Lost £27k credit hire claim exposes industry’s ‘dubious practice’

A county court ruling rejecting a £27,000 claim for credit hire has uncovered what the judge called a ‘dubious and suspicious’ practice employed by companies in the claims chain.

Deputy District Judge Printer, sitting at Portsmouth, said the otherwise legitimate claimant in McNally v Aviva Insurance Limited had been hoodwinked into believing he was speaking to his insurer and arranging free car hire.

In fact, due to what has been dubbed as ‘Google advert spoofing’, McNally unwittingly contacted a claims management company which referred him to a credit hire organisation called Spectra Drive Limited.

The judge found the accident victim honestly believed he was speaking with his insurer and did not realise he was being misled. The victim spoke to Spectra Drive and believed he was signing documents that permitted him to have a courtesy car. Based on what he was told, he had no worry about incurring charges and the term ‘credit hire’ meant little or nothing to him. The judge said the company McNally was speaking to allowed the conversation to continue and the transaction to proceed knowing its position ‘was not truthful’.

Of further concern was that the claimant signed a blank document which the judge suggested was completed by someone at Spectra Drive – a practice he described as ‘dubious and suspicious’ and which undermined the whole transaction.

The judge ruled the credit hire agreement for an estimated £27,000 was ‘wholly unenforceable’ and did not represent any form of contingent liability to McNally.

The costs hearing was adjourned to March so it could be heard by the same judge who heard the trial. The credit hire charges will, effectively, be unpaid and written off.

Following the trial, Fraser McAndry, partner at defendant firm Keoghs, which represented Aviva, said innocent motorists who believe they are contacting their insurer via a Google search are at 'huge risk'. This can lead into their being misrepresented and potentially being liable for thousands of pounds in charges.

McAndry added: ‘Unfortunately Keoghs deal with many hundreds of suspicious credit hire claims each year and I fear many other motorists will fall into the trap and potentially face paying huge fees if they don’t take the necessary precautions.’

The Gazette has contacted Spectra Drive for comment.