Team-BHP - View Single Post - What gives loan companies the right to make customers sign blank RTO forms?

dobriyal · 27th June 2008, 14:33

I recently bought a Palio. I had wanted to go for loan for about 30% of the value. The showroom, of course, was ready with an offer from Tata Motor Finance. The executive was courteous, worked out an "attractive deal" for me and made me feel at home.

All was well till the point I was given the contract document to sign. Unlike many other customers (possibly) I started reading the contract document. The contract itself was short, but I was shocked to find that every imaginable RTO form was bound to the contract and I was supposed to sign all of them ... blank. Blank forms for:

Applying for duplicate copies of registration
Applying for re-registration
Selling the car to ...!
Etc. etc.

I asked them the obvious and got an obvious answer: These are required for "due diligence".
"Of course, but what is the legality of this process?"
"All banks to it. This is according to RBI guidelines."

RBI Guidelines?! Whose side is the RBI on? Probably that's what they said when they gave the rights to their 'gundas' to snatch vehicles from customers. Now with the rap from the courts, here's an innovative way of 'goondagiri'. Pile the law against the customer so that they can get speedy 'justice' in case of default.

Wait a minute. That statement sounds very fair. But here's the reality. If you default, or if the loan company's manager/employee/whoever is unhappy with you:

They can register the vehicle on someone else's name and put you in jail for possessing the vehicle without the owner's consent
They can do this the very next day after you got delivery of the vehicle and you would also loose all the money you paid as down-payment
They can steal the vehicle, instead of snatching, and you will never be able to claim anything because they would have already re-registered the vehicle on someone else's name
They can again put you in jail because their contract says that they have the right to encash all the cheques at any time they like. So the cheques will bounce whenever Mr/Ms X is unhappy with you for being a bad customer or (technically) even for being a bad neighbor

So, what's better? The old way - to let the goons give us two jabs and snatch our cars/bikes from us, or the new way - to let the goons with white collars steal our vehicles, drag us to court for "stealing their vehicle" (because it is already registered on someone else's name), and drag you to court again for bounced cheques.

I prefer none, so I did not take the finance. I did try HDFC too and they told me about the same requirements. So, the whole damn system is the same and I don't buy it. I had the option of chucking the option of finance but most of us don't have it. And most of have been signing these forms (I don't know whether it's legal or not) for months and years. We can't change the system on our own, but united we possibly can. Let us all shout about the issue and refuse to sign the dotted lines as much as we can. Any suggestions? Could someone shed some light on the legality of this process?

[I confess that I dropped the idea of finance almost immediately and haven't explored all options. Therefore, any suggestions for the benefit of future loan takers would be great.]

27th June 2008, 14:33	#1 (permalink)
dobriyal Newbie Join Date: May 2008 Location: Pune Posts: 10	What gives loan companies the right to make customers sign blank RTO forms? I recently bought a Palio. I had wanted to go for loan for about 30% of the value. The showroom, of course, was ready with an offer from Tata Motor Finance. The executive was courteous, worked out an "attractive deal" for me and made me feel at home. All was well till the point I was given the contract document to sign. Unlike many other customers (possibly) I started reading the contract document. The contract itself was short, but I was shocked to find that every imaginable RTO form was bound to the contract and I was supposed to sign all of them ... blank. Blank forms for: Applying for duplicate copies of registration Applying for re-registration Selling the car to ...! Etc. etc. I asked them the obvious and got an obvious answer: These are required for "due diligence". "Of course, but what is the legality of this process?" "All banks to it. This is according to RBI guidelines." RBI Guidelines?! Whose side is the RBI on? Probably that's what they said when they gave the rights to their 'gundas' to snatch vehicles from customers. Now with the rap from the courts, here's an innovative way of 'goondagiri'. Pile the law against the customer so that they can get speedy 'justice' in case of default. Wait a minute. That statement sounds very fair. But here's the reality. If you default, or if the loan company's manager/employee/whoever is unhappy with you: They can register the vehicle on someone else's name and put you in jail for possessing the vehicle without the owner's consent They can do this the very next day after you got delivery of the vehicle and you would also loose all the money you paid as down-payment They can steal the vehicle, instead of snatching, and you will never be able to claim anything because they would have already re-registered the vehicle on someone else's name They can again put you in jail because their contract says that they have the right to encash all the cheques at any time they like. So the cheques will bounce whenever Mr/Ms X is unhappy with you for being a bad customer or (technically) even for being a bad neighbor So, what's better? The old way - to let the goons give us two jabs and snatch our cars/bikes from us, or the new way - to let the goons with white collars steal our vehicles, drag us to court for "stealing their vehicle" (because it is already registered on someone else's name), and drag you to court again for bounced cheques. I prefer none, so I did not take the finance. I did try HDFC too and they told me about the same requirements. So, the whole damn system is the same and I don't buy it. I had the option of chucking the option of finance but most of us don't have it. And most of have been signing these forms (I don't know whether it's legal or not) for months and years. We can't change the system on our own, but united we possibly can. Let us all shout about the issue and refuse to sign the dotted lines as much as we can. Any suggestions? Could someone shed some light on the legality of this process? [I confess that I dropped the idea of finance almost immediately and haven't explored all options. Therefore, any suggestions for the benefit of future loan takers would be great.]