Guarantor Loans - what happens if you didn't sign a contract?!

Rocker_89

My friend had found out that her boyfriend (at the time - they've split up now) took out a loan and put her down as a guarantor without her knowledge.

He's now defaulted on the loan (he has enough money to pay but chooses to take the money out of his account when the loan payments due so that he doesnt have to pay it) and they've started hounding my friend for money! She hasn't signed any agreement and didn't realise he'd put her down as the guarantor! Do the company have any legal rights to make her pay the money?!

pauletruth

odd i thought they paid the money into the guarantor account.

Janie4Now

She can't be a guarantor without agreeing to it. Maybe she signed something without realising what it was? The got her details from somewhere...... get her to ask the lender for a copy of the agreement and then she will know for sure.

Fae

I thought Guarantors had to sign an agreement, is it possible that he forged her signature ? in which case it would be fraud.

Fae

Edit crossed with the above better advice

JuicyJesus

Rocker_89 wrote: »

She hasn't signed any agreement and didn't realise he'd put her down as the guarantor! Do the company have any legal rights to make her pay the money?!

If there is no signed agreement then the debt is unenforceable under the Consumer Credit Act, which means that (good news!) they cannot enforce the debt in a court. So they cannot make her pay the money.

Bad news time: they can still wreck her credit history if she doesn't pay the money, since enforceability and reporting to credit reference agencies are two very different kettles of fish.

What needs to happen is she needs to call this company pronto, or better yet putting it in writing (in fact, do this as preference), stating that she was unaware of the existence of this guarantor arrangement, and could they kindly supply proof of it or else stop hassling her for the money and also correct anything they've placed on her credit file. Theoretically they could write back and ask her to send a cheque for £2 to obtain a copy of the CCA agreement, but I doubt this will happen.

Assuming she's telling the truth, the delightful side of this is if she decides to get the police involved they will be very interested in her ex's fraud, and he may win a fun trip to the police station. Fun for her, that is; he may well not enjoy it very much, being arrested and all.

iolanthe07

If there is no signed agreement then the debt is unenforceable under the Consumer Credit Act,

This used to be the case, but not with loans taken out after April 2007. It sounds as if the signature may have been forged, though, and this would be a criminal matter.

pvt

Rocker,

If your friend is on speaking terms with her exbf then she might want to ask him first.

I'd wager that he duped her into signing the document and she had no idea what it was. If not, and he forged her signature, then knacker of the yard will be most interested in interviewing him .... with a half-brick.