Irresponsible lending? Advice

Garym85

Hi All,

I am in my mid twenties and by complete accident about 18 months ago I opened a letter that was actually adressed to my grandmother- (same initial and surname) to find a letter from RBS saying she had missed a payment on her loan. When I questioned why she had a loan it became crystal clear her finances were in a bit of a mess.

Firstly, She is now 72 years old and lives off a state pension with a little bit of disability living allowance on top. She stays at home in a rented house, therefore has no assets.
I set up an appointment with the bank and her to discuss why she missed the payment and gain a better understanding of exactly where we were.... the meeting that followed astonished me and almost led to me losing my temper.

It turns out, my gran- who would admit herself isnt the startest with money and whilst has more than enough to live off of comfortably- still cant manage her money very well. She has two seperate accounts and switches money between them both as money goes into one account and loan is taken from another (easily managed online but not in her position)

The total unsecured loan amount was around £24,000.
This is the actual amount with interest still being accumulated on a monthly basis.
I asked for statements to understand exactly what money was coming in to the account, what bills needed paid and how much extra there was at the end of the week/month.

It is now 18 months on and the £24k + £2k from another lender = £26k now looks like £11k.



My question is, I asked the bank how long the loan would take to pay at the current rate(18months ago) and the girl couldnt work it out. I did a quick sum that it would take around 10 years.

Does anyone else agree that this is utterly irresponsible lending on the banks behalf? For me, having a widowed lady in a council home in her 70s with, in total £35k debt that will take minimum 10 years to fully repay is nothing short of a joke. nobody in my family knew about this, therefore the potential is that this could have landed at one of our feet if the very very worst should have happened.
I appreciate that my grandmother is wrong to have taken the money. She doesnt like using ATM machines and has told me this figure has mouted up as a result of the bank teller asking her if she would like an extension to her loan....


Finally, can anyone direct me as to where I can complain to the bank- the bank manager must have a decimal point before his IQ as he was utterly useless.

12bdebt3

http://www.rbs.co.uk/global/h/contact-us/personal-banking/complain.ashx

I do think that this is irresponsible lending. All banks are doing it, I filled out an online form for a personal loan and within 2 days they put the money in my account. I didn't have to go into the bank to see anyone, ring anyone up, I have no assets and the only thing they had to go off is that I can afford to pay the monthly repayments assuming I keep my job for the time period. Although the sum of money I borrowed was nowhere near as much as your mothers and I am a lot younger than your mother it is still irresponsible. All the banks are still doing it despite this being part of the reason we are currently in a credit crunch, you'd think they would learn their lesson, obviously not.

[Deleted User]

arrontdep wrote: »

http://www.rbs.co.uk/global/h/contact-us/personal-banking/complain.ashx

I do think that this is irresponsible lending. All banks are doing it, I filled out an online form for a personal loan and within 2 days they put the money in my account. I didn't have to go into the bank to see anyone, ring anyone up, I have no assets and the only thing they had to go off is that I can afford to pay the monthly repayments assuming I keep my job for the time period. Although the sum of money I borrowed was nowhere near as much as your mothers and I am a lot younger than your mother it is still irresponsible. All the banks are still doing it despite this being part of the reason we are currently in a credit crunch, you'd think they would learn their lesson, obviously not.

So the credit crunch is actually the opposite

So there is no recession!! Woo!!

Nara

The problem about this country atm is no body cares.

Like the mobile phone company that gave my brother a contract phone when he has no money, no job , no nothing and no concept of bills or managing money, so what happened he ran up a £600 bill, sold the phone to a friend and now they are chasing my mum for the money!! lol, even though he is over 18. She is having to get a letter from the doctor to prove he has problems which means no way could he ever have understood clearly the contract or charges and they shouldn't of given it to him when he doesnt have any income :S

Banks are the same tbh, in fact most companies are, they don't care about old people or ripping them off. Makes me sick

somethingcorporate

Can you go back through the accounts and find out what the money was spent on?

If you can find out what happened to the money perhaps there is something you can quickly / easily divest to assist in bringing down the loan?

At the end of the day the level of financial naivity of your grandma is not the banks responsibility. If she had the means to repay a loan (which it sounds like she does) and the bank did the checks to ensure this was the case then your Grandma would have had to request this loan (and has obviously benefitted from the money).

There are 2 sides to every story and your Grandma (however harsh this sounds) is likely just as culpable for the situation.

ILW

Garym85 wrote: »

Hi All,

I am in my mid twenties and by complete accident about 18 months ago I opened a letter that was actually adressed to my grandmother- (same initial and surname) to find a letter from RBS saying she had missed a payment on her loan. When I questioned why she had a loan it became crystal clear her finances were in a bit of a mess.

Firstly, She is now 72 years old and lives off a state pension with a little bit of disability living allowance on top. She stays at home in a rented house, therefore has no assets.
I set up an appointment with the bank and her to discuss why she missed the payment and gain a better understanding of exactly where we were.... the meeting that followed astonished me and almost led to me losing my temper.

It turns out, my gran- who would admit herself isnt the startest with money and whilst has more than enough to live off of comfortably- still cant manage her money very well. She has two seperate accounts and switches money between them both as money goes into one account and loan is taken from another (easily managed online but not in her position)

The total unsecured loan amount was around £24,000.
This is the actual amount with interest still being accumulated on a monthly basis.
I asked for statements to understand exactly what money was coming in to the account, what bills needed paid and how much extra there was at the end of the week/month.

It is now 18 months on and the £24k + £2k from another lender = £26k now looks like £11k.



My question is, I asked the bank how long the loan would take to pay at the current rate(18months ago) and the girl couldnt work it out. I did a quick sum that it would take around 10 years.

Does anyone else agree that this is utterly irresponsible lending on the banks behalf? For me, having a widowed lady in a council home in her 70s with, in total £35k debt that will take minimum 10 years to fully repay is nothing short of a joke. nobody in my family knew about this, therefore the potential is that this could have landed at one of our feet if the very very worst should have happened.
I appreciate that my grandmother is wrong to have taken the money. She doesnt like using ATM machines and has told me this figure has mouted up as a result of the bank teller asking her if she would like an extension to her loan....


Finally, can anyone direct me as to where I can complain to the bank- the bank manager must have a decimal point before his IQ as he was utterly useless.

What do you mean by that?

What did she spend the money on?

p00hsticks

When and how did she come to apply for the loan in the first place ?

antrobus

Garym85 wrote: »

Finally, can anyone direct me as to where I can complain to the bank- the bank manager must have a decimal point before his IQ as he was utterly useless.

Well technically, you can't make a complaint at all.

I'd imagine you'd need a power of attorney (or something similar) to act on behalf of your grandmother. At the very least her signed consent in some form or another. Banks shouldn't go round discussing their customers business with relatives no matter how well intentioned they are.

Fiddlestick

Garym85 wrote: »

Firstly, She is now 72 years old and lives off a state pension with a little bit of disability living allowance on top. She stays at home in a rented house, therefore has no assets.

If she has no assets...

nobody in my family knew about this, therefore the potential is that this could have landed at one of our feet if the very very worst should have happened.

Then there wouldn't be anything in the estate to be repaid in the event of her death.

An annoyance for sure, but not a *huge* problem.

All you would need to do would be to send the bank proof of death and they would freeze the interest.

Later on show them the accounts of the estate and they would write off the remaining amount of the loan as it would be clear that the estate had no assets.

zppp

arrontdep wrote: »

http://www.rbs.co.uk/global/h/contact-us/personal-banking/complain.ashx

I do think that this is irresponsible lending. All banks are doing it, I filled out an online form for a personal loan and within 2 days they put the money in my account. I didn't have to go into the bank to see anyone, ring anyone up, I have no assets and the only thing they had to go off is that I can afford to pay the monthly repayments assuming I keep my job for the time period. Although the sum of money I borrowed was nowhere near as much as your mothers and I am a lot younger than your mother it is still irresponsible. All the banks are still doing it despite this being part of the reason we are currently in a credit crunch, you'd think they would learn their lesson, obviously not.

To be fair, it will only go through online, if all of the information you enter tallies with their system, meets credit scoring and passes the basic affordability checks. This would be the same process as if you went into the branch or called up. It simply automates the process. It is certainly not the days where the bank manager would maje a decision based on a cheklist, but IMO this way, it is a more consistent approach.

magpiecottage

It is possible to make a complaint to the bank about this and it IS possible to then take it to the Financial Ombudsman Service.

Such complaints have been successful.

However, it is usual to assume that a borrower over the age of 18 is normally considered to be capable of taking an informed decision to borrow.

When complaints have been upheld by the Financial Ombudsman Service, it has been necessary to demonstrate not only that the borrower did not have the capacity to understand what they were doing but that it ought to have been obvious to the lender that they could not.

A case I remember reading about was upheld largely because a manager of a local shop (Dixons I think) was able to confirm that they had refused credit on the same day because they had concerns but the person then walked into the bank and borrowed the money.

As we get older, our mental capacity does decrease but your Gran was 70 when you first found out about the loan which had, presumably, been going for some time. The vast majority of 70 year-olds still have good mental capacity so I think you will have an uphill struggle.

A couple of other things, though:

1) The bank should not be talking to you about your Gran's account without her authority to do so.
That also means you cannot complain without that authority.
2) You cannot inherit somebody else's debt.