Irresponsible lending to pensioner

ruth2561

Hi


My mother is 70, she has an income of £600 per month approximately (Pension Credit) and utilities of £160 per month and food on top of this.


Over the last few years since my sister passed away (she used to financially support mum monthly payment.) I have discovered that as well as living in a £600 overdraft mum has borrowed £10,000 from her bank. Repayments on this loans which has been topped up twice are £290 per month.


Is it responsible lending on the banks part to lend 50% approximately of a very small income for a personal loans? Especially as they know with her outgoings it leaves mum with £150 per month to feed, cloth herself and pay for general living.


Is it worth complaining to the bank and the Financial Ombudsman with a view to getting some if not all of the loans written off? I was livid when I found out the level of repayments.






The bank have full knowledge of her income and outgoings as they often sit down and go through it with her.

miketaff1408

irresponsible lending or irresponsible borrowing?

She has taken out the loan willingly, enjoyed the money and topped it up twice?

I doubt there is much to be done.

midnight_express

What has she done with the money ?

ruth2561

I don't deny that she has taken the money and spent it, this is mainly on cost of living expenses as the loan has meant she has very little disposable income. As I stated my sister used to provide for her before she died but there was a loss of income following her death.


Whilst I don't dispute that she shouldn't have taken the loans my grievance is with the bank for lending out 10K for someone who clearly doesn't have the means to support the repayments.

Gaz83

Did she borrow the money before or after your sister had died?

Does she have any savings?

ruth2561

Hi she borrowed it after my sister died, steadily over the last 8 years as she has struggled to make ends meet.


Mum has no savings.

GwylimT

Does she have any defaults?

She is an adult and if she was unable to make her own financial decisions a nominated adult would make them for her.

£150 a month is plenty for food and clothes for a single person.

She either needs to cut down to live within her means, if this is not possible she could downsize or you could help her financially in place of your sister.

Caz3121

Has she had a benefits check to make sure she is receiving all the benefits she should?

Whilst not making ends meet has been worsened by debt repayments being required, it appears before she took any debt on she was living beyond her means hence needing to need money from your sister and then subsequently borrow
What would have happened if the bank had rejected her loan application? would she have gone without luxuries or necessities?

Whilst addressing the debt repayment is key, it is also important to address the route cause of the debt...if she did not have the debt to repay, would she be able to live off her income...as previously she could not without further help

ruth2561

Hi thank you for the reply, yes she needs to live within her means absolutely - however her disposable income is now very low so its a vicious circle.


Downsizing wouldn't help as the value of her property probably wouldn't buy much to make it effective.


I do try to help but I am bringing up three children on my wages with a non paying ex husband (that's a whole new topic and thread!)


Another concern is that the bank will continue lending until she has nothing left to repay it with and then start pushing for her house. Maybe I will write to the bank detailing my concerns and making it clear that I will complain if any future lending is considered.

PeacefulWaters

ruth2561 wrote: »

My mother is 70

This makes her an adult.

she has an income of £600 per month approximately (Pension Credit)

I assume this is minimum income guarantee.

Over the last few years since my sister passed away (she used to financially support mum monthly payment.) I have discovered that as well as living in a £600 overdraft mum has borrowed £10,000 from her bank.

It sounds like she never learned to budget.

Repayments on this loans which has been topped up twice are £290 per month.

It is quite traditional to have a monthly payment on a loan.

Is it responsible lending on the banks part to lend 50% approximately of a very small income for a personal loans? Especially as they know with her outgoings it leaves mum with £150 per month to feed, cloth herself and pay for general living.

It doesn't seem that clever on their part. It seems even less likely that Mum was being responsible.

Is it worth complaining to the bank and the Financial Ombudsman with a view to getting some if not all of the loans written off? I was livid when I found out the level of repayments.

I think that you'd need to show that the bank didn't follow its own lending criteria. Even if you did, I doubt that a favourable ruling would lead to debt being written off.

A single person could easily feed and cloth themselves on £150 a month. What else does that £150 a month pay for? If the bank can show that they've assessed income and left enough for an individual to sustain themselves then I'd be amazed if the FOS ruled against them.

Now, if Mum has no assets and doesn't pay ... the CCJ / default that followed would reduce her chances of borrowing ever again. (EDIT: just noticed she is a homeowner).

In my view, you'd be better off sitting her down and working through a strict budget with her. Then ensuring she lives to her means.

chesky

Your mother is 70 now but she was only 62 when she started borrowing. Was she not working then?
There is further assistance she can get with the help of her local CAB - via water sure plus and various utility co. Trusts. Also they will help with debt repayments and budgeting and, if necessary, a DRO.