Loans - Is it illegal to ......

Carmen88

..... take out a loan in your own name with your own details and then pass the money on to someone else?

My father in law took out a loan with his bank and then gave my husband the money to help us out. Although technically my father in law pays the loan back from his bank account me and my husband pay him back every month what his repayment is into his bank.

Recently my father in laws bank has contacted him and asked him to call in to the bank to discuss lowering his interest rate on the loan. When he got to the bank they did not discuss the interest rate at all and instead he was asked a lot of questions about the loan (mentioned above) he took out and why my husband pays money into his account every month and what it is for? They have now arranged for my father in law to return this weekend to 'watch a video about loans'.

It seems to me that he has been 'tricked' into going into the bank and i don't understand all of the questions about his account and what goes into it.

Can anyone explain to me why the bank could be acting this way? Is it illegal to do what he has done?

Just a few points to mention. He has not lied to the bank about anything he has done regarding the loan and the reason for it (on application). He used his own correct information. He has always paid the repayments on time and in full. My husband didnt ask his father to do this for him he did it of his own accord.

My father in law did ask the bank what was going on but they will not give him an answer and he is fairly confused as to what is going on especially in regards to the loan video he has an appointment to watch?

Thank You for any help!

jimmy*c

I'm not sure on the legal side of things, but if the loan purpose was filled out correctly (eg, "other" for use of loan) then I don't see why he could be penalised for distributing funds to another family member. The debt is in his name, and as far as the lender is concerned, HE will pay it back.

fwor

Provided he did not misrepresent anything in his application he can do what he likes with the money.

I doubt the video will be anything to do with this. It's far more likely that they want to lend him more money and the video will be a sales pitch.

If the bank is suggesting that seeing the video is anything other than optional, I would suggest that he tells them to get stuffed - in the nicest possible way, of course.

nicholaswitchell

fwor wrote: »

If the bank is suggesting that seeing the video is anything other than optional, I would suggest that he tells them to get stuffed - in the nicest possible way, of course.

No matter what the bank were suggesting in terms of watching this video, I'd be telling them to F.R.O.

In the most rude way possible.

CKhalvashi

Not heard of this before, but seems a sales ploy.

Which bank is it, out of interest?

somethingcorporate

All about the sales!

bargainbetty

Please let your father-in-law know that he has done nothing wrong, and does not have to attend the meeting or watch a video at all. Personally, I wouldn't waste my time going there at all.

jonesMUFCforever

Is this Lloyds bank at all?

They make customers sit through videos for nearly everything these days - its to stop you blaming them for any future misselling.
If you have ever claimed PPI back its your fault!!

Clive_Woody

Ask the bank to bring the video to his house for him to watch if they really need him to see it.....and tell them to bring biscuits.

ConsumerWizkid

It's not illegal at all! They just want to sell him something probably.

rogerblack

Dependent on the state of the father, there may be concerns about if he's being financially abused.
While it's clearly legal for someone to take out a loan and freely give money to someone else - if someone is being coerced into doing this, especially if they are not able to coherently explain why - real and legitimate concerns arise, and should and must be brought up by the bank staff.