Fleet News

Firm helps fleets avoid ‘unfair’ end-of-contract charges

Row of parked cars

Damage Reclaim, a no win, no fee start-up, is targeting fleets that are in dispute with their leasing companies over end-of-contract vehicle charges to help the fleets win money back.

Initially, the company, which was launched 12 months ago, was primarily focused on the rental industry working with consumers, but is now turning its focus to the fleet market.

Dean Miles, managing director of business management consultants Damage Reclaim, told Fleet News the business was formed after its founder was charged more £1,000 by a leasing company, which he felt was unjustified.

Miles explained that, after seeking advice from somebody working in the leasing industry, he went back to the company and it admitted there was failure in process and some of the charges were unjustified.

“The damage invoice was reduced and further negotiation ended with the bill to zero as a gesture of goodwill,” said Miles.

Damage Reclaim takes a 30% cut if successful. It is currently working with a blue-chip fleet facing more than £300,000 in end-of-contract charges. 

On average, end-of-lease charges are reduced by £350 per case – and the biggest win to date was a reduction from £1,560 to £0.

The trade body representing the leasing industry, the British Vehicle Rental and Leasing Association (BVRLA), publishes a fair wear and tear guide to provide an industry-wide, accepted standard for when vehicles are returned by fleets to their leasing or rental company.

The guide is reviewed every three years. The last review saw the introduction of a new rule that leasing companies have to inform customers of any end-of-contract charges within four weeks of the car being collected.

BVRLA chief executive Gerry Keaney said: “The BVRLA and its members are always looking to improve the end-of-contract process.”

He told Fleet News that the guide also provides advice for best practice in vehicle maintenance and upkeep that aims to prevent unacceptable wear and tear from occurring.

“The association also provides training to complement this guide and sets out the end of contract standards it expects from members in its codes of conduct,” Keaney added.

The wording used in the code was changed to make it easier to read, and a number of the standards were strengthened to improve transparency for customers.

Miles said: “We know there are some leasing companies that take a fair approach, but there are also those that are the main offenders. This shouldn’t be a grey area.

“Don’t get us wrong, many charges are fair and reasonable and we accept them where a vehicle has been neglected rather than fair wear and tear.

“If we didn’t value the relationship of our client with their leasing company we could refer every case to the BVRLA or Financial Ombudsman Service (FOS), but we deal with every claim on its individual merits and only escalate to an arbitrating body if we don’t get a fair outcome.”

Damage Reclaim has a UK-based team of eight but also works with six freelance claim handlers to help as the business grows.

Miles said: “We respect the BVRLA and the job it does in governing and bringing structure to the industry. However, we still see examples that are unfair and we are here to try and right those wrongs.”

Miles said the accusation that the company is an “ambulance chaser” is something that has already been thrown his way. He said: “We’ll only accept claims if we feel the consumer or company have been treated unfairly.

“We have many claims which we don’t progress as we know the charge applied is fair and reasonable, but many are just blatantly profiteering.”

A fleet manager who preferred to remain anonymous said Damage Reclaim may be of use to fleet managers who are not knowledgeable of the BVRLA guidelines and don’t fully understand damage and its value in terms of recharges.

However, he insisted that the problem with the BVRLA guide is that it is too open to interpretation. “To quite a large extent it comes down to a matter of opinion and rarely do the lease companies/fleet managers agree on the subject,” he said.

 

 

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