Lenders can’t repossess items from you without following the correct process.
Getting a repossession warning notice in writing
The lender must give you 15 days advance written notice (from when you receive it) to pay them the money you owe. This notice must include:
- your full name and contact details
- the lender’s details
- the date of the credit contract
- enough detail to identify the goods
- details about how you breached your credit contract with them
- how the issue must be fixed
- notice that the lender will repossess the items if the issue isn’t fixed.
The lender may act without issuing a written notice if they believe the items are at risk of being destroyed, damaged or removed. You can challenge this, eg seek damages or an injunction, if you don't believe they followed the correct repossession procedure or had reasonable grounds to act.
You can also voluntarily hand over the secured goods if you don’t wish to pay. This terminates the credit contract, and the post-possession rules then take effect.
Collecting your items
Only licensed repossession agents can do repossessions, and only between 6am and 9pm Monday to Saturday. They can’t repossess anything on Sundays or public holidays, unless they have written consent from the debtor. If they arrive outside these times without your consent, you can refuse to let them into your home and ask them to leave. If they refuse to leave, you should call the Police.
They must give you a copy of:
- the repossession warning notice
- the credit contract
- their authority to act on the lender’s behalf (if they are a repossession agent)
- their repossession agent’s licence or certificate of approval (as an employee)
- a statement of their entry, the date, and the list of possessions to be taken
- a statement of your rights after repossession, and your right to complain about the conduct of the repossession agent.
If you pay the agent the money you owe, including the cost of repossession, they won’t take the items. Make sure you get a receipt if you do this.
If no one is home and the credit contract authorises them to enter, they can enter your house and take the items. They must:
- do as little damage as possible
- not leave your house obviously open
- leave a notice stating that they entered your house, and noting the items they took
- leave copies of the documents listed above.
After your items are repossessed
The lender cannot just sell your belongings. They must give you a post-possession order within 14 days (or 18 days if they send a letter by post).
The post-possession order should say you have 15 days to either:
- pay the arrears and any reasonable repossession costs, then carry on with your credit contract
- settle the contract by paying off all the money you owe
- sell the items at the current values set out in the notice
- find someone to take over paying the contract.
If you can pay the money you owe, you'll get your items back and/or the contract will continue. You can get an independent valuation of repossessed goods.
Selling your repossessed items
If you can't pay or find a buyer within 15 days, the lender can sell the items.
They can only recover money already loaned to you, but not any accrued fees, charges or interest. If they sell the items for more than what you owed, you should be refunded the extra. Sales must be commercially reasonable and done by auction, public tender or private sale. If the lender doesn’t hold a sale within 30 days, you can require a sale by auction.
After the sale
Within 7 days of the sale, the lender must give you a written statement showing the sale proceeds, any sale costs, any outstanding amounts and the balance owing. No further interest, fees or collection costs can be added at this point.
If they sell the items for less than what you owe, you'll still have to pay the lender the balance, but they can't add any further interest or fees.