Banks Loans. Can these be 'mis-sold'

gaggus

One of my relatives has ridden up debts with his bank because the bank kept rescheduling his and his wife's loan(s) to the piont where it should have been clear to the Bank by comparing income and expenditure that they would have severe financvial difficulties before the loan(s) was repaid.

His wife has a seperate loan and I find it incredible that the bank actually made this available as she is on and always has been on incapacity/invalidity benefit!

Is there a case for mis-selling here? Is there any independent financial body that I can go to to heartily complain about the 'ethical' (sic) Bank letting this situation delvelop?

Advice would be much appreciated.

Gaggus

BullyCornedBeef

Hey Gaggus,

LlodysTSB 'sold' a £100k loan to a couple who live of benefits about 18 months ago and receieved a lot of bad publicity-maybe you remember it?

Hopefully other board users here can give you the names of people you need to speak too. Always good to start with CAB and talk to their bank?

Astaroth

A loan cannot really be mis-sold but a bank can make an irresponsible decision to give credit.

Why do you think your relatives are incapable of making correct financial decisions? Surely his wife knew she was on incapacity benefit when she took the loan out? Or do you think that neither of them are legally fit to be allowed to make their own decisions?

jonesMUFCforever

Whilst I agree with all posts above there has to be a sense of responsibility on behalf of the customer.
Most of the cases we are seeing are rescheduled debts ALREADY INCURRED ie no new money being offered just enough to pay existing debts.

gaggus

Some people are very naive when it comes to money and can be completed bamboozled by the spiel that they are given by the banks. They just cant see the long term consequences.

Regardles of the fact that she was on benefit the bank should have clearly seen that she had insufficient income to maintain payments over a long period of time.

And now we have tried to re-schedule to make payments more managable (can you believe they sold her paymnet protection!) the bank have come back with a refusal!!!

BullyCornedBeef

I was not entitled to a personal loan when I was a student because I had no income and I know for a fact Payment Protection Insuance does not cover you if your are unemployed.

Astaroth

PPI will not cover sickness/ unemployment if you are unemployed - though the majority will kick in if you start working and then subsequently have to stop again due to the above. In either case though they will cover death.

Not sure what your comments on PPI have to do with this thread though?

Biddyrolo

Hi, not sure if this is in the right place, but my daughter got a Barclays mail shot this morning offering her a graduate loan to pay off her student loan, overdraft, buy a car, have a holiday all at 7.9%. At present she's not earning enough to repay her loan and I don't think the rate for student loans is that high anyway. She wasn't tempted.

Astaroth

Depends if they mean the official Student Loan or if they mean general loans that students get from banks - certainly "in my day" the official student loan is very close to the base rate of interest and so probably 1/2 that of the loan you mention

nomoneytoday

Surely they should be accountable for their own actions and take some responsibilty as well as the lender?

Catch_A_Fire

BullyCornedBeef wrote:

I was not entitled to a personal loan when I was a student because I had no income and I know for a fact Payment Protection Insuance does not cover you if your are unemployed.

Each policy is different. That's why you should always read all the small print (and ask for clarification on anything you're unsure of). There are life cover policies and many variations in the market. Banks are pretty much bound by the Disability Discrimination Act to have some mechanism for lending money to people on incapacity benefit.

At the end of the day banks are in the business of making money. There's no benefit to the bank in lending to someone who can't/won't repay. That said, banks can be very clever in manipulating customers in order to accrue more profit.