Loan sold under false pretenses

Spin_Guitarist

Hi,

Firstly, much credit due to Martin Lewis for championing the cause re excessive bank charges. I have been stung for over £700 of charges during a period of exceptionally difficult cashflow, so I will be following suit and making a claim shortly.

I have another problem with a loan hanging over me that I think I might have cause to appeal and have revoked. I would appreciate any advice on this matter from those in the know:

At the turn of the millenium I was running a fairly successful international business as a self employed trader. Unfortunately, the 9/11 attacks on New York indirectly caused a huge drop in the market for our services and my customers could no longer afford to hire us.

In early 2002 I set up a meeting with my bank - one of the big high street names - and explained the difficulty to the bank manager stating that I wanted to look at the option of taking out a business loan to bankroll the business for 6 months while we tried out new ideas. His response was that I couldn't be awarded a business loan because the business account had not been open for long enough - fair enough, I thought. "However," he said "We could give you a personal loan and maybe just put it down as home improvements".

He proceeded to fill out the application form and asked me "What would your best guess forecast be for next years turnover if you weren't having these problems". I suggested a figure, which he decided to use as my personal salary. He was able to offer me a loan immediately, and under the heat of the situation I decided to accept his offer hoping this might be a shot in the arm for my business.

Unfortunately, the business did not enjoy a resurgence and within a year it ceased trading. Since then I have been struggling to pay this loan off in addition to gaps in employment moving from one job to another and three years as a full time student trying to invest in my prospects. For the majority of this time the loan has been with "Collections" and has hardly decreased in value at all (in fact the full repayment value today is about 5% more than the original loan value) where had I been able to make regular payments the loan would have been paid off by now.

I feel that I was duped into taking the loan under circumstances where it was clearly not a sensible option to do so. However, under duress and the confident guidance of the bank manager, to whom this seemed like a perfectly normal routine, I was just oblivious to the fact I was being sold a loan under dubious pretenses.

What should I do about this? Do I have a claim to make, or will the bank just point out that it is my signature at the bottom of the agreement?

Astaroth

By making a claim you are going to have to admit fraud as well as the person in the bank which is something to keep in mind.

Was your company a Ltd or were you a sole trader?

If it was a limited company did you pursue the company for the debt of your loan to the business with the liquidators along with the rest of the companies creditors?

A11yson

When it suited you to be a party to a fraudulent application you were happy to do so. What the advisor did was wrong and unethical - but you did go along with it! I think you should be prepared to pay back what you borrowed.

Rafter

The others were right. The manager was trying to help you out and if you signed an application that was factually incorrect then it is your fault.

Hindsight is a wonderful thing and if you are never going to be in a position to pay this money back you should contact cccs and look at your options.

Trying to hold the bank responsible for your business failure is hardly fair on them. Be thankful you live in a society and time where the worst you will get for failing to keep up payments on your debt is a black mark on your credit file and your assets taken away rather than your freedom.

R.

AMILLIONDOLLARS

You said it yourself "had I been able to make regular payments the loan would have been paid off by now". Would you have tried to claim the money from the bank then?:rolleyes:

AMD

RichardJohn_2

Al_Mac wrote:

Where would the debt be if you had taken out a business loan? Would it still be yours?

Not if it was a limited company, no. The loan would be a debt of the business, not him.

jonesMUFCforever

RichardJohn wrote:

Not if it was a limited company, no. The loan would be a debt of the business, not him.

But still unpaid it would appear!

Astaroth

RichardJohn wrote:

Not if it was a limited company, no. The loan would be a debt of the business, not him.

The loan was to him as already stated by the OP

I have however known owners/ directors of Ltd companies to borrow money themselves personally and then loan that money to the company. I am in no way an accountant but explanations were that the amount a director can charge a company for a loan was greater than the interest they were paying and the overall tax liability was lower from the owners/ directors point of view.