Help, bank gave OAP a loan she can't afford without doing a credit check

dealer_wins

Is the bank at fault here.

She approached them asking for help. They offered her a solution, and she must have thought she could afford it otherwise she wouldnt have taken it right?

As others have said the best advise is to refer her to a debt charity, who will help with dealing with Barclays to agree an affordable payment amount.

Lioness_Twinkletoes

I take it she has spent the money? If so, follow the advice of both Tixy and Davethemus. Both give solid advice.

She has absolutely no right to have the loan written off. She took the money and, presumably, spent it. She understood that well enough!

Zabki

She spent the money on rent (tiny studio flat so cheap as can be) and food (no luxuries mainly pasta and oatmeals).

The initial overdraft was paid by the loan but as she couldn't really afford the loan in the first place and the loan repayments together with her bills and food cost was higher then her incomings, only basic state pension from the two countries she has worked in. She went to the bank for help and was convinced to extend the loan, again no credit check done, but this just made the debts worse.

This is the stage where I found out what was happening and said she should complain to the bank and that she does not need another loan she needs help with the repayments and that this person should never have been allowed give out loans to vulnerable people.

Unfortunately I do not live close and I work full time otherwise I would have gone with her to the bank.

Will contact the charity mentioned above and help her write to the bank to complain to see if interests can be frozen and minimum payments agreed to, as advised by Tixy and antrobus, thanks.

Tixy

How much does she owe on this loan?

Does she have any other debts?

Apples2

Freezing interest and minimum payments are the way forward, which can be achieved without the complaint. No harm in trying though.

If she hadn't received the loan, how would she have paid the rent and eaten food? It seems both were only available due to the loan.

The BMW salesman wants to sell me a BMW, he doesn't say I would be better off catching the bus.

The banks aren't debt advisors, they are (as you have discovered) salesmen.

For debt advice, talk to debt advisors, not the bank.

Reduced payments will affect her credit file but it's not worth worrying about that now.

sleepless_saver

Is she getting the benefits she should be getting? http://www.moneysavingexpert.com/family/benefits-check

pvt

Zabki,

You haven't made it clear whether the loan is the reason for your friend's financial predicament, or whether she was already in financial difficulty.

If there was already an overdraft, then she was already living beyond her means. As has already been said, the loan to pay her overdraft off was probably at a much better rate than the overdraft, so it is arguable that the person who suggested/arranged it was being helpful.

It is just your opinion that they should not have given her the loan.

As for criticizing DaveTheMus for suggesting she improve her English: It was you in your first post that commented on her poor English - if it wasn't pertinent then why mention it?

Monkeyballs

May not be the case here but I thought it worth mentioning.

If someone banks with Barclays (maybe others too but I can't confirm this) for a long enough time Barclays look at the habits of the customer and sometimes makes offers based on trust that the customer in question has demonstrated good habits... This might be why she was offered a loan in the first place.

Obviously this has it's plus and minuses.

MB

Bantex_2

Zabki wrote: »

She spent the money on rent (tiny studio flat so cheap as can be) and food (no luxuries mainly pasta and oatmeals).

The initial overdraft was paid by the loan but as she couldn't really afford the loan in the first place and the loan repayments together with her bills and food cost was higher then her incomings, only basic state pension from the two countries she has worked in. She went to the bank for help and was convinced to extend the loan, again no credit check done, but this just made the debts worse.

This is the stage where I found out what was happening and said she should complain to the bank and that she does not need another loan she needs help with the repayments and that this person should never have been allowed give out loans to vulnerable people.

Unfortunately I do not live close and I work full time otherwise I would have gone with her to the bank.

Will contact the charity mentioned above and help her write to the bank to complain to see if interests can be frozen and minimum payments agreed to, as advised by Tixy and antrobus, thanks.

So it appears that if she hadn't been given the loan she would have evicted and made homeless.

Armorica

With enough complaining you might be able to get them to cancel the extended debt.

But as others have said, she agreed to the loan and has used the funds. The bank is unlikely to cancel it; only agree terms. And a loan is likely to be better in the long run than an ignored overdraft. Get a sensible repayment plan agreed. Complain enough to try to get a lower interest rate (potentially down to zero).

Will also help if you make noises about what incentives the person who 'sold' her the loan was on. The banks are currently in trouble for poor incentives. This is the kind of stuff the press like.

http://www.fca.org.uk/firms/being-regulated/meeting-your-obligations/firm-guides/systems/risks-to-customers-from-financial-incentives