MSE News: NatWest and RBS warned over debt chasing methods

bigadaj

Mr_BARGAIN wrote: »

may i remind you this is a helpful site not a sarcastic one so please try and engage brain before opening mouth,,,,,, as someone said they don't have a crystal ball

Each case is individual but the widespread nature of excessive debt is the main reason for the hole that were currently in, my comments are general rather than specific and if people want to take them personally that's up to them. If the banks had been a little better at managing their loan books we wouldn't have had to bail them out after all.

Takeaway_Addict

Agree with Bigadj, don't see why banks can't guarantee their payment if the debtor has assets and has failed to pay regularly. They can't get it straight away so no doubt are losing money.

Takeaway_Addict

Mr_BARGAIN wrote: »

may i remind you this is a helpful site not a sarcastic one so please try and engage brain before opening mouth,,,,,, as someone said they don't have a crystal ball

There was no sarcasm in that posters comments. A Perfectly legitimate view.

bigadaj

Each to their own, though fairly unique to get thanked and criticised by the same poster.

chanz4

With charging orders does pay what is agreed with the court, then theres nothing really to worry about.

eggbox

Takeaway_Addict wrote: »

Agree with Bigadj, don't see why banks can't guarantee their payment if the debtor has assets and has failed to pay regularly. They can't get it straight away so no doubt are losing money.

The reason is because "unsecured" lending is a choice of paying a higher interest rate instead of attaching an asset as security to obtain a lower interest rate. The creditor accepts this risk in return for those higher premiums collected as part of the deal. How can it then possibly be correct to then allow creditors, who have benefited from these higher premiums through the risk of unsecured lending, to then be allowed to charge their debt against a debtors asset?

Especially when banks like Barclay's are still coercing customers with the following information found on their website; In answer to their own question "What is an unsecured loan?" there explanation is as follows;

"Unsecured loans enable you to borrow money without offering up security based on a major asset, like your home for example"

As Lady123 states above, who in their right mind is going to agree to an APR of 30% AND put their house up as security.

~Brock~

eggbox wrote: »

The reason is because "unsecured" lending is a choice of paying a higher interest rate instead of attaching an asset as security to obtain a lower interest rate.

And if you pay that rate in line with your agreed payments then there is no problem for either party and nothing is secured.

eggbox wrote: »

The creditor accepts this risk in return for those higher premiums collected as part of the deal. How can it then possibly be correct to then allow creditors, who have benefited from these higher premiums through the risk of unsecured lending, to then be allowed to charge their debt against a debtors asset?

The charge doesn't just happen overnight. There is a lengthy process that involves the normal 'in house' arrears reminder and collection process that usually only escalates to the courts if the borrower refuses to engage with the lender and make an arrangement that is realistic to their circumstances. The court process starts with a county court judgement followed by a payment order. Borrowers have the opportunity to defend and/or contest any part of this process. Only when a court payment order is broken does the court enforcement options such as attachments of earnings or charging orders become available. Again, the borrower has the opportunity to defend these. Judges only award charging orders where appropriate after the above process has shown no realistic solution

eggbox wrote: »

Especially when banks like Barclay's are still coercing customers with the following information found on their website; In answer to their own question "What is an unsecured loan?" there explanation is as follows;

"Unsecured loans enable you to borrow money without offering up security based on a major asset, like your home for example"

For the vast majority of borrowers that remains true, however all credit agreements, post Feb2011, are required to include a warning in all pre-contractual information (See s55A of the consumer credit act) that missed payments could lead to court proceedings that may include the repossession of property. Borrowers therefore are given the opportunity to enter into such agreements with their eyes open.

eggbox wrote: »

As Lady123 states above, who in their right mind is going to agree to an APR of 30% AND put their house up as security.

As above, for post Feb2011 agreements borrowers do agree to this!

And for all the 'unforseen circumstances' posters....it is clear that different people handle and cope with changes in circumstances differently.

The more financially astute, for example, may well take steps to protect themselves against the worst effects of illness or redundance by taking out appropriate insurance. Unfortunately, the popularist myth that all such insurance is worthless has done little to close the insurance gap that is so obviously apparent in this country.

I am not criticising the OFT action here by the way. If these banks have been going for charging orders in circumstances where the borrowers have been paying as per agreed arrangements then they deserve to have their knuckles rapped. I suspect, reading between the lines, that it has been DCA's that have actually been guilty of this practice where the debts have been sold on.

For all the OFT posturing however (and note they have not actually 'banned' the use of charging orders), the simple fact remains that these are a tool that is available via the courts for the securing of monies owed - whether from a credit agreement or otherwise. It is very unlikely that their use will ever be banned as this will then become open season for professional debt avoiders.

eggbox

~Brock~ wrote: »

And if you pay that rate in line with your agreed payments then there is no problem for either party and nothing is secured.

The rest of us have to, unfortunately, live in the real world. It seems, too, that you might have missed that a fair few banks couldn't pay what they had agreed and had to be bailed out by the taxpayer. Where was their financial astuteness?

~Brock~ wrote: »

post Feb2011, are required to include a warning in all pre-contractual information (See s55A of the consumer credit act) that missed payments could lead to court proceedings that may include the repossession of property. Borrowers therefore are given the opportunity to enter into such agreements with their eyes open.

Which is exactly the reason why the agreements prior to this date, that excluded those terms, should be exempt from Charging Orders?

~Brock~ wrote: »

The more financially astute, for example, may well take steps to protect themselves against the worst effects of illness or redundance by taking out appropriate insurance. Unfortunately, the popularist myth that all such insurance is worthless has done little to close the insurance gap that is so obviously apparent in this country.

Yes, PPI and the billions currently being repaid by Banks helped this enourmesly.

~Brock~ wrote: »

For all the OFT posturing however (and note they have not actually 'banned' the use of charging orders), the simple fact remains that these are a tool that is available via the courts for the securing of monies owed - whether from a credit agreement or otherwise. It is very unlikely that their use will ever be banned as this will then become open season for professional debt avoiders.

The OFT can't ban it can only advise. However, it recommend a £25,000 limit on Charging Orders as it recognised that creditors were chasing them unfairly. The Ministry of Justice, whilst agreeing with this unfairness, buckled to a £1000 limit as it feared creditors chasing bankruptcy if CO's were eliminated.

In its consultation paper the MOJ also stated,

"A decision to lend to an individual borrower should be based on an assessment of that borrower’s creditworthiness and ability to repay, rather than the possibility of securing the loan by means of a charging order if the debtor defaults. Furthermore, most lenders charge a premium on unsecured lending as compared to secured loans, reflecting the increased risk (arising from the absence of security)."

To allow a creditor access to "security" when they have already factored in the risk is both unjust and, I would say, an unfair business practice.

Scully15

bigadaj wrote: »

Alternatively debt is debt, and if you can't afford to repay it don't take the debt in the first place, as there's no reason why a creditor shouldn't look at getting debt from someone who has assets....

.....No, just mange finances responsibly, I've also had cancer but managed to ensure I wasn't massively in debt.

I'm glad that you survived your cancer. Others aren't so lucky and I'm afraid that the nature of your comment is akin to those people who try to sue hospitals when they splurge all their savings after being told they had cancer, but survive. Not everyone has savings, and not everyone can afford to keep up payments. It isn't through choice.


My husband and I had decent jobs, and even with advanced, stage 4, metastatic prostate and bone cancer, he still insisted on working. However, I was made redundant after being with the same company for nearly six years, and he eventually was forced through the cancer worsening, to give up work. We went from a living wage and no worries, to having to penny pinch at every turning. When he passed away in April 2012, other creditors came out of the woodwork, despite having agreed to a payment plan many years before my husband had been diagnosed with cancer. These were debts that he believed had been finished before we were even going out with each other.

No-one takes out any loan/credit card/mortgage expecting to be unable to pay it back.

Please have some consideration when replying to such a sensitive issue.

As for the RBS, I have offered them a settlement figure several times for my husband's loan and they refused. They were warned at first light that there were other creditors and the amount offered may significantly dwindle through time. It is a myth that your debts die with you.

Mahdu and Julia in the RBS Credit Management services are vicious, and even talking with the solicitor managing the estate, have been rude and threatening. They also said about putting a charging order on the home, however, they cannot do this because the debt is not jointly owned. If I hadn't dealt with debt management in a previous position, I probably would be terrified that I would lose the marital home. They are bullies and continually talk over any customer - be they professional or public Joe Bloggs.

I have escalated this to a formal complaint and will also be contacting OFT and Financial Ombudsman with regards to their behaviour. My taxes, like most of the working population, went to bailing them out and if they see fit to treat me like a piece of dirt for debt that isn't mine.

eggbox

Scully15

Can I ask why you are negotiating with RBS over your, unfortunately, late Husbands debts?