Natwest loan forced?

[Deleted User]

CHR15 wrote: »

Isn't that the same as persuading someone to take out the extended warranties and having more bells and whistles on the car?

Sounds the same to me, still the customer has to make the choice

Theoretically, but in practice it's actually the same product.

It would be like going into the hypothetical BMW Dealership and them selling a car to you at £15k and not telling you that actually they had a deal on that month where it should have only cost £10k.

Same situation for the bank: if a customer - especially one who is already in debt or a tight financial position - goes in and says 'I need £1,000 to clear a credit card debt' - should the bank be allowed to sell them a high-interest loan for that amount if in fact it could offer the customer a low-interest overdraft for the same figure?

Of course, it may sound quite hypothetical all of this, but I think it's one of a number of important factors in people getting into debt - at least from my experience! My bank (Barclays) kept refusing me an overdraft for £300 as a student because they said I didn't have a sufficiently strong credit history, but Barclaycard kept offering me increases on my credit limit - up to £6,500 - without me asking for it. Is it right - not from a commercial perspective, but from a position of regulation/moral intervention statutory, that one division of the same organisation refuses me a low-interest problem on grounds that another division of the same business overlooks to flog me a high-interest solution?

I know it's a pipe dream, but I would love (not that it'll ever happen) to see regulation in this area...I'm surprised it doesn't already exist...surely there must be some rule that forces banks always to offer the most appropriate financial product to the consumer in any given set of circumstances...?

[Deleted User]

jonesMUFCforever wrote: »

And in both scenarios the customer has the right to refuse to do business!

And in the original OP's post, they are suggesting (which I won't dispute) that the customer did NOT have the right to refuse business, because they had Natwest breathing down their neck telling them that a personal loan was the only solution to the problem.

Given that Natwest were perfectly fine with the customer already having a £900 overdraft, what justification do they have for refusing to reinstate it on 'credit record' grounds? I am sorry to disagree with others here, but I can't see how this is fair to the OP. Surely in order to qualify for the consolidation loan that the OP was flogged, they would need to have a better 'credit rating' in the eyes of the bank that they would to have a £700 overdraft...?

ILW

Deleted_User wrote: »

It would be like going into the hypothetical BMW Dealership and them selling a car to you at £15k and not telling you that actually they had a deal on that month where it should have only cost £10k.

...?

Legally they would have done nothing wrong.
A price is negotiated between buyer and seller and agreed by both parties.
Many people buy new cars cheaper than others by doing research and actually negotiating with the dealer. Others pay over the top by accepting the first deal they are offered. We all have to take a little resposibility for out decisions and realise that the world is not entirely populated by people who are looking after us at some expense to themselves.

CLAPTON

At the end of the day the OP hasn't given any actual facts to base an assessment of the rights and wrongs on.

How big was the original loan, APR, settlement figure etc
How big was the new loan, APR, monthly payments, number of payments etc

OD are withdrawable on demand... that's how they are

Why is the Op saddled with a 'big loan ' now ... surely it is only the settlement figure of the M&S loan plus the OD amount.... or is it more and why?

the OP was presumably struggling anyway as she was up to her limit of the OD

best frankly to forget about mis-selling and post up a SOA on the debt free wannabe board and addresss the issues of debt.

CHR15

Deleted_User wrote: »

Theoretically, but in practice it's actually the same product. /snip/

I agree with your comments but see things in a slightly different way.

Banks are businesses out to make profit, the same as any business. They aren't Government run companies (okay, lets not go there!!) out to ensure quality and value for money.
They only limit the interest they charge to ensure they are competitive in their respective market.

That's what an IFA is for.

If you don't know what's best for you, you should visit an IFA and put your cards on the table. If he is any good, he should make recommendations to you which are in your very best interest, and which will cost you less in the longer term.
The fee he should charge for his advice should be subsumed into the overall savings he has identified (unless things really are that dire).

Go to BMW - Expect to be sold a BMW
Go to Ford - Expect to be sold a Ford

In either case, either dealer will try to get you to buy the most expensive one they can.
People will dig their heels in a lot more confidently with a car though,
Ask for a 3-Series and the dealer says, how about an X5, the customer will say quite firmly what they want (a 3 Series)

Sounds an extreme concept and unlikely to happen, maybe because it is a tangeable item, loans, OD's, Mortgages are only numbers on paper so customers don't see them in the same way so are easily stooped by the salesman (who is similarly trying to get himself the larger bonus like the car dealer).

Banks + Morals in the same sentence?? maybe one day.

[Deleted User]

Yes, I agree re: all of the above and can see how things work in reality, but in which case, am I correct in saying that there is no kind of law, banking code, regulation or guideline that says a bank must always try to match the most appropriate product to their customers. Or, conversely, that a bank IS allowed to flog a high-interest product to someone for whom the low-interest product is more suitable?

jonesMUFCforever

Deleted_User wrote: »

Yes, I agree re: all of the above and can see how things work in reality, but in which case, am I correct in saying that there is no kind of law, banking code, regulation or guideline that says a bank must always try to match the most appropriate product to their customers. Or, conversely, that a bank IS allowed to flog a high-interest product to someone for whom the low-interest product is more suitable?

You are correct.
A bank will lend to you at its best rates not most expensive.
If everyone was charged the most expensive rates the banks know that their customers would look elsewhere.

RobertoMoir

Deleted_User wrote: »

And in the original OP's post, they are suggesting (which I won't dispute) that the customer did NOT have the right to refuse business, because they had Natwest breathing down their neck telling them that a personal loan was the only solution to the problem.

Given that Natwest were perfectly fine with the customer already having a £900 overdraft, what justification do they have for refusing to reinstate it on 'credit record' grounds? I am sorry to disagree with others here, but I can't see how this is fair to the OP. Surely in order to qualify for the consolidation loan that the OP was flogged, they would need to have a better 'credit rating' in the eyes of the bank that they would to have a £700 overdraft...?

As we weren't in the room when the loan was discussed, you can't really say how heavily natwest were "breathing down their neck" as you put it. As for the overdraft, are you saying banks should be forced to offer people money on whatever terms those people wish? Surely it's the bank's perogative to say "sorry we can't offer you that product" just as it's ours to say "well in that case I'll be taking my business elsewhere".

Banks ought to lend responsibly but perhaps people should borrow responsibly too. I'm horrified by the amount of people on these boards who apparently take out quite serious debt comittments without doing any research beforehand and without taking the time to read and understand what they are signing up to. Maybe banks could and should be regulated a little more heavily in this regard, but sooner or later perhaps people have to take responsibility for their own actions too.

jonesMUFCforever

RobertoMoir - that is a good point well made.

The problem now to when I started work is this - then if your bank said no then that was it - no other bank wanted to take on another bank's customers debts - NOW if your bank says no you go down the street or on the internet and people are throwing money at you with very few checks to see whether you can afford it.