Loan declined but money received.

Gareth29

Help needed. I took a loan out back in 2011 and filled out an application which was later declined. Few days later I woke up with £25,000 deposited in my account. Some one from the loan company rang me that day to ask for the money to be put bank in to the account. I did not trust a random person asking to put money in to an account that I did not know nothing about so made the monthly payments every month. Long story short the loan defaulted which I did not receive a letter of warning which has caused me so much stress trying to gain credit for mortgages etc. Today I asked for a copy of my contract and before long they slipped up and admitted the loan shouldn't have been put in my account and have appolagised for the stress caused. The account is now froze and is now with a team to investigate. Loan remaining is £23,300 which was £38,000 so paid a fair chunk already. With the investigations now In progress what are my options I would like the loan completely gone and my credit file restored to normal with the default gone. They have basically said that it was a bank error and all the corresondence confirms that. The customer service advisor rang me back at 5pm today and said after a meeting with colleagues they all agreed it was a bank error but cannot be 100% sure until further investigation by a higher department.

fwor

Sounds like there was fault on both sides (because if the loan was declined you should have known that the money was not yours to spend), but in your position I would suggest that they should accept a deal where you pay only the £25k back (at the amount per month that you were meant to pay back - but obviously you would make a lot fewer repayments) - so in effect you will have had use of their £25k interest free for six years.

It certainly seems reasonable that they should remove the default from your file, because you can't default on a loan that you never officially had!

You should probably also ask for a goodwill payment to compensate for the stress and messing about - no idea how much they would offer for that, but no harm in asking.

enthusiasticsaver

If you knew it was declined then you should have paid it back immediately as they asked. They should have accepted the error and maybe made you an offer at the time. A bit of a mess all round but you are not totally innocent in this. You have had the money so should pay it back. What is the bank asking you to do?

Gambler101

Really lol

Pay back the money which you obviously wouldnt have touched as you know you were declined already!!

CKhalvashi

Not speaking for the OP (other than what they should have done), but for anyone that reads this thread in the future.

Best thing when OP received the phonecall should have been to call the finance company on a phone number they'd found for them by independent means and dealt with the situation.

The loan company has made a mistake, I accept that, however OP has also been dishonest by spending money they knew they shouldn't have had access to.

There is fault on both sides, however it should never have got to this stage.

Gareth29

I agree it is abit of a mess. For 6 years they had me convinced that the loan and contract was inforced. Lady on the phone yesterday even tried to say that the decline letter was an error but fair play to her she done some research and found out that I had rang the manger to ask why I was declined which at the time was due to income. So at the moment all 6 years worth of evidence is being passed on to a higher team to investigate. The account is now froze and payments stopped until the investigation completes.

System

Even if there is a mistake they're entitled to ask for the money back.

redpete

I read it that the OP received 25k despite being told they were declined, ignored the request to return the money ("did not trust a random person" - really!), kept and spent the money, paid the monthly repayments until something happened and they decided to stop paying, and now wants the 'loan' written off and the defaults removed.

Some people!

Unfortunately it will probably happen.

Arleen

redpete wrote: »

I read it that the OP received 25k despite being told they were declined, ignored the request to return the money ("did not trust a random person" - really!), kept and spent the money, paid the monthly repayments until something happened and they decided to stop paying, and now wants the 'loan' written off and the defaults removed.

Some people!

Unfortunately it will probably happen.

No it won't. The remedy here is to allow OP to repay the 25k at pace they can afford, and that is what will happen. Free of interest though, most likely. No one is going to just give him 25k gift, because there isn't even good PR story to take from it.

PeacefulWaters

Are people really this foolish?

TrustyOven

redpete wrote: »

I read it that the OP received 25k despite being told they were declined, ignored the request to return the money ("did not trust a random person" - really!), kept and spent the money, paid the monthly repayments until something happened and they decided to stop paying, and now wants the 'loan' written off and the defaults removed.

Some people!

Unfortunately it will probably happen.

Do not chastise the OP because of the highlighted bit!

What the OP did was very logical.

What they should have done is to phone / email / write to / visit the creditor and verify the situation and handle accordingly.