A devil’s deal

Tony bought a car with a loan. The car was later repossessed and sold by his finance company. However, the proceeds from the car’s sale did not cover the outstanding amount on Tony’s loan.

Sometime after, Tony bought a second car with finance. He was shocked to find out that the finance company also held a security interest on his new car.

Tony complained to FSCL to check whether or not the finance company could register its interest in his second vehicle. While Tony acknowledged that he still owed the finance company money, he believed it was against the law for the finance company to register their interest on his car without his consent. Tony referred to the Personal Property Securities Act 1999, which states that a debtor or guarantor must specifically ‘appropriate’ such goods to the loan. Tony asked that the finance company’s security interest be removed.  

Tony also complained that he had asked the finance company for a detailed statement to analyse the payments he had made to date. However, the finance company would only provide him with a summary.



Upon review, we noted that the interest in Tony’s car had been registered in 2013 before the amendments to the Personal Property Securities Act 1999 (in relation to the appropriation of after-acquired property) came into force in 2014. It followed that the finance company was able to also hold a security interest in Tony’s second car. The legislative amendment in 2014 could not invalidate the security interest already registered in 2013. The finance company’s interest in Tony’s car continued until his debt was paid.



Tony was advised to seek independent legal advice and agreed to discontinue his complaint.

The finance company contacted Tony to arrange a repayment schedule for his loan that he could agree to.


Key insights for the participant and the consumer

Reforms to the Personal Property Securities Act 1999 in 2014 means that finance companies can no longer register their interest in a debtor’s subsequent assets without the debtor’s consent to “appropriate” or add these to the loan agreement. However, this will not affect finance loans and interests registered prior to 2014.