mis-selling?

ermintrude1

Hi, I would appreciate opinions on the following event. It doesn’t seem right to me, but I’m not sure if there’s anything we can do;

In his single days, my boyfriend had small personal loan with Lloyds (with ppi). He needed to borrow more money to buy a part share in a house.

Lloyds sold him a further unsecured personal loan, into which they consolidated the original one. The new loan was at 0.7% higher interest rate than the previous one. Again this had ppi on it, although he has no idea under what circumstances it pays out or for how long.

I think they should have offered him either a mortgage or at least a secured loan at better interest rates for the house, but they didn’t ask him what it was for. Neither do I think they should have consolidated the cheaper original loan.

He has a copy of the signed check list of advice given and a statement re the term, borrowing and interest, but no terms and conditions re early repayment, ppi etc

What do you think?

jonesMUFCforever

I think you are clutching at straws.
You cannot get a mortgage or secured loan to buy a part share - how would they enforce the security if he defaulted?

The slight increase in rates could be explained by either general interest rates higher at consolidation than at the outset or a deterioration in his credit profile at the bank.

I really don't see on what basis you can claim a miss-sale?

bumpoowee

If he was sold PPI without being asked if he wanted it or it being mentioned that sounds like mis-selling to me, but complaining about signing up for a loan he didn't really understand or check the rate on isn't mis-selling - it isn't the banks responsibility to make sure your boyfriend read the agreement.

I'm sure somebody will be along with a proper legal perspective, but to me this sounds like a case of not bothering to understand the contract until long after signing it - think you're clutching at straws personally.

ermintrude1

Well. I did ask for opinions!

I reckon you're wrong re the mortgage as the co owner has one for his share.

I did think banks had some sort of obligation to act in client best interest, advising someone to take out a new loan when they could have carried on with an existing cheaper one is only of benefit to bank, surely? Plus havent they doubled up on the ppi? from what i can see on his statement this is a fixed amount, including the insurance, so when the small loan was paid off by the new loan the insurance charges on it were paid off in full.

jonesMUFCforever

Who is the co owner buying from - is it a shared equity through say a housing association?

If so then yes he/she can get a mortgage but your boyfriend would have had to be on THAT mortgage not any kind of mortgage offered by Lloyds.
In most cases housing associations do not let borrowers have second mortgages as it dilutes their share of the equity.

At the moment its 2-0 to posters who think that there is no miss-sale - hang around a bit and you might get someone who will agree with you,

dfh

I think he may have a case if the PPI was added without his knowledge or consent.

CHR15

It sounds as if ppi was added with his knowledge, but without his understanding of it.

No idea if that makes a difference though.

ermintrude1

Thanks for all the feedback – it does help.

When I posted last night I didn’t think there was any complaint re the ppi, as he did want it, although without being fully aware of the conditions other than what was discussed. Since then I’ve found the ‘recommendation summary’ which I’m still studying, but it seems apparent to me at moment is that he’s only got life cover, when he wanted payment protection.

My main gripe was that he should have been told to seek mortgage advice, or at least investigated all the options – this was not a housing association purchase but one involving family members – all complete novice first time buyers. He’s simply been sold the most expensive loan product they had available, not the most suitable for his requirements.

I know that if someone tries to sell me a pension, they must advise me that I would be better off in an employer contribution scheme, if one is available.

Perhaps this legislation applies only to pensions? I don’t know

ermintrude1

And of course, consolidating the existing loan did nothing other than increase his monthly outgoings and boost their profits. I guess the fact that he was fleeced and didn’t realise is tough luck?

ILW

I think the OPs boyfriend needs to take a little responsibilty for his own decisions. (I am assuming he is an adult with his own brain)

ermintrude1

Yes he takes full responsibility, and is now very aware of the dangers of believing smooth talking sales girls with targets.