Debt Consolidation - When is it irresponsible?

jmurphy84

Hi

I only recently found out that my wife took a consolidation loan of 19.9% APR. Basically the same price as most credit cards.

She’s not very savvy when it comes to money and I feel that the bank has acted irresponsibly and taken advantage of her. I also don’t believe they asked her to consult free lending advice first if she has debt troubles. She suffers from severe bouts of anxiety and money is one of the causes.

My wife wanted to own it and never passed it by me. I had trusted her that it was a good decision when she told me and I remember this explicitly that she got a “good rate”.

My post is basically does this constitute a poor lending practice and would we have a case if we raised a complaint with the financial ombudsman?

What if they told her and convinced her she was getting a good deal on the phone do we have a case that this was poor lending practice?

Personally I’m disgusted at the lending practice the bank has shown. They’ve taken her for a ride and at the very least it’s morally reprehensible to lend at that level.

The bank is Nationwide - I will never bank with them personally as I feel they are a poor lender.

Is there any point in raising a case here? The problem is she’s basically acted with ignorance due to her anxiety (which she has sought GP and counselling for before)

What constitute poor lending practice in this case?

Thrugelmir

Loan rates aren't negotiable. The individuals credit rating (internal score), the amount and purpose will determine what interest rate is offered. Onus is on the borrower to shop aound. Decide whether to accept or not.

Plenty of free advice is available for people with debt problems. Expecting a lender to micro manage your wife's affairs is beyond a reasonable expectation.

jonesMUFCforever

What was the rates she was paying on the old debt?
Is she able to comfortably make the loan repayments?

Only the best customers get the best rates.

Look at it this way if she had not amalgamated the debt would she have paid it back by the time the loan is repaid?

If she has some spare funds she can overpay to reduce the interest paid.

So answer your question has she been given poor advice - no way can we tell because we don't have the figures.
Come back with more information.

System

I'm failing to see where there is any misselling. The fact your wife has made a financial decision you don't agree with doesn't make it misselling. The fact the APR offered is higher than you would have got, probably due to her less impressive financial standing, doesn't make it misselling.

Misselling with PPIs happened because people were told they had to have it to get a loan, were sold it when they were completely ineligible to make a claim or weren't even told there was a PPI agreement in place. Just because you took PPI out doesn't mean you can automatically win. Even though its a crappy thing to purchase if you took it out knowing what it was for then you can't claim no matter how poor the deal.

You don't get compensation for making bad decisions.

Also, personal responsibility. Just as the lenders have responsibilities to the borrowers the borrowers also have responsibility as well. It isn't just a one way street which you seem to think it should be.

sourcrates

jmurphy84 wrote: »

Hi

I only recently found out that my wife took a consolidation loan of 19.9% APR. Basically the same price as most credit cards.

She’s not very savvy when it comes to money and I feel that the bank has acted irresponsibly and taken advantage of her. I also don’t believe they asked her to consult free lending advice first if she has debt troubles. She suffers from severe bouts of anxiety and money is one of the causes.

My wife wanted to own it and never passed it by me. I had trusted her that it was a good decision when she told me and I remember this explicitly that she got a “good rate”.

My post is basically does this constitute a poor lending practice and would we have a case if we raised a complaint with the financial ombudsman?

What if they told her and convinced her she was getting a good deal on the phone do we have a case that this was poor lending practice?

Personally I’m disgusted at the lending practice the bank has shown. They’ve taken her for a ride and at the very least it’s morally reprehensible to lend at that level.

The bank is Nationwide - I will never bank with them personally as I feel they are a poor lender.

Is there any point in raising a case here? The problem is she’s basically acted with ignorance due to her anxiety (which she has sought GP and counselling for before)

What constitute poor lending practice in this case?

As long as your wife was told of her cancellation rights at the time of signing, and given the statutory cooling down period, then i`m afraid the bank has done nothing wrong.

You cannot expect them to have any understanding of her mental health condition, unless they were told about it before hand.

Interest rates are decided by the banks own internal credit scoring system, you can either accept, or decline on that basis.

Its not like a payday lender who may not consider credit scoring in their decision making process, in that instance you may of had a case, but not with high street lenders, as they base their decisions mainly on your credit file, as well as other things.

[Deleted User]

Even if they were aware of her situation, I think you would struggle with a complaint, if the loan hasn't put her in a worse situation, than she was with the Credit Cards.

Even if the APR was only a fraction of a % lower (and likewise the payments), she's better off than she was with the Credit Cards.

PeacefulWaters

Its always the lender's fault. Even though they have most to lose.

[Deleted User]

My advice would be, close the Credit Card account (if you haven't already done so), pay off the loan as fast as possible, and UNDER NO CIRCUMSTANCES, refinance the loan!

On the last point, I speak from bitter, personal, experience.

zippygeorgeandben

This is all hearsay as well really from your wife as you weren't actually privy to any conversations she had at the time.

takman

jmurphy84 wrote: »

Hi

I only recently found out that my wife took a consolidation loan of 19.9% APR. Basically the same price as most credit cards.

She’s not very savvy when it comes to money and I feel that the bank has acted irresponsibly and taken advantage of her. I also don’t believe they asked her to consult free lending advice first if she has debt troubles. She suffers from severe bouts of anxiety and money is one of the causes.

My wife wanted to own it and never passed it by me. I had trusted her that it was a good decision when she told me and I remember this explicitly that she got a “good rate”.

My post is basically does this constitute a poor lending practice and would we have a case if we raised a complaint with the financial ombudsman?

What if they told her and convinced her she was getting a good deal on the phone do we have a case that this was poor lending practice?

Personally I’m disgusted at the lending practice the bank has shown. They’ve taken her for a ride and at the very least it’s morally reprehensible to lend at that level.

The bank is Nationwide - I will never bank with them personally as I feel they are a poor lender.

Is there any point in raising a case here? The problem is she’s basically acted with ignorance due to her anxiety (which she has sought GP and counselling for before)

What constitute poor lending practice in this case?

So she's your wife and you know she isn't very savvy with money and money causes her to be anxious yet your not helping her?. Why aren't you working together with your finances so you both know what's going on and can make decisions together.

I never understand married couples who run their finances completely separately or even "hide" some of their finances from each other. I don't think the banks have done anything wrong at all but you possibly have by not working with her on financial matters.

[Deleted User]

Have to agree with all the above we rarely hear about cases of mis-buying on the internet always mis-selling.