Debts Caused By Bank Ruining Business

BTP1956

Hello i was just wondering if anybody has been put into debt ...
As we have by the banks ruining our buisness which then stopped us servicing our personal loans c/c and o/d as we then didnt have any income from the business.

This is an ongoing issue with the banking ombudsman the FSA and the ICO

I will put further details if need be but just minimal at the mo

our bank in question is Lloyds(if i can not name them please remove the name)

They have now sold our debts on without informing us of their intentions which in the T&Cs says they have to do

Also by doing this they have flouted the laws when passing on data which should be protected under the 2005 act

This all started when we wanted to expand our business and went for a business loan and was told by our business manager that we shouldnt go for a business loan but use the available credit that we had on our personal c/c to expand almost £8000
this we used to order goods to expand
2 weeks later they withdrew our available credit which we would be using to pay for goods 30 days after receiving
without notifying us of their intentions until after the event

we were just wondering if anybody else has had this with the banks and how they got through it

regards btp1956

BTP1956

amazing 100 views no replies

hello would have been nice

marliepanda

1. It's a weekend, people may not have time to reply.

2. You've already taken this to a financial ombudsman so must have had advice from there also, so you may know more than people on here.

3. You don't give very much informations to comment on.

4. It's very difficult to understand due to your writing style.

BTP1956

hi thanks for your reply

i will wait for a while to see if anybody has experienced this also

i have had advice but was wondering if this bank has affected other prople

kind regards btp1956

dancingfairy

It might be worth a chat with Business Debtline.
Your problem appears to be:
1) that you were badly advised?
2) that the debts were sold on and you weren't advise? This appears to be a side issue and you grasping at straws although obviously if it's wrong, it's wrong.
3) that you followed the advice of your adviser and then found your credit facilities withdrawn after you had ordered goods and now have no way to pay for them?
What have you got in writing from your bank manger to suggest this course of action? Without anything in writing as to what was requested and what was offered then you will have a much harder time. What was said about getting independent advice to see if this was the right course of action for you? What due diligence/research did you do? If not why not? (I'm not having a go at you by the way but if you are going to go head to head with the bank then you need to expect that they will try and cover themselves and suggest you should have sought independent advice/done your own research).
You can do a Subject Access Request (SAR) to the bank which should give you all the information they hold on you. I'm not sure how this would work given that you are running a business though but as you have a personal account I think you should be o.k. You basically need paperwork to prove that you were advised of a particular course of action by the bank manager. A SAR should cost you £10.
Once you have built your case then you should put a formal complaint into the bank (make sure you clearly label it as a complaint to make sure it gets dealt with by the right department). See where things go. If you are still not happy with the decision then I think as a personal account customer then you can take it to the Ombudsman but you have to have exhausted the banks internal complaints procedure first.
Oh, I'm not sure how far you'l get with the fact that the bank withdrew the overdraft unless you can prove that it is linked to the advice the person gave you. What made them review your account and remove the overdraft. You'll need to prove some link. I would imagine under the terms and conditions they can withdraw the overdraft at any time though. You might have a case against the original advice though.
Good Luck
df

Stewart_78

Hi OP, this is similar to what happened to us. I have a company which at the time had a lease on a unit and staff. Our bank pulled our 18K overdraft out of the blue, just as we had paid in some money. They waited until the account was in the black and cancelled the OD. Not a word of warning. A few months earlier they were telling us to expand, saying they were right behind us. I was told they had had a sector warning and were pulling in all credit in that sector. In retrospect what I should have done at that point is to turn off the lights and call in the liquidator but I didn't. I used my own cards to pay suppliers. Once they were maxed out, the rates were jacked up to 33% or so meaning I couldn't afford the interest. I now realise I could have avoided this by reading the letters properly and closing the cards but I was in up to my neck at this point.

Fast forward, the business is a tenth it's original size and staggers on. I am in a DMP with a trashed credit file and a huge debt to pay. I can't borrow to invest in the business, I can't get much supplier credit and every day is a struggle to stay afloat.

My mistakes? First was to ever believe a word that comes out of a banker's mouth. Second was not to realise that they had effectively closed the business that day. Thirdly was to attempt to use my own personal cards to bail it out when it was clear the banks didn't want to know any more.

I didn't take any action. It seemed pointless. Everything they did was in their terms.

BTP1956

hi dancing fairy and stewart78 thanks for your input i will now expand slightly

The available credit ie 8000 was on my personal credit card i only became aware that they had withdrawn this as we were away with friends for a few days and went for a takeaway and tried to pay with it as id left my debit card in my other jacket it was refused.
I went to bank next morning to be told they had withdrawn the available credit got back home to find letter advising us of this.

ive just received lots of documents after doing a SAR but the vital piece of evidence the recorded phone call when i was speaking to my business manager has been deleated under their policy/timescale of keeping recordings or so they say

They also must of realised that withdrawing our credit would have knock on effects that would mean the business folding and me being without an income to service my personal debts

Stewart 78 im sorry to hear you have had a rough time of it as well and are now left with a daily struggle to keep going do you know if you have a case against them for ruining your business re the way thay acted withdrawing your o/d without warning

Re our personal debts we were payng a fixed amount which they agreed to via standing order this had just been reviewed in the may/june last year then in july they sold them on to Cabot without warning

This is now being investigated apparentlly if this is what they intend to do they have to notify you of their actions they didnt notify us and should have done

By selling this on without notifying us they have gone against the 2005 data protection act on 4 counts ICO looking into this


Re the removal of our available credit we still cant understand why as we were fully paid up with everything either businsess or personal at that point
But stewart 78 made a point re a sector warning if this what happened im sure they should still be obliged to inform you of their intentions in the T&Cs

kind regards btp1956

Skinnylatte

I'm not sure I really understand your post. You were refused a business loan and advised to fund the business through personal credit cards?You ordered goods intending to use your personal credits cards to pay for them and then they cancelled your cards before your paid for the goods - is that correct?

BTP1956

hi skinneylatte

yes that is correct that was the start of this mess

iolanthe07

It sounds as if you have been treated very badly by the bank, but I do know that all banks reserve the right to call in overdrafts at any time without notice. Also, there are lots of examples on this board of people having their debts sold on without being told. Good luck with your struggle, but I fear it will be a bit David and Goliath - don't forget that David won!

dancingfairy

You might find the user magpie cottage useful on this one as I think she (I think she's a she!) deals with complaints against banks. You could try and pm her and see if she is able to help.
I'm afraid I don't have any specialist knowledge and thankfully I have never been in the situation you describe. It sounds like you have made a good start though with the SAR and know who you need to complain to.
You might also find others who had similar problems maybe in the small business section on here or maybe the banking part of the forum?
Best of Luck
Do keep us updated on things.
df