Mis-Sold Loan? Please help

s1lverman

Hi folks
My sister in law needs some help, regarding a bank loan, and I’m hoping that you can offer her some advice.
In June 2008 her young son (18) took out a £3000 car loan with RBS. The interest rate was 25% (ouch!) as he had only been working for a couple of years and had a short history with the bank.
In October 2008 he wanted to trade up his car (like they do) and went back to RBS for a top up loan to £11000. They said they could only give him that much – and a better interest rate (10%) – if he got someone, like his mum or dad, to come in with him. They gave him the loan agreement to “think about it”.
He told his mum that he could get the extra money, and a 10% interest rate, if she signed “this bit of paper”.
Now, no excuses, but my sister in law had just recently buried her mum so was in a bit of a state. She signed the agreement without reading it.
Yes – it had put her down as “guarantor” for the loan.
The bank then accepted the loan agreement without anyone speaking to her or asking her to come in for an interview.
All the subsequent loan paperwork and statements were opened by her son, as he lived at home and thought it was his loan.
So my sister in law had no idea she was “guarantor”.
Her son lost his job in August 2009 and started to default on the loan.
Shortly afterwards he moved away from home.
RBS sent out their usual letters, regarding default actions, and my sister in law then realised what she had done.
She has been paying her son’s loan since December 2009 as he is still unemployed.
I feel that she has been naive but that the bank has mis-sold the loan as they did not speak to her before setting it up.
She realises that the loan has to be repaid, but perhaps RBS could waive the interest charges.
Could you please give her some advice?
Thanks
Leo

_Andy_

My advice for her is to read things she's asked to sign before signing them.

[Deleted User]

What is the wording on the form that she signed?

opinions4u

I feel that she has been naive but that the bank has mis-sold the loan as they did not speak to her before setting it up.

There is no requirement to talk to a loan applicant.

Hundreds of thousands of people a year take out credit without being interviewed by the lender.

Tixy

Very unlikely to get RBS to agree to waivering the interest or any concession. The loan wasn't mis-sold. She and son had the agreement in their possession and both signed it. They don't need to actually speak to a person for a loan application.

Can she afford the loan repayments? if she cannot and can demonstrate this to the bank then she could offer reduced payments and could see if they will consider freezing interest - but its likely a default would be registered on her credit file.

What did she think she was signing when she signed the form bearing in mind son was an adult?

As an aside - has she suggested to son that he sells his car to help her make the loan repayments?

Peelerfart

Sympathy,

But no case to answer I'm afraid,might be worth asking the bank but if you get anything from them I'll be amazed.

intranicity

Can't the son sell the car to help pay this off? If he's out of work, I doubt he can afford to run it?

KingElvis

Yeah what happened to the banger he wasted the cash on?

s1lverman

Thanks all. Pretty much what I'd told her already.

She's well aware that she should have read the agreement before signing it- that was the first thing I said to her after "Doooohhhhh!!!!!"

To make a sad tale even worse - ths son crashed the car shortly after he bought it and sold it for £700. He kept the money when he left home saying "It was my car".

As for the loan he'd now saddled his mum with - he said "It's only a loan"

Kids - eh?

s1lverman

"What is the wording on the form that she signed? "

Thanks zx81 (I had one of those!)

I'm getting her to send me a copy, but don't hold out much hope

chalkie99

s1lverman wrote: »

son crashed the car shortly after he bought it and sold it for £700. He kept the money when he left home saying "It was my car".

As for the loan he'd now saddled his mum with - he said "It's only a loan"

Kids - eh?

£11k loan (madness in itself for a car at that age) and sold for £700! :eek:

Sounds like she was mis-sold a son.