those customers who have paid and lost deposits. I have paid deposits on my last two vans and have a deposit on my new one, not yet delivered so I understand the risks !

Clearly a credit card payment won't help in many cases.

The option of buying from stock could be a reliable one but depends on a vehicle of acceptable spec being on the forecourt.

I can understand the anger directed at the Directors of an insolvent company. Bear in mind though that in many cases the Directors will have acted properly and done their very best to keep the company afloat often motivated to protect the livelyhood of their workforce as well as their own. Indeed as well as the workforce and customers, the demise of a company is likely to be painful to its Directors who may well have invested cash in the company, made loans, foregone dividends or bought shares.

 

I make no comment on the circumstances surrounding the insolvency of Discover. Only the Directors will know exactly what happened and without that knowledge it is pointless and unwise to speculate.

 

IMO, in the absence of a dividend for ordinary creditors, it is unlikely that any procedures within the insolvency process are available that will put money back into the pockets of deposit payers unless there has been fraud. Even then there would be tricky issues.

For the sake of balance I should say that it is not correct to say that the Directors have no personal liability. In certain circumstances known as "wrongfull trading" they can be personally liable.

In simple terms wrongful trading occurs if the directors have allowed the company to continue to trade when they knew that it was insolvent and therefore have made the position of the creditors worse.

Sadly however I have never become aware of action being successfully taken by a "simple" creditor it would be too complicated and costly with uncertainty of success. In reality any such action would normally be taken by a liquidator or one of the "big" creditors. Furthermore In reality Directors nowadays are normally pretty anxious to avoid the risk of personal liability and take action as soon as they know that the Company is insolvent.

A Liquidator will investigate the circumstances of the demise of the Company and can refer the actings of Director(s) to the Department for Business, Innovation and Skills (formerly DTI). This can result in the Director(s) being disqualified by the Court for a period of time, a sort of badge of disgrace.

Perusal of the Companies House website will show the names of many Directors who have suffered this fate.

I suggest that affected persons keep in touch with KPMG and make their views known !!

 

I haven't posted much good news on this topic or the related one on credit cards.

For those customers who keep there money in the bank because of the loss of deposit risk (and I don't see market conditions getting better anytime soon) perhaps a trade backed guarantee or escrow scheme which "guarantees" deposits would be an answer. This depends entirely on the trade taking this up but it might be worth it not least because it would enhance the reputation of dealers in it.

[postnote]

We all extremely sorry for those customers who have paid and lost deposits or have their motor homes impounded. But somehow I feel that people in the know, such as MMM knew that Discovery were in trouble but kept quite.

This was highlighted in one of my very early posts when a certain person who writes on behalf of MMM was against naming and shaming. Had this been the case maybe some of those customers who have now lost money gone to another dealer.

 

In closing does MMM know of another dealer which is near to going under?

 

[Brian Kirby]

Robinhood has already answered that one one-note. Had folk begun raising doubts over Discover's liquidity earlier, the foreseeable result would have been an earlier failure, merely taking other people's money with them instead. To whose advantage? Have you ever considered thinking before writing?

 

BTW, what gives you the libellous right to assume that anyone who is connected with MMM knew of Discover's problems? Do you assume the MD of Discover picked up the phone to MMM, and sobbed his heart out? You really are an offencive idiot!

 

Where on earth do you get this rot, or does it come from something you are smoking?

[LordThornber]

So...........

 

Our next van will cost us north of £50 K. Therefore..

 

Paying a deposit by Credit card won't protect me.

 

I may well be happy to buy a new "in stock" van (done this twice). Both were under £30K with a card deposit paid. But if not...

 

Would engaging my legal representative be of any use regarding a deposit?

 

I'd rather pay them £x than potentially lose (say) a 10% £5000 deposit.

 

Martyn

 

 

 

 

[postnote]

Brian Kirby - 2011-11-27 8:04 PM

 

Robinhood has already answered that one one-note. Had folk begun raising doubts over Discover's liquidity earlier, the foreseeable result would have been an earlier failure, merely taking other people's money with them instead. To whose advantage? Have you ever considered thinking before writing?

 

BTW, what gives you the libellous right to assume that anyone who is connected with MMM knew of Discover's problems? Do you assume the MD of Discover picked up the phone to MMM, and sobbed his heart out? You really are an offencive idiot!

 

Where on earth do you get this rot, or does it come from something you are smoking?

 

So Brian for someone who once claimed they were not in the pocket of MMM but independent you sure change your tune. Are you telling me and everyone on these forums to your knowledge you and none of your collegues at MMM knew of Discoveries demise? You seem to know everything reading your posts!

 

And, I have never called you names Brian so if you are going to resort to calling me names the at least spell offensive (offencive) correctly you pedantic twerp.

(lol)

[Robinhood]

LordThornber - 2011-11-27 8:26 PM

 

 

Would engaging my legal representative be of any use regarding a deposit?

 

I'd rather pay them £x than potentially lose (say) a 10% £5000 deposit.

 

Martyn

 

 

 

You could engage with your solicitor, and he/she may well be familiar with the workings of escrow accounts (he/she should certainly be familiar with the similar "client account" concept).

 

The following web extract may give you some idea of fees (though the context is probably higher-value transactions).

 

Escrow account services

An escrow account (similar to a stakeholder account) is an account whereby the release of funds is subject to the fulfilment of certain events. It is useful in the sale of property or goods with the money being held until a specified event has occurred.

Escrow accounts can be operated by either reputable finance houses or legally qualified personnel usually either solicitors or notaries. An account will be established whereby an agreement is drawn up specifying the conditions that need to be met prior to money being released. The person operating the escrow account needs to define precisely what authorisation, whether written or oral, needs to be provided and in what form. On the provision of such information or confirmation money is released to the party who will benefit from the account.

The agreement that will be signed on the establishment of an account is a legally binding contract setting out the terms of the particular business transaction for which the money is being paid. The agreement will set out the terms of the transaction and any conditions that require to be met. It will specify how each party will notify the person who is charged with holding the account in order that money may be released. This means that parties to the agreement may be in different countries and can rely on an independent inspection firm or independent verification by a notary or otherwise.

It would be our usual practice for escrow accounts to be operated by a solicitor. This is a representative of the Supreme Court of England and Wales who may give a legally binding undertaking which can be relied upon in court. A breach of an undertaking can result in disciplinary procedures, a fine, the payment of compensation an ultimately being struck off the roll as solicitor and prevented from carrying on ones profession. This is an extremely heavy sanction and no solicitor of any repute would give an undertaking that is not complied with.

Services of a solicitor cost from £200.00 per hr and generally preparation of the contract and working out of the instructions takes three hours (the cost will therefore be from £600.00)

 

Examples:

A person residing abroad wishes to sell a property in his home country. Providing the exact mechanism for the sale is agreed ie. what documents need to be stamped and notarised or otherwise witnessed an escrow agreement can be drawn up whereby on the execution of documents in an agreed manner, money deposited in an escrow account will be released to the seller.

It can also be useful in trading transactions where a cargo has been ordered. Rather than the provision of a letter of credit, money can be deposited in an escrow account and upon the seller fulfilling the contractual terms to the satisfaction of the buyer which may include an independent inspection by SGS or another firm, money will be released to a seller.

 

Of course, the example uses the services of a solicitor, if, as your style denotes, your lordship is retaining the services of a silk, then the charges may well be commensurately higher. :D

[flicka]

Like Robinhood, I have used Escrow agreements in the past for my employer, again for different circumstances, but I also am aware that they can be used for many situations.

 

IIRC there is (or was) an independant UK Escrow depository, who had various standard "contracts" for very reasonable cost. (but sod's law I can't recall their name or find in a google search)

They are more commonly used in the USA than the UK, (but DONT use the American Standard Forms of Agreement, available on the internet)

Also some UK Banks did provide this service, so guess it's worth approaching your bank to see if they can help.

[Brian Kirby]

postnote - 2011-11-27 8:43 PM

 

So Brian for someone who once claimed they were not in the pocket of MMM but independent you sure change your tune. Are you telling me and everyone on these forums to your knowledge you and none of your collegues at MMM knew of Discoveries demise? You seem to know everything reading your posts!

 

And, I have never called you names Brian so if you are going to resort to calling me names the at least spell offensive (offencive) correctly you pedantic twerp.

(lol)

 

Ooops! Apologies. Offensive idiot it is. :-) Not a name, BTW, but a description. A) One who gives offence. B A foolish or stupid person. QED?

 

I think the firm was called Discover? Oh, and "collegue" should be colleague. Touché? Spelling war: 2 - 1, I win. :-)

 

But I'm afraid your reasoning is again flawed. (See B above. :-)) As to who knew what, the first I heard of Discover's demise was on here, in the post to that effect, by Francis Graham, on 14 October. I have no idea what anyone at MMM knew, but can't think of any reason why they would have known before the administrator. What are you suggesting? Come Sir, be plain! Is there a point?

 

My contacts, such as they are, are with the "Interchange" editor, and I have had no reason to discuss Discover with him. Sadly, they didn't write in for advice!

 

Pedantry I'll happily admit to. I understood a twerp was a pregnant goldfish. Do you spend a lot of your time knowingly writing to goldfish? B above, again, I'm afraid. :-D

[postnote]

Brian Kirby - 2011-11-28 12:19 AM

 

postnote - 2011-11-27 8:43 PM

 

So Brian for someone who once claimed they were not in the pocket of MMM but independent you sure change your tune. Are you telling me and everyone on these forums to your knowledge you and none of your collegues at MMM knew of Discoveries demise? You seem to know everything reading your posts!

 

And, I have never called you names Brian so if you are going to resort to calling me names the at least spell offensive (offencive) correctly you pedantic twerp.

(lol)

 

Ooops! Apologies. Offensive idiot it is. :-) Not a name, BTW, but a description. A) One who gives offence. B A foolish or stupid person. QED?

 

I think the firm was called Discover? Oh, and "collegue" should be colleague. Touché? Spelling war: 2 - 1, I win. :-)

 

But I'm afraid your reasoning is again flawed. (See B above. :-)) As to who knew what, the first I heard of Discover's demise was on here, in the post to that effect, by Francis Graham, on 14 October. I have no idea what anyone at MMM knew, but can't think of any reason why they would have known before the administrator. What are you suggesting? Come Sir, be plain! Is there a point?

 

My contacts, such as they are, are with the "Interchange" editor, and I have had no reason to discuss Discover with him. Sadly, they didn't write in for advice!

 

Pedantry I'll happily admit to. I understood a twerp was a pregnant goldfish. Do you spend a lot of your time knowingly writing to goldfish? B above, again, I'm afraid. :-D

 

Thank you Brian and I accept you apology with dignity. (lol)

 

Oh Brian you are right again, it was Discovery Leisure, you are right again. You’re on a roll now, however I must stop your glory roll. *-)

 

I feel you must read the aquatic dictionary a lot to come to the conclusion a ‘twerp was a pregnant goldfish’; they also use the words twit or idiot. :D

 

What I meant to say in my post was that you came across reading your posts as pedantic twerp but not a idiot as that would be rude of me. :D :D

 

My Koi Carp suggested I checked twerp in the Collins dictionary which I did. And low and behold means a silly, weak-minded, or contemptible person. Is that you Brian? (^)

 

Anyway at the end of the day, in answer to my original post, Motorhome dealers, no better than a second hand car sales the answer must be a resounding yes as they know their company Discover was going down the pan and still they took customers money. >:-( >:-(

[Derek Uzzell]

http://www.flayme.com/troll/#Concern

 

Need I say more?

 

(That's a retoticcall questun insidently...)

[HymerVan]

Martyn and Robin both appear to be enthusiastic about an escrow arrangement. In theory so am I but as I have said already I fear that there may be difficulties on account of dealer resistance or inability to set up a reliable and practicable arrangement at reasonable cost. One of the difficulties is that a dealer will not want to go outside their own terms and conditions of trade because however badly drafted, cribbed from another dealer or cobbled together they may be, they will at least be familiar to the dealer, a sort of "comfort blanket" which the dealer won't want to release. Anything different will be perceived to have the potential to cost the dealer money in legal fees or otherwise and/or have potential legal pitfalls. If the dealer is willing to consider an escrow agreement it will take time to set up (you may be amazed how long ) and the dealer will almost certainly build in a margin in the deal price to cover this cost/risk.

That said I support exploring this avenue. I also support solicitor involvement. However before getting carried away I suggest that you have a quick word with a "friendly solicitor". (This is not intended to be an oxymoron). Hopefully if you have a good relationship with a solicitor you should be able to have a fairly brief diagnostic chat without incurring cost or any rate significant cost. That exercise should allow you to establish feasibility and/or ballpark costs. There is little point in incurring any significant cost unless and until you know a dealer will agree in principle to an escrow arrangement.

I will be very interested to hear how you get on

 

[HymerVan]

What happened to moderation or indeed Moderation ?

[Robinhood]

HymerVan - 2011-11-28 9:28 AM

 

Martyn and Robin both appear to be enthusiastic about an escrow arrangement.

 

I'm "enthusiastic" mainly in the context of it potentially providing a way round a problem which is (at least perceived as) growing.

 

I don't underestimate the difficulties of achieving such an arrangement, and am much in agreement with the rest of your post (and in fact, think that I've posted in that fashion :-) ).

 

I think that there is rather an irony about the situation, however. When times are hard, and the banks aren't lending, then for many firms cash-flow is everything. So, just at a time when the risks might be assessed as higher, a dealer may be considerably less willing to consider an arrangement that does not immediately put money in his bank. :-S

[Brian Kirby]

postnote - 2011-11-28 2:55 AM

 

................................... And low and behold means a silly, weak-minded, or contemptible person. Is that you Brian? (^)

 

Anyway at the end of the day, in answer to my original post, Motorhome dealers, no better than a second hand car sales the answer must be a resounding yes as they know their company Discover was going down the pan and still they took customers money. >:-( >:-(

Good. Now that we've evened the score, I'll try to answer (kind of) you question. Is that me? To you, it seems it must be so. I am content with that. Amen.

 

To the question implied in your title for this string, I gave my answer, at some length, on the first "page". I'm sorry you found out the hard way that dealers are not all that they should be. However, that should not be taken to mean that all dealers are bad, or that, by extension, all of the motorhoming press, or even parts of it, are in cahoots with them.

 

I learnt pretty much all of what I know about motorhomes and motorhoming from people on this forum, and from MMM. The knowledge so gained has at times proved invaluable. So, rather than merely asking questions, as I learnt, I began to answer other peoples' questions. I saw, and see, that as a bit of constructive giving back, as a recompense for the freely given information from which I have benefited. A few years back I was asked, by its then editor, if I would be willing to contribute to MMM Interchange and, in the same vein, was happy to do so. So far as my connections with MMM go, that is about it. That is far more about me than you need to know.

 

I have met other MMM contributors, and a few of the writers, on about four occasions, at Warner's shows. From those few contacts, I know your allegations of bad faith on their part exist only in your imagination. A more independent minded, and less "corporatist", bunch you could not hope to meet. Stick around. Listen and learn. Most of us, when we can, try to help other motorhomers. That is mainly what MMM is about, and it is where this forum started out. Mutual help. Try submitting the odd post of use to others from time to time, instead of merely self-centred and destructive tripe, and who knows where it may lead? Somewhere useful, I hope. Go in peace.

[derek pringle]

Hi,

I find this posting very interesting but it does not seem to suggest much that can make the situation better for all concerned. Seems to me the same position could arise tomorrow with any other company and more people would be affected [god willing it wont].

I believe the limit of protection level is set too low at £35k as we all know most vans now cost north of this figure. Would it not be possible for one of the bigger Motorhome insurers,or other institution, to set up an indemnity scheme were for a reasonable premium the difference between the protected 35k and the purchase price is covered. Obviously this would mean the insurance company being satisfied as to the soundness of the business selling the Motorhome to the customer, in order to assess the risk,which in itself could lead to more transparency in the industry.

Just a thought, please point out the flaws but no need to shout at me haha

cheers

derek

[Rayjsj]

I agree with you entirely Derek, they will have to do something like you suggest, as who now will pay a Dealer a largish deposit on a required van. There are obviously some 'gamblers' out there, but not That many.

For me,as i have already said, No deposit , cash(debit card) in exchange for 'Bill of sale' and Log book (although i know this is not 'proof of ownership'). Ray

 

appears trust has gone,and we are back to 'Let the buyer beware' !

[HymerVan]

In response to Derek

A trade based initiative to protect deposits would seem to me to be the best way forward in the present climate potentially giving buyers and sellers what they want.

Whether a protection scheme is insurance based based on escrow or whatever I am relaxed about so long as it worked and was backed by sufficied funding etc.

I THINK that the limit for credit card protection is still £30K not £35K. I doubt in the present climate if the banks would be keen to extend the figure but many new Vans are costing £50K + so a big increse would be needed.