Is this fraud?

lookingforadviceguys

Hey all,

I have a friend who's in a sticky situation and I was hoping some advice. He recently took out a couple of loans totaling some £50,000 and spent it on gambling. He said on the loan applications that he was earning a good mount in the £30,000s but he wasn't working.

He tells me that he is unable to meet the monthly requirements which is nearly £1000 and believes his only option is to go bankrupt, however I'm concerned that if he was to file for bankruptcy only a couple of months after taking the loans out and no income to prove he was earning as much as he said he would be done for fraud?

Any advice welcomed.

gfplux

If the loan was advanced on just his say so then there is no fraud.
If he forged documents to "prove" he was earning a lot of money, then that might be fraud. It is certainly a crime of some sort.
If he can't make the payments he will get caught in some way so going bankrupt will be on way out of part of the problem.
If you want to help your friend you need to get more information.

lookingforadviceguys

Thanks for the quick reply.

He did the loan applications online and said he was earning 30k a year however he wasn't. He said it was for the purpose of a new car but obviously he gambled the money away almost immediatly.

He never sent in any documents such as pay slips. All he did was sign and return the forms.

fatbelly

A BRO/U is possible

https://www.gov.uk/government/publications/bankruptcy-restrictions-orders-and-undertakings

•borrowing money that you know you can’t repay

I doubt there would be anything further as long as he is open about things.

gfplux

All I can say is the Lender Bank sound like fools and almost deserve to lose the money.

sourcrates

Hi,


Your friend need not do anything in haste.


I am assuming you mean unsecured loans, not loans secured on a property ?

The debt collection process can take a very long time, many months, even years, and goes through numerous stages of recovery before he`ll be looking at legal action.

Many people have taken loans, then had a change of circumstance before the first payment was due, your friend is essentially no different as far as the lenders are concerned, there would be no mention of fraud.


In fact, if anything, its the lenders who are at fault for not carrying out due diligence in assessing his income, or lack of it.

I would advise he puts his energies into sorting his gambling addiction first of all though, apart from letters and phone calls, nothing else will happen fast with the debts.

lookingforadviceguys

Thank you very much for the responses.

His and my main concern would be that -

1. He lied about working.
2. He invented an income.
3. He took out the loans with the sole principal to spend them gambling .

Surely the bankruptcy officer would pass this onto the police for fraud? And he'd be given jail time?

sourcrates

lookingforadviceguys wrote: »

Thank you very much for the responses.

His and my main concern would be that -

1. He lied about working.
2. He invented an income.
3. He took out the loans with the sole principal to spend them gambling .

Surely the bankruptcy officer would pass this onto the police for fraud? And he'd be given jail time?

Exactly why I suggested he ignores the matter until the accounts are long defaulted and sold on to collection agencies.


Most debtor details are lost in the mists of time, and don't get passed on, no one will know or care, that he lied on the application.

fatbelly

lookingforadviceguys wrote: »

Thank you very much for the responses.

His and my main concern would be that -

1. He lied about working.
2. He invented an income.
3. He took out the loans with the sole principal to spend them gambling .

Surely the bankruptcy officer would pass this onto the police for fraud? And he'd be given jail time?

Unlikely. Have a look at this case and be amazed that there was no criminal prosecution, just a BRO.

https://www.gov.uk/government/news/footballer-scores-own-goal-and-handed-15-year-bankruptcy-restriction-order-by-court

Money_maker

Is it really possible to get 50k unsecured loan without evidence of repayment means?

sourcrates

Money_maker wrote: »

Is it really possible to get 50k unsecured loan without evidence of repayment means?

Admittedly, it sounds a bit suspect, that's why I asked if they were secured loans or not, as the absolute most a bank will normally lend, unsecured, is approx. 25k, at any one time.

And I find it difficult to believe they would part with that amount of money without doing affordability checks, and relying exclusively on what it says on the application form.


Are you sure this friend is been totally honest with you OP ?