KUALA LUMPUR, 17 Nov 2017:
Vehicle owners who lease or sell their cars to third parties – to continue the loan instalments – without the knowledge and consent of the issuing financial institution are in breach of the Hire Purchase Act 1967 and can be subjected to legal action.
The Home Ministry in a written reply dated Nov 15, distributed in the Dewan Rakyat, said such an act (leasing or selling for continuation of the instalment) could also cause the vehicle owners to be blacklisted by banks.
“The ministry is aware of cases where the loans are continued as a solution for the car owners as they can no longer keep up with the instalments and cases of car owners who lease their cars to a particular company to make profits from the leased vehicles.
“Problems arise when the monthly instalments for the cars which have been sold or leased are not paid,” the ministry said in reply to a question from Lim Lip Eng (DAP-Segambut), who wanted to know about this fraudulent loan extension scheme.
According to the ministry, such cases could not be categorised as stolen car cases as they do not meet the elements of theft as described under Section 378 of the Penal Code.
However, if there were elements of fraud, police investigations would be carried out under Section 420 of the Penal Code or other Acts, the ministry added.
– Bernama