Inappropriate / irresponsible lending

danihulo

Hi All,

First post here but have lurked a LOT!

Wondered whether anyone could advise me on the following (it's a long story, I will try to keep it short.)

My sister suffers from severe bipolar disorder (manic depression). When she had her initial breakdown about 8 years ago she had taken out £10K of loans with Lloyds TSB which she could not pay back due to long-term hospitalisation and loss of job. Fortunately she had payment protection with Lloyds which covered the loan.

When in the manic phase of her illness, she spends money - Stephen Fry mentioned the same problem in his recent programme. This is a woman who will never work again, has attempted suicide (seriously) on several occasions, has been administered electric shock treatment etc. She also self harms. She is married and her husband works (about 20K annual income there I believe). She receives disability living allowance and a couple of other benefits.

Last year they wanted to buy their council flat. Lloyds turned them down due to very bad credit rating. This April however, they were approved for a mortgage (60K). All good so far!

Sadly she has been pretty manic this year. She has acquired (without hubbie's knowledge), £23K of additional debt. She told our Mum that it was a choice of either killing herself or telling Mum. She knew that Mum would offer to pay off the debts - retired, this is money Mum should be living off, she does not have a lot more. Manipulation is another side to the illness but Mum would never forgive herself if she did kill herself.

Whilst I accept that my sister bears some responsibility for her situation, surely the banks etc should not have lent her so much money. Lloyds TSB in particular. Having previously turned her down for a mortgage, and knowing her health status and that she does not work, they have since loaned her £16K, given her a £1600 overdraft - in use - and a credit card with a limit of £12K - only £750 spent on this and now cut up. Surely this is completely irresponsible and inappropriate.

Anyway, 2 main questions (I did try to keep it short!)

1) Do you think I stand a chance of getting the debts reduced? If so, how do I go about it?
2) Is there any way to stop her borrowing these sums again when she is next in the manic phase of her illness?

Many thanks for any and all advice.

immoral_angeluk

Sorry to hear about your sister. Unfortunately banks are only in the business of making money and unless they knew her full history they're not going to think she's any different to any other lender with problems in the past. Try the CAB but I doubt there's much that can be done apart from her husband keeping a severly tight reign on her spending.

Newone_2

danihulo wrote:

Hi All,

First post here but have lurked a LOT!

Wondered whether anyone could advise me on the following (it's a long story, I will try to keep it short.)

My sister suffers from severe bipolar disorder (manic depression). When she had her initial breakdown about 8 years ago she had taken out £10K of loans with Lloyds TSB which she could not pay back due to long-term hospitalisation and loss of job. Fortunately she had payment protection with Lloyds which covered the loan.

When in the manic phase of her illness, she spends money - Stephen Fry mentioned the same problem in his recent programme. This is a woman who will never work again, has attempted suicide (seriously) on several occasions, has been administered electric shock treatment etc. She also self harms. She is married and her husband works (about 20K annual income there I believe). She receives disability living allowance and a couple of other benefits.

Last year they wanted to buy their council flat. Lloyds turned them down due to very bad credit rating. This April however, they were approved for a mortgage (60K). All good so far!

Sadly she has been pretty manic this year. She has acquired (without hubbie's knowledge), £23K of additional debt. She told our Mum that it was a choice of either killing herself or telling Mum. She knew that Mum would offer to pay off the debts - retired, this is money Mum should be living off, she does not have a lot more. Manipulation is another side to the illness but Mum would never forgive herself if she did kill herself.

Whilst I accept that my sister bears some responsibility for her situation, surely the banks etc should not have lent her so much money. Lloyds TSB in particular. Having previously turned her down for a mortgage, and knowing her health status and that she does not work, they have since loaned her £16K, given her a £1600 overdraft - in use - and a credit card with a limit of £12K - only £750 spent on this and now cut up. Surely this is completely irresponsible and inappropriate.

Anyway, 2 main questions (I did try to keep it short!)

1) Do you think I stand a chance of getting the debts reduced? If so, how do I go about it?
2) Is there any way to stop her borrowing these sums again when she is next in the manic phase of her illness?

Many thanks for any and all advice.

from working in banking and finance, the really difficult part of this is that banks and finance cos cannot ask customers if they have any mental illness that could effect their understanding of the responsibilities they are taking on with credit and then subsequently refuse to lend to them as they could be open to a claim under disability discrimination. I have seen it so many times where relatives complaint to the lender about the money given when all the necessary checks had been made. one i will never forget is where the persons father complained that the customer was on minimum benefits and did only part time work but had gained a lot of debt, with a number of companies. he stated hisself that from talking and looking, you would not be aware that anything was wrong. if there is going to be any tighter controls to stop people getting so far into debt which they don't understand, there needs to be an allowance for the banks to ask about medical and health issues. it can't work both ways that they can't ask but still should know not to lend even though all the checks made come back clear.

The only way to prevent lending is for the credit reference agency records to reflect that the commitments are not e.g. very late payment, default etc or ensure that someone is with her whenever she is in manic state. there is nothing the banks and finance companies can do to prevent further applications being made. for example, a storecard provider, the finance company, canot send a message to every client they deal with, to alert every individual store that any application from a certain person should not be completed.

my friend is in the same position, she even used to work with me in finance so does understand the workings of credit but totally forgets her experience when she is in a manic state and someone has to be with her the whole time.

if the debt is only in her name, it may be worth her husband setting up a completely separate bank account, transferring any mortgage to his own name and then sending anotice of dissassociation (sic) to the credit refernce agencies. his finances, if better than hers would not be taken into account if she did try to apply again and may help to decline any apps made.

with regards to the debts, you can try writing, with a letter from your sisters consultant or counsellor detailing the extent of her illness and that here is no way she would have understood at the time what she was signing for. however, be prepared for them to refuse to reduce or write off the balance as they may state that if she is really that severe then she should not be left alone when in a manic state. sorry if this sounds harsh but i know from experience and don't want to give you false hope.

rosscobley

Can't you send a letter to Experian so that a note can be put on to her credit file. That wont stop her being able to take loans out but at least they may do extra checks before lending the money. maybe ask for her husband to be contacted before agreeing to anything. It may help it may not its worth a try

regularsaver1

I think Lloyds would have had to assess her affordability and rationaled a case. You can probabaly apply for this info under the DPA - to see what was keyed. Have you spoke to Lloyds?

I do agree with Newone's comments. I asked a few questions to a man once that wanted a loan at the age of 70 and he was asking if I was ageist. No, just double checking criteria.

rebrov2

i also work in banking

i fully sympathise with your situation.

however you will be amazed how often people "forget" to mention things in interviews for loans e.t.c and as a previous poster metioned quite correctly we have no way of checking what the customer is saying is 100% correct.

I get a bad press but i can say hand on heart i lend responsibly in all cases to the best of my knowledge, its not all one way sometimes the customer has to take responsibility as well

all the best

whambamboo

danihulo wrote:

Hi All,

First post here but have lurked a LOT!

Wondered whether anyone could advise me on the following (it's a long story, I will try to keep it short.)

My sister suffers from severe bipolar disorder (manic depression). When she had her initial breakdown about 8 years ago she had taken out £10K of loans with Lloyds TSB which she could not pay back due to long-term hospitalisation and loss of job. Fortunately she had payment protection with Lloyds which covered the loan.

When in the manic phase of her illness, she spends money - Stephen Fry mentioned the same problem in his recent programme. This is a woman who will never work again, has attempted suicide (seriously) on several occasions, has been administered electric shock treatment etc. She also self harms. She is married and her husband works (about 20K annual income there I believe). She receives disability living allowance and a couple of other benefits.

Last year they wanted to buy their council flat. Lloyds turned them down due to very bad credit rating. This April however, they were approved for a mortgage (60K). All good so far!

Sadly she has been pretty manic this year. She has acquired (without hubbie's knowledge), £23K of additional debt. She told our Mum that it was a choice of either killing herself or telling Mum. She knew that Mum would offer to pay off the debts - retired, this is money Mum should be living off, she does not have a lot more. Manipulation is another side to the illness but Mum would never forgive herself if she did kill herself.

Whilst I accept that my sister bears some responsibility for her situation, surely the banks etc should not have lent her so much money. Lloyds TSB in particular. Having previously turned her down for a mortgage, and knowing her health status and that she does not work, they have since loaned her £16K, given her a £1600 overdraft - in use - and a credit card with a limit of £12K - only £750 spent on this and now cut up. Surely this is completely irresponsible and inappropriate.

Anyway, 2 main questions (I did try to keep it short!)

1) Do you think I stand a chance of getting the debts reduced? If so, how do I go about it?
2) Is there any way to stop her borrowing these sums again when she is next in the manic phase of her illness?

Many thanks for any and all advice.

It's not Lloyds' fault that she's ill. Unless you tell them that she's manic, how are they going to know.

Why should Lloyds' other customers, shareholders, pensioners, etc., foot the bill for the spending she's done????

chainguy

'Fraid I'm with you Whanbanboo. Why is it always someone elses fault?

Didn't hubby notice that she about 23k more spending power than she maybe ought to have had?

krisskross

What was the money spent on? Was it visible purchases that she shouldn't have had the money for? Can anything be returned?

danihulo

Dear All,

Thanks for the comments.

To clarify, Lloyds were fully informed of her condition at all times so they knew she has bipolar disorder so severely that she cannot and (barring a miracle) will not ever work. This is the basis that I believe the lending, which was to her personally not in joint names with her husband, was irresponsible.

Sadly she does not really have anything to show for the loans - 5K car - they are a one car household and do need something reliable, so not unreasonable, couple of new sofas, bathroom refit with new shower. Much of the money was frittered on takeaways etc I suspect.

Whilst her husband is lovely he has not a clue when it comes to money. She tells him they have the money and he believes her - yes this is something we will try to address as a family.

Any further suggestions?

Cheers.

chainguy

So the money went on a car which 'they need and is not unreasonable' and to improve the value of the home they live in. The rest went on unnecesary takeaways which I'm assuming she didn't eat all by herself.

Sell the car and sell the home then, and ask a question before picking up the phone in future to drop £20 on take out food.

I'm NOT going to apologise for taking that train of thought when all I hear here is someone wanting to absolve the family of all responsibility, but still come out a winner at the other end.

As for hubby also being 'clueless' with money; looks like at least one person in that relationship should have taken steps to get some budgeting advice and control the pursestrings back in the day. Thats called being an adult, or does he have a disorder which means he can't cope as well?

Nah, sorry. Not buying it. Pay it back, learn the lesson, and move on.

Sounds like they had a high time buying cars and going out picking new bathrooms and then nipping in for a takeaway on the way home to celebrate.

They spent it. Now UNSPEND it.

Oh, and for whats it worth, when I met my wife, she was upfront enough to tell me that she was in serious debt. Her ex was scum who was awfully good at forging signatures on loan applications and then frittering the money away. She could have walked from that obligation after she binned him, but no - jointly and severably liable is the phrase here. So she started to pay it off, and was living on spaggetti and ketchup at some points. So I used a considerable amount of my money to bale her out (30k+. And this was in the late 90's, when that was a decent enough figure) So yeah, I HAVE seen it from the sh1tty side of the coin.

Have some pride and get on with it.