You bought a car. A few weeks later you receive a notice from a lender — a bank, finance company, or credit union — saying their security interest in the vehicle is registered on the Personal Property Securities Register (PPSR). The previous owner never paid out their loan. The lender can repossess your car to recover the debt the seller still owes.
This is one of the most damaging things that can happen in a private or unscrupulous-dealer car sale. The fix is a sequence of urgent legal steps.
What the law actually says
Under the Personal Property Securities Act 2009 (Cth), if you bought from a licensed motor dealer, you generally take the car free of any prior security interest — even if you didn’t check the PPSR. Dealer sales transfer clean title by default.
If you bought privately, your protection depends on whether you searched the PPSR before paying. If you searched and the registration wasn’t there, you take clean title. If you didn’t search, the security interest survives — meaning the original lender can recover the vehicle.
Either way, the seller has wronged you. They sold you a vehicle they didn’t have clear title to. The remedy is against the seller, not the lender.
Why a Cease and Desist is the right opening move
A Cease and Desist letter to the seller serves multiple purposes simultaneously:
- Demands they pay out the finance immediately so the security interest is discharged and the lender can’t repossess
- Demands they cease any further sale of vehicles they don’t have clear title to (relevant if it’s a dealer)
- Demands a refund of the purchase price if they refuse or can’t clear the title
- Establishes the formal legal record for either tribunal action or referral to police if the conduct was fraudulent
- Triggers the seller’s professional indemnity insurance if it’s a dealer — this is often what gets the matter resolved
What Claim Done’s C&D covers
- The vehicle (make, model, VIN, registration)
- The PPSR security interest details
- The seller’s representation that title was clear (whether explicit or implied by the sale itself)
- Citation of the Personal Property Securities Act 2009 and the Australian Consumer Law
- Demand for immediate payout of the financed balance OR refund of the purchase price
- Deadline (typically 14 days for action)
- Escalation pathway — fraud referral, tribunal action, motor dealer licensing complaint
Flat $79. Sent on your behalf to the seller.
If the seller doesn’t act
The next step is a tribunal application or court claim for the full purchase price plus damages. If fraud is involved, a referral to your state police vehicle-crimes unit. Both paths are stronger when you have a documented C&D in the file.