Miss-sold a loan from the government

ericctheking

Many people were miss-sold a student loan pre-1998.
There are many reasons why these loans were miss-sold.

1) They were sold as different to other loans because they were with the government. It wasn't explained that in the t&c s that the loans could be sold on.

2) They were promoted to minors studying at sixth-form colleges. The argument that this could happen is that they were lent without a view to a financial gain as the government held them. Now the loans are held by profit-seeking private enterprises who have a view to a financial gain from buying the loans.

3) They were sold as not having an affect on people's ability to get a mortgage as not reported to CRAs if the borrower isn't in default. They are now affecting people who have never defaulted ability to open even a bank account.

Herzlos

Any citations for these facts, especially number 3? I can't see how having a student loan would prevent anyone from opening a bank account. If anything having a credit history would help.

ericctheking

Herzlos wrote: »

Any citations for these facts

No. 2

Parliament!!!!!!!!! It's a long read but here it is;

http://hansard.millbanksystems.com/commons/1990/feb/15/the-student-loans-company

Taken from the above to show the miss-selling

"The Government always intended that students under 18 should be eligible for loans. We also intended that the scheme should satisfy the requirements of the Consumer Credit Act 1974. Section 50 of that Act prohibits the sending of documents to minors with a view to financial gain, inviting them to borrow money or to apply for information or to get advice on borrowing money. That section is untested. The words are lucid, but the application is unclear. The crucial words in the amendment are with a view to financial gain".

"The common-sense view, which I know hon. Members and the other place will take, is that the Student Loans Company Ltd. could not be construed as operating with a view to financial gain from loans."


Therefore, if to comply with the CCA the SLC could not operate with a view to financial gain then surely the sale of loans must be illegal to a private enterprise which has a view to a financial gain (ie. arrow/carval/erudio etc.)

CKhalvashi

I'd argue that the government hasn't made any financial gain from it, and if anything a financial loss on each loan.

Lungboy

Deferment is now able to be reported as a payment holiday by Erudio which could, in theory, lead to a bank refusing you an account or you being turned down for a loan. It hasn't happened yet though as far as I'm aware. I don't think anyone has even been reported as being on a payment holiday. That appears to be more like a threat to force borderline people to pay when they would otherwise defer.

ericctheking

No. 3


From moneyadviceservice.org.uk

https://www.moneyadviceservice.org.uk/en/articles/mortgage-payment-holidays

Deferred loans will resistered with CRAs ((this is what Erudio (who were sold the loans) say on their own website)) as on a payment-holiday.

Relevant quote from the government advice site!

Cons of a mortgage holiday



Even where your lender agrees this temporary solution, your credit file will be affected – this in turn could affect your ability to get credit in the future.

rizla_king

ericctheking wrote: »

1) They were sold as different to other loans because they were with the government. It wasn't explained that in the t&c s that the loans could be sold on.

T&Cs for the loans say very clearly that the creditors rights can can be assigned or transfered to anyone else without your consent.

ericctheking

CKhalvashi wrote: »

I'd argue that the government hasn't made any financial gain from it, and if anything a financial loss on each loan.

The private companies are taking a view to a financial gain. According to the law they are the new lenders now so it follows if they have the rights to be considered as lenders of the money and to receive full payment then the money was lent illegally in the first place by being promoted to minors.
Surely you don't support loans being promoted to minors by lenders with a view to a financial gain???

Pixie5740

This is all very interesting but what are you ultimately trying to achieve here?

CKhalvashi

ericctheking wrote: »

The private companies are taking a view to a financial gain. According to the law they are the new lenders now so it follows if they have the rights to be considered as lenders of the money and to receive full payment then the money was lent illegally in the first place by being promoted to minors.
Surely you don't support loans being promoted to minors by lenders with a view to a financial gain???

As no borrowing would have taken place until someone is 18 years, I'd argue that no loans have been given to minors with a view to financial gain.

Of course the private company is taking the view to a gain. If I ran my company with the view to making a loss, I wouldn't be very good businessman, would I?

ericctheking

rizla_king wrote: »

T&Cs for the loans say very clearly that the creditors rights can can be assigned or transfered to anyone else without your consent.

The T&Cs were not explained clearly to the people taking out the loans - equals miss-selling!
They were promoted in a very hard sell way (with sixth form college teachers even being in on the game) as being the complete opposite of this.
They were even promoted to minors!
Check out the promotional material for current student loans. Says the complete opposite of what is in the T&Cs

It has been shown in other cases of miss-selling that even if the T&Cs say otherwise then if the lender hasn't explained this to the borrower then it is a case of miss-selling.
When the promotion of the loan is the complete opposite of what is in the T&Cs and this is never explained to the borrower then this is miss-selling.