You’ve recently moved house and have decided to go out for the day. On your arrival home you find to your horror and bewilderment that your new house is boarded up, the locks changed and a notice pinned to the door informing you you’re your property has been repossessed. You’re up to date with your mortgage payments, the tax man is happy, your loans and credit cards are paid, what’s gone wrong?

A panicky phone call reveals the terrible truth. Your home, your new house, the biggest investment of your life, is still owned by the previous occupier’s mortgage lender. It seems they left without settling the mortgage, and now the property has been repossessed due to the fact it is still subject to an outstanding finance agreement.

Thankfully, when we undertake a conveyance, there are safeguards in place to stop this happening. Searches pick up charges on properties, and lenders refuse to release funds until they are settled and they have first charge. Solicitors and conveyancers will oversee the whole process and prevent exactly this sort of situation developing. Of course, there will always be those brave individuals who conduct their own house sale, but even then protocols have to be adhered to which contain inbuilt safeguards.

So imagine the outcry if one in three houses sold were still owned by the previous occupier’s mortgage company. Somehow it seems that when it comes to cars this alarming statistic is not far from the truth. 30 out of every 100 used cars checked by HPI, the vehicle information organisation, are shown to be subject of outstanding finance agreements relating to previous owners.

“A vehicle on hire purchase or a lease agreement still technically belongs to the lender, and if that loan remains unpaid when an unwary consumer buys the car from the person who took out the loan, the lender has every right to take ownership of it. This obviously leaves the buyer substantially out of pocket,” explains Nick Lindsay, director of HPI. “We are urging car buyers to be more cautious when purchasing a used vehicle. Checking with us first will help buyers avoid this all too common problem, which is sadly on the increase.”

And it isn’t just finance you should be worried about – checks revealed that over 40 per cent of all used cars had information that could threaten the car’s value, title and safety. A number plate change, where registration plates have been altered or changed to conceal a vehicle’s past is a favourite, along with the old favourite, clocking. Don’t be deceived by your digital display – clocking is actually on the increase, affecting the value of the vehicle and veracity of the alleged ‘full service history’.

You also can’t assume that HPI checks are only of use for private sales. Despite the fact that most manufacturers include HPI vehicle registration checks as part of their approved used car programmes, never assume that every used car on a forecourt has been HPI checked. Before you make a purchase, ask to see a dealer's HPI certificate. If they’re unable to produce one, then get a check done to be on the safe side.

Garages have to comply with a mass of legislation, and this past week has seen two new codes introduced. One, the Unfair Commercial Practices Directive (UCPD) provides better protection for the consumer. The Directive harmonises unfair trading laws across all EU Member States, and introduces a general prohibition on traders not to treat consumers unfairly. This prohibition is intended to act as safety-net consumer protection legislation. Under the directive businesses must not mislead consumers through acts or omissions, or use pressure-selling techniques.

The second code is voluntary at present, but it is hoped it will become the gold standard for service throughout the industry. Any UK garage can sign up to this voluntary code, which is currently progressing through the Office of Fair Trading (OFT) Consumer Codes Approval Scheme (CCAS). To comply with the code, a business will need to commit to meet the requirements for completing service and repair work whilst engaging with their customers.

The code aims to promote and safeguard the interests of consumers by helping them identify subscribing garages, and providing an easily accessible and robust dispute resolution mechanism when required.

“We want to see unnecessary and unfair practices driven out of the motor industry service and repair sector, and the Code aims to do exactly that,” said Alec Murray, chairman of the Retail Motor Industry Federation. “The commitment already shown by the trade is an early confirmation of its willingness to address the poor image consumers have of the garage business. Most will have no difficulty in meeting the code requirements and the fact that it is so affordable makes it a ‘must have’ business tool.”

It might seem like more bureaucracy designed to bog down the overworked garage, especially the small trader, but the chances are that, if they have been doing their job properly all along, the transition to an approved trader or garage should be reasonably painless.

“These statistics are a wake-up call for all used car buyers – first timers and knowledgeable traders alike,” concludes Nick Lindsay.“ Our statistics underline the ongoing trend in vehicles with hidden problems, which reflects the dangers motorists face when buying from private vendors. These figures highlight a number of areas buyers need to be especially wary about, but a check can show the difference between buying a banger or a bargain.”