Barclays Irresponsible Lending (URGENT HELP PLEASE!)

phase3uk

Hi
Just looking for anyone else who may of experienced irresponsible lending as part of a "holiday club"?
Basically my mother and stepdad got suckered into attending an "all expenses paid" trip to Malta in return for attending a "presentation" whilst they were out there. Had I of known about this I would of immediately told them not to but I was unaware until recently as to the extent of the whole situation. I was under the impression that when they were going on holiday it was merely a paid for holiday as we all take but I didn't realise they'd bought into a scheme that allows them to use a room, and the complex facilities,that they apparantly bought for a small amount of time per year.
Cutting a long story short they attended the meeting and were led to believe that this was all wonderful and unfortunately for them fell for the long sales pitch after a few hours. They clearly stated that they didn't have the savings etc to pay for the usage but were told "don't worry we can finance it via Barclays so why don't I take a FEW details and you go off for some complimentary drinks and come back in half an hour or so".
When they did come back amazingly they had been "approved" via Barclays for a £20k credit account (!) and the cost of the scheme was £16k so they had "£4k to play with" (his words). The details that were taken were very limited (ie. contact details, did they work but not where they work, did they own their property but no further details on that, and did they have credit cards) and yet they walked away with a £16k purchase!!! As my mum works part time for herself (which she stated) and my stepfather doesn't have a huge income it is amazing that Barclays approved this kind of lending. When they got their mortgage 3 years ago, despite both of them banking with them and my mum having a Barclaycard, Barclays wouldn't go near them so how can this happen?!?! How can a lender such as Barclays lend £16k (with a further £4k buffer) without having any details of that would normally be required for this level of lending? I know if I walked into my bank and asked for £16k to part buy a hotel room I'd probably be escorted down to the local mental institute!
My stepdad recently had a mild heartattack, brought on by severe stress of which this had a significant contribution, so has had to drastically reduce his work hours as ordered by his GP but when he tried to contact Barclays about it they didn't want to know and said "if you're having trouble paying you'll have to go to a debt management company"! The payments on this are attracting a monthly payment of over £700 per month which I've only been made aware as they "didn't want to trouble me" over it.
To top it off the company who the scheme was with in Malta, Evergreen Travel Limited, has since left and a new company is in it's place. My stepdad did make contact with the new company and they've told him he'll still need to keep paying.
I really need some sensible advice but, although I'm angry at them for getting drawn into this, can we not have any "I can't believe they did that" derogatory comments please as these are my parents.
We have contacted Barclays who say there's nothing they'll do so I have contacted the Banking Ombudsmen this week to help although if anyone has anymore advice it would be most welcome as I can see my stepdad suffering another heart attack with the worry they are going through.
Thanks!

zppp

I suggest you have a look at this FOS case study arguing irresponsible lending on the grounds of mental health;

[FONT=&quot]50/4 W[/FONT]hether firm acted correctly in accepting loan application from customer who had learning difficulties and autism

Mrs C complained to the firm on behalf of her adult son, Mr C, who had autism and learning difficulties. She felt the firm had taken advantage of her son by agreeing to give him a loan. She said it should have realised that, because of his medical condition, her son could not have understood the nature of the loan or his legal obligations.
The firm defended its actions. It said it had known Mr C as a customer for many years. There was nothing to suggest he had any difficulty in understanding the firm’s other products (for example, his current account). And, at the time it had discussed Mr C’s loan application with him, it had no reason to think he had any difficulty in understanding the loan.
complaint rejected
We were able to look into this complaint because Mr C had given us permission to deal directly with Mrs C.
Both autism and learning difficulties affect individuals in many different ways. It should certainly not be assumed that customers who are autistic or who have learning difficulties are unable to understand financial transactions. They are entitled to have their applications for credit considered in exactly the same way as any other customers.
If, because of his learning difficulties, Mr C had been mentally incapable of understanding the contract, and the firm knew – or ought reasonably to have known this – then the contract would have been voidable. Mr C would not then have been bound by it. However, this was not the case.
The firm was aware that Mr C had been employed in a steady job for many years. Throughout that time he had been a customer of the firm and had conducted his finances without difficulty.
We were satisfied, from what Mrs C herself told us, that her son’s learning difficulties did not prevent him from understanding how ordinary banking products worked. More importantly, we were satisfied that Mr C had fully understood the loan transaction in question, and its implications for him.
The loan repayments appeared to be manageable for Mr C. We did not consider that the firm had taken advantage of Mr C by agreeing to lend to him, as his mother had suggested. We agreed with the firm that it had acted entirely correctly and that there was no reason why Mr C should not be liable for the loan.

phase3uk

Thanks for the reply but I would point out:
1. My mum or stepdad don't have any kind of learning difficulties, merely in their 50s and were taken in by the very skilled fraudster, sorry salesperson
2. No in-depth questions were asked as part of the application and the conversations between the holiday company and Barclays were not done in front of my parents, in fact they were actively encouraged to "go and get a complimentary drink"
3. Both of them have banked with Barclays for many years, 36 in the case of my stepdad, and they have clear history of their income and outgoings. Not anywhere would it suggest that they have available income for anywhere near the monthly cost

zppp

phase3uk wrote: »

Thanks for the reply but I would point out:
1. My mum or stepdad don't have any kind of learning difficulties, merely in their 50s and were taken in by the very skilled fraudster, sorry salesperson

I posted this to merely state that FOS will ensure that one has the mental capacity in order to take out a credit agreement. (and you were talking about a mental institute)

phase3uk wrote: »

2. No in-depth questions were asked as part of the application and the conversations between the holiday company and Barclays were not done in front of my parents, in fact they were actively encouraged to "go and get a complimentary drink"

Irrelevant. Nothing states that they have to ask a certain number of questions etc. All they have to do establish is affordability. As they were existing customers that should be automatic.

phase3uk wrote: »

3. Both of them have banked with Barclays for many years, 36 in the case of my stepdad, and they have clear history of their income and outgoings. Not anywhere would it suggest that they have available income for anywhere near the monthly cost

Banks have affordability criteria built into applications. In drawing down the loan, they must have been satified that the loan is affordable. You have sent it to FOS now, so the best thing to do is await their response.

worried_jim

I don't think there is any case for Barclays to answer to. Its just seems like a time share hard sell- unfortunately. I do hope that your parents can get it sorted soon though- good luck.

ILW

Your argu.ment is with the company that sold the timeshare. Barclays merely provided the finance.

phase3uk

ILW wrote: »

Your argu.ment is with the company that sold the timeshare. Barclays merely provided the finance.

So if the company no longer exists then what?

phase3uk

worried_jim wrote: »

I don't think there is any case for Barclays to answer to. Its just seems like a time share hard sell- unfortunately. I do hope that your parents can get it sorted soon though- good luck.

I do believe they do have something to answer to. How can they provide an unsecured credit agreement to two people who earn about £6k per year working part time for herself and approx' £18k full time (although now reduced due to illness)?
My wife and I earn approx' £50k and I doubt, taking into consideration mortgage etc, that I we'd get this by merely answering about 5 questions (with no proof) in a foreign country

ILW

phase3uk wrote: »

So if the company no longer exists then what?

Are they getting what they agreed to in the contract?

phase3uk

ILW wrote: »

Are they getting what they agreed to in the contract?

They're unable to get in contact with anyone from the company with whom this took place with as they're no longer trading so they cannot make bookings etc to visit. They have to book their time as and when they want to take it, not given a specific date/dates each year just an alloted amount of time

ILW

Was the loan to your parents,which they then paid the company with, or did the loan go directly to the timeshare company?