Irresponsible lending???

Kanga12

My step daughter collects bank accounts (for the overdraft facility) like other people collect shoes. She is a lone parent and is on benefits. She lives in overdraft, over running the £2500 limit she was given. She then applied for a flexible loan of £3000 at 29.7% APR over 42 months which she put into the second account. That was on Monday. Today is Thursday and she has spent it all and is now overdrawn on the second account. When the bank gave her the £2500 overdraft limit I went in and spoke to the bank manager and warned them re her proclivity for spending other people's money and running. She used to live in Germany married to a soldier. They separated due to her affairs and so she had to return to the UK. Prior to leaving Germany in October 2013 she took out a €2500 overdraft in the July. She spent the lot and left. This was always her intention. I knew the bank wouldn't take into consideration what I said but they were warned and how she didn't manage her spending is evidenced in her bank account with them. We have to take some responsibility as we have been bailing her out for years hence keeping her credit history in order. Finally my question, how can a bank lend someone on such a limited income, benefits, such a large amount of money, when her account is never in credit and will be paying her loan from an overdraft? I am sure she will not have told them that she doesn't have a job anymore so maybe she got the loan fraudulently. I am sure she won't have told tax credits either. Why do I care? Primarily because she is the mother of our granddaughter and secondarily because we are guarantors on her rented house. My second question, as a parent and grandparent what would you do?

Thrugelmir

Stop bailing her out. Sounds as if matters will naturally come to a head.

Pixie5740

It's irresponsible borrowing. You bailing her out is only delaying the inevitable. Helping her maintain a decent credit file is only assisting her in obtaining more credit. Let her default. Let her get a CCJ or two and then see how easy she finds it to get a loan or credit card.

What does she spend the money on?

My parents are in a similar position to you in that they are always bailing my brother's family out because there's children involved. My mum worries about what will happen when her and my dad are no longer around.

Kanga12

You are right - it is totally irresponsible borrowing and I think that finally we have to accept that all our good intentions of trying to teach her the right way to do things has backfired and we are simply enabling her errant lifestyle. The money is spent on clothes, beauty products and treatments and going out. She bought a car with a £1000 of the loan which she won't be able to afford to run - we've been down this road before. It certainly doesn't get spent on her child. I just don't want to see our granddaughter homeless and sofa surfing or living in the places our council will put her in. We have to let things run now though. I think I knew the answer, it's just a difficult one. Thank you for your reply.

DCFC79

Stop bailing her out, your not obliged to. You can help her by talking to her about it, help her sort it out, maybe she's the type of person who won't take the advice on board.

macman

How did you manage to have a conversation with the bank about your adult daughter's borrowing arrangements? Such information is confidential and the bank should not even be revealing whether she is a customer, let alone what she is borrowing, unless she has authorised the bank to do so.

SuperAllyB

OP never mentioned a conversation. Merely that he warned the bank manager, any conversation or even an acknowledgement that an account existed is speculation.

macman

Perhaps the OP could clarify then? Manager would not even give an appointment to discuss someone else's account without authorisation. I sympathise with the OP's predicament, but being guarantor on the house rental does not give them the right to intervene in daughter's credit arrangements.

Kanga12

I have signing authority on the main account given by my step daughter when she wanted us to bail her out and be guarantors so it meant we could keep an eye on things. It is convenient for her. It also means she can go into free fall without telling us but she knows we know. She puts things on Facebook too. For example she said she was going to finish her job in August at the end of her contract but then posts that she has gone away for the week, thus indirectly letting us know she has given it up. It was an apprenticeship in a school. She doesn't get that if that is what she wants to do then she can. We give advice and she does the opposite and then lies about it. She put a photo of herself on FB in the driver's seat of a car indirectly telling us about the new car. The bank has not been indiscrete. I am confident that I am dealing with someone who has a personality disorder. I just felt that the bank has been too quick to extend lending to someone in her position. As I said our main concern is for our grandchild. Our daughter is beyond help. Thank you for your comments.

Gaz83

Being guarantors doesn't mean you can "keep an eye on things", it means they can, and will, come after you when your daughter stops paying for things.

If it meant you could "keep an eye on things" then I'd suggest you'd done a pretty poor job!

Tixy

I would leave her to it. I would leave her to take out credit / buy cars / whatever and leave her to sort any mess she makes herself.
With the bank account - do you mean it is a joint bank account? if so then I would get it closed asap and get her to open a new account in just her name.

In terms of your grandchild - I would make it clear to her that you will not be offering any more financial help or bailouts. But you could tell her that if she is ever in a position where she cannot afford to feed him / care for him you are happy to help (assuming you are).