Problem with my bank and Financial Ombudsman (FOS)

Goodeluck11

Hi All,

I need some urgent help here on how to deal with my bank and FOS which I think is an extension of my bank's complaint department.

I referred a matter I tried to resolve with my bank to FOS, but I did not see any difference between my bank and the Financial Ombudsman Service.

Problem with bank

I took a loan with my bank in 2005 at the rate of 6.9%. While I was repaying this loan, I fell into real financial hard times. This financial hard times lead to me expending my entire overdraft before my next salary comes in. Each time this happened, my bank will advise me, either by phone or in person to come for a meeting. Each time such meeting took place, I will be advised to take additional loan to offset the overdraft because overdraft rate was usually higher than loan.

One would always think that they were right, so I will usually take their advice. Each time I took their advice, by taking the loan, my rate jumps up. First it jumped to 9.9%, from that the next jump was 13.1%. While this was going on, the bank kept on increasing my overdraft for £1000.00 to £3150.00. What these increase did to me was kept me spending and getting into more debt.

Sometime last year, I got some money from my remortgage. This money went to my account. As soon as my bank saw the money, they called me to come and use the money to pay off my loan, as the rate was too high at 13.5 %. I went to the bank and saw a different staff from the one that called me to come and pay off my loan. I told this staff that I want to pay off my loan. I asked this staff at what rate the loan was? She confirmed that it was 13.5%. Don't forget that I signed the agreement at 13.1%.

I have asked my bank to explain this to me; they could not come up with any explanation.

Problem with FOS
Because my bank could not explain their discrepancy, I had to refer the matter to the FOS. First, after several months of lodging my complaint with FOS, they came back to me to resend my complaint because they (FOS) have misplaced the first one.

I sent my complaint again asking the FOS to check any malpractice of this bank in their dealings with me. I asked FOS to check what malpractice in the loans this bank had given me, whether they have applied other hidden charges like PPI, and why the bank lied to me. I also asked FOS to check whether the bank was right to constantly increasing my overdraft thereby plunging me into debt.

FOS came back with their report, completely ignoring the PPI issue in their report, also telling me that he had no reason to check other loans this bank gave me, that the bank did not do any wrong in increasing my overdraft without my consent. Please I need you to look into this and see whether there is any wrong doing which the bank and the FOS are trying to cover up. I still have the loan agreement which states that the loan rate is 13.1%, while the bank staff told me otherwise.

Goodeluck11.

CLAPTON

On the matter of the loan APR

your paperwork says 13.1%
some-one verbally said you were paying 13.5%

what are you actually paying ?
if you gave the loan amount, the monthly payment and the number of payment due maybe we could work out what you are actually paying (asuming no missed or late payments)

ILW

Goodeluck11 wrote: »

I also asked FOS to check whether the bank was right to constantly increasing my overdraft thereby plunging me into debt.


Goodeluck11.

As far as I know, there is no law that says if the bank give you an overfraft that you have to use it. What did you spend it on?

_Andy_

Really don't get what the problem is here - you need to be clearer.
A couple of points though - the Ombudsman is separate to the bank.
You mention PPI at the end but it isn't mentioned prior so not sure what the issue is there.

In summary you've had loans and various overdrafts. You mention the bank 'lied' to you about the loan APR but I'm a bit lost as to how - are you saying for sure the loan you have is being charged at a slightly higher rate than the loan agreement?

[Deleted User]

Goodeluck11 wrote: »

I also asked FOS to check whether the bank was right to constantly increasing my overdraft thereby plunging me into debt.

Er...hello! Reality-check time!

If a car salesman sells you a car, he doesn't cause you to speed.

If a cookery store sells you a knife, she doesn't cause you to stab someone.

If a newsagent sells you a box of matches, they don't cause you to set fire to something.

Just in case you're not getting what I'm hinting at:

The fact the bank gave you an overdraft does not mean they were responsible for you using it and getting into more debt.

They did not put 'plunge you into debt'. You did that bit yourself.

You're trying to create a cause and effect where none exists. The fact the bank increased your overdraft did not increase your debt. The fact you USED your increased overdraft did that.

You might argue that the bank shouldn't have tempted you, but again, look at my examples above and you'll see it's not the banks' fault that you spent.

So, some genuinely useful advice:

Firstly, the fact the bank increased your overdraft is a GOOD THING, as your overdraft is not going to have as high an interest rate attached to it as a loan would. You will be in a better position spending on an overdraft than a loan.

The fact they've pushed you into increasing loans is naughty, but nothing more than that. Certainly not illegal or against any rules as far as I'm aware, unless you were *forced* into the loan against your will, which would be very difficult to prove.

We need more information to help you though: what other debts do you have and why did you spend your overdraft? Debts like this only escalate if you're living outside your means - and by that I include things like having debt repayments that are too large. Did you try and negotiate reduced payments with the bank? Or ask for a payment holiday? Did you seek any other debt advice?

CLAPTON

It is a bit difficult to determine the exact APR of a loan as there are some variables in the way its worked out so different calculators give somewhat different results but my spreadsheet says

that a loan for 18,250 over 84 months at 13.1% would cost £325.82 per month
whilst one at 13.5% would cost £329.33 per month

~Brock~

CLAPTON wrote: »

It is a bit difficult to determine the exact APR of a loan as there are some variables in the way its worked out so different calculators give somewhat different results but my spreadsheet says

that a loan for 18,250 over 84 months at 13.1% would cost £525.82 per month
whilst one at 13.5% would cost £329.33 per month

You've either typed the first figure wrong to the tune of £200 or you need to get a new spreadsheet !!

CLAPTON

~Brock~ wrote: »

You've either typed the first figure wrong to the tune of £200 or you need to get a new spreadsheet !!

thank you very much.. a little too much haste etc..

yes that should be 325 and not 525... I will correct my post
thanls again.

~Brock~

No problem - didnt want to appear pedantic, but it was a significant difference!

Fully agree with the calculated figures, assuming no deferred first payment options of course.

chalkie99

Goodeluck11 wrote: »

the bank kept on increasing my overdraft for £1000.00 to £3150.00. What these increase did to me was kept me spending and getting into more debt.

Fatal flaw in your argument :rolleyes: as ably pointed out by others above.