RBS Missold business loan?

catherineruth

Hello,
I wonder if anyone can help.
I shall try and be ask clear and detailed as I can possibly be...

In 2004 my partner and I set up a business and applied for a loan from RBS for £15000. During a long face to face meeting with our bank manager he said that as we had no assets (we did & do not own our own home) the loan would be underwritten by the Governments Small Firms Loan Guarantee Scheme. He said that once (and if) the bank had agreed the loan the SFLG would come into effect and did not need any other application. The way he explained it made it sound like it would be applied by default.
The loan was approved and we took the money. Unfortunately a couple of years later in 2006, despite lots of hard work and support from Business Link etc, we had to admit defeat and close the business. I contacted all our creditors to advise of this and have a number of arrangements in place which we are keeping too, including with the RBS. However, when I first contacted RBS I asked about the SFLG and wrote a number of letters to the branch and head office asking about how & if this would come into effect etc. I checked the paper work but could find no mention of it, but was not sure if I was expected to. I failed to get an answer from anyone, either by post or over the telephone. Eventually in 2008, after phoning the wrong number within the RBS machine I got an answer: our business loan was not underwritten by the SFLG scheme. I wrote to our original branch business manager, who wrote back saying he remembers something of the conversation but went no further with it. Both my partner & I feel sure that he said that it would go into effect and we agreed. In addition, in all likelihood, we would not have accepted a completely unsecured loan especially not one for £15000.
I have to think about whether or not something could be done. Does anyone think we have a case for misselling? This loan is a millstone around our necks, especially since RBS refuse to freeze interest.

I would appreciate any advice.

Thank you

Catherine

Fonz_2

I'd imagine the hardest job you're going to have is proof - without it, its your word against theirs.

jonesMUFCforever

If you signed an agreement - it would either be titled ''Business loan'' or ''Business loan with SFLG''. What type have you signed?

If it was a SFLG loan the bank would not have lent the money until it was approved.

catherineruth

Thanks for you replies.

The agreement is titled just business loan. It seems we may have been very naive. The bank manager made it sound like the SFLG would be by default once the bank had agreed the loan. I know it is only my and my partner 's word against the bank manager's, but we are both well-educated and both apparently got the wrong end of the stick. Why would the bank give us a loan without any security whatsoever when the SFLG is there precisely for a situation like ours? That's what I cannot understand and why we both assumed it would be there. To be honest, I didn't think to check through everything regarding the SFLG and didn't know to expect it to be explicitly stated on the agreement. The bank manager made it sound as if without it we just wouldn't have got the loan and it was the only reason we were getting it. Of course we thought, at the time, that we were going to be successful.

So do you think it's a hopeless case and should chalk it up to (bad) experience?

Catherine

[Deleted User]

Does sound like a hopeless case,would be your word against theirs

~Brock~

Whether or not the loan was guaranteed by the Government in some way, the loan is unlikely to fall under the Consumer Credit Act 1974 (the clue is in the word 'Consumer') and therefore the protections afforded by the Act are unlikely to apply, including any notion of 'misselling' (which appears to be the buzzword of the generation).

ERICS_MUM

I don't think it's a case of mis-selling, more a matter of mis-understanding and/or failure to dot the eyes and cross the tees of the loan details and terms (on your part and RBS') . 20\20 hindsight is a marvellous thing! Don't beat yourself up about it.

You have nothing to lose by writing to them about it, but be prepared to be disappointed. Good luck anyway.


Linda :beer:

ILW

The government guarantee on these loans was just to indemnify the lender to some extent, it was never intended to cover the borrower, so in effect it will make no difference.

housebuyer_abc

ILW wrote: »

The government guarantee on these loans was just to indemnify the lender to some extent, it was never intended to cover the borrower, so in effect it will make no difference.

You are right, the guarantee wasn't to write off the loan to the borrower if they went bust, merely to cover the bank if the company went bust and then the borrower defaulted.

The SLFG never gave a 'get-out-of-jail' to the borrower in the same way payment protection can (in some circumstances)