Irresponsible Lending and Settlements

*Chattie*

Could the OP define irresponsible lending please.

sgt.tibbs1977

Ouch! You got some not so helpful comments to this post!! People get into debts for all sorts of reasons and in my experience the banks need to take as much responsibility as anyone else for the monies pushed onto debters.

Re. your offer, this is called a 'full and final settlement'. It is important that if you go for this option you get everything confirmed in writing prior to making any payments and is perferctly legitimate. Ensure that it is also registered as a settled debt on your credit reference report.
However, you mentioned claiming back your PPI, if this reduced the debt below what they have already offered to write off you may want to hedge your bets and await the PPI claim.
However, each creditor has only six years in which to enforce the debt via the county court. If this six years pass then they have no write to ask you for the money. This six years is re-set each time you acknowledge the debt via writing or payment on the account. If the six years does pass then the six year cannot be reset. This comes under the Statute of Limitations Act 1980.
In respect of what constitutes 'irresponsible lending' I am afraid that there is no legislation that covers this problem. However, the OFT has expressed concerns over secured loans and irresponsible lending. In addition, the Financial Ombudsman Service have been known to find in favour of the client where consolidation loans have been obtained and the bank have not referred the client off for independent money advice.
In these cases the client has often had 3 or more consolidation loans from the same bank with no reaslistic chance of repaying the loan.
In each case the insurance and interest on the loans have been written off to quite substantially low amounts.
This, in my experience, is quite common with Lloyds TSB but I have seen it with other banks also.
In respect of your if you can continue down the complaints route I would make any Full and Final settlement offer pending the resolution of the complaints process, not sure if the bank would accept this or if the FOS would accept it as a resolution of the complaints process, the Financial Ombudsman Service does have a help line though so you can ask them direct.
It is important that whatever you do, you keep any agreements for a period of six years, when debts get sold on paperwork does often get lost.
However, this is only very brief advise and you should contact a local free adviser for further information on this. You also mentioned other problems so again you should seek further advice on these.

bert&ernie

CLAPTON wrote: »

now I know you don't say this but you seem to be implying that

-you don't think business losses should be tax deductable
-that selling debt is somehow morally wrong
-that chasing debts is somehow morally wrong
-that debt recovery companies shouldn't make a profit.

interesting...

now, I'm not all that interested in what you think I may be implying, but I will respond anyway.

I don't think its is morally wrong, as you put it, to do any of the things you mention. However, I don't think it's morally right either - its just business.

StuTheDon wrote: »

I'm sorry but this is irrelevant. If the OP borrowed the money they have a moral obligation to pay it back and not look for ways out by doing the company for wrongly lending the money.

If the OP is having problems paying it back then they should sell all the goods they bought with the card on Ebay and use that to clear some of the balance. But that wouldn't be fair would it?

Stu, it is indeed completely irrelevant, and so is the remainder of your post.

I was simply trying to illustrate that its not as morally black and white as you and CLAPTON might like to think it is.

StuTheDon

bert&ernie wrote: »

now, I'm not all that interested in what you think I may be implying, but I will respond anyway.

I don't think its is morally wrong, as you put it, to do any of the things you mention. However, I don't think it's morally right either - its just business.



Stu, it is indeed completely irrelevant, and so is the remainder of your post.

I was simply trying to illustrate that its not as morally black and white as you and CLAPTON might like to think it is.

I think it is morally black and white - if you borrow money you should pay it back. Unless of course there are extreme circumstances other than just not wanting to pay.

Whether debts are offset against tax doesnt make a difference - it is still the tax payer who picks up the tax (in this case due to reduced tax revenue from the government).

I just cannot get my head round people who say the banks lent me all this money and I had to spend it all and now I cant afford it. What happened to responsibility? The banks are a business - you dont have to do what they say.

sgt.tibbs1977

In continuation to my above post ...
If you do make a complaint to the Financial Ombudsman Service they will consider guidelines and not just legislation. Below is excerts from the Banking Code on assessing a persons suitability for credit. When making a complaint to the FOS it is important that you allow your bank the opportunity to resolve the matter first and not to make your complaints forms to the FOS too specific, ie do not put I would like you to consider section 13.2 of the banking code in respect of my complaint.

Credit cards
...

10.10 Before we give you a credit limit, we will assess
whether we feel you will be able to repay it.

10.11 We may increase your credit limit on your credit card.
We will give you notice if we do this. We will also
explain clearly, and closely to the notice we give you,
that you can refuse the increase, and the ways in which
you can do so.
• You can contact us at any time if you want to
reduce your credit limit or opt out of having your

credit card limit increased.
• You can ask us to increase your credit card limit.
We will consider this when we have made the
appropriate checks.
• Sometimes, we may decide to reduce your credit

card limit. We will tell you if we do this.

and
Borrowing money

13.1 Before we lend you any money or increase your

overdraft, or other borrowing, we will assess whether
we feel you will be able to repay it.
(For credit cards – see also section 10.11.)

13.2 If we offer you an overdraft, or an increase in your
existing overdraft limit, we will tell you if your overdraft

is repayable on demand (in other words, if you have to
immediately pay back any amounts you owe when we

ask you to).

bert&ernie

StuTheDon wrote: »

I think it is morally black and white - if you borrow money you should pay it back. Unless of course there are extreme circumstances other than just not wanting to pay.

Whether debts are offset against tax doesnt make a difference - it is still the tax payer who picks up the tax (in this case due to reduced tax revenue from the government).

I just cannot get my head round people who say the banks lent me all this money and I had to spend it all and now I cant afford it. What happened to responsibility? The banks are a business - you dont have to do what they say.

You're rather fond of contradictions arent you? You state that it is black and white and that we have a simple moral obligation to pay what we owe, but in the next sentence you start to set out the exceptions to your own rule. I guess thats OK though, because its your rule after all. Forgive me if I continue to maintain that this is irrelevant.

You also fail to see the significance of tax deduction - the issue here is that the creditor is realising a tax deduction on an asset that has been inflated in value - very often by charges that are in fact unlawful. Leaving aside accounting rules, I think its fair to say that the lender isn't worrying about the moral or ethical implications and certainly doesn't care if the taxpayer thinks this is fair.

Then we are back to the contradictions again: you dont have to do anything the bank says... except pay them exactly what they say you owe them.

We do agree on one thing though - banks are a business. They have no moral obligation to their customers, and vice versa.

For me, its not a moral issue. If I were running a bank, I'd account for credit losses in the most tax efficient way. If I were a debt buyer, if want to pay pennies in the pound for my debt. If I were a debt collector, I'd hound people for the money. I wouldn't however consider it a moral imperative that I act this way - I probably wouldn't boast about it at parties either.

eschaton

PicqNicq wrote: »

Hi All

if I do settle can I still go after the original card-issuer for irresponsible lending?

(sarcasm on)

The banks are !!!!!!!s - making you borrow all that money. Take them all the way and get the full debt written off.


(sarcasm off)

Did I hear someone say irresponsible borrowing ?

CLAPTON

bert&ernie wrote: »

now, I'm not all that interested in what you think I may be implying, but I will respond anyway.

I don't think its is morally wrong, as you put it, to do any of the things you mention. However, I don't think it's morally right either - its just business.



Stu, it is indeed completely irrelevant, and so is the remainder of your post.

I was simply trying to illustrate that its not as morally black and white as you and CLAPTON might like to think it is.

Well we agree it's not morally black and white; which is why I was asking you a question and NOT making a judgement at all.

sgt.tibbs1977

eschaton wrote: »

(sarcasm on)

The banks are !!!!!!!s - making you borrow all that money. Take them all the way and get the full debt written off.


(sarcasm off)

Did I hear someone say irresponsible borrowing ?

Do you think banks really leave it at 'no thanks'?

Do you not think that these institutions do not spend millions on professional staff (such as myself, I might add) in ensuring they know which buttons to press and which clients to presurise? It took me 7 years to get HBOS to stop sending me offers of loans that I had no reasonable expectation of paying back! The method I chose after ranting at them, getting compensation via FOS off them was by closing down the account!! Yes, individuals are guilty of irresponsible borrowing but I am afraid that the banks are very guilty of irresponsible lending and should and are being taken to task on it and rightfully so.
People get into debt for many reasons, mostly managable debt, but for some this can, through no fault of there own, spriral out of control. One of the many causes of this is irresponsible lending. For those have borrowed irresponsibly well then the banks really should have done their job, as per the above banking code post, otherwise they face the consequense of loosing their money through insolvency or people taking advantage of the many rules and regulations they SHOULD HAVE applied when dishing out the jollies!
That is my rant over with. Thank you!

bert&ernie

CLAPTON wrote: »

Well we agree it's not morally black and white; which is why I was asking you a question and NOT making a judgement at all.

If you wanted to ask me a question, even a rhetorical one, you could have at least ended with a question mark. Instead, you simply stated what you presumed I was implying.