Unscrupulous Banking Practices!

Angelina51

Example - Bank customer whose current account is in the negative the majority of the time, very poor credit rating over many years and barely able to support themselves and children.  Arrears on utilities, rent and council tax with income far less than basic required outgoings; and yet the bank gives them a credit card - not with the usual few hundred as the starting limit but thousands.  The card is used to its limit and repayments are not being met but rather than stop the card the bank offer an increase in the credit limit.  Again the new credit limit is reached - no payments being made and no chance of payment - ever.
As noted by Martin Wolf, the Financial Times’s, ‘Excess borrowing by fools would have been impossible without excess lending by fools: creditors and debtors are joined at the hip.’  
How is it legal in the UK to 'give money' to someone who is perpetually broke and then expect them to pay back?
Is there anything in banking law that says this is not allowed?  Comments would be appreciated.

Willing2Learn

https://www.financial-ombudsman.org.uk/businesses/complaints-deal/consumer-credit/unaffordable-lending

sourcrates

Ask some people that question on these forums, and they will tell you banks are the pillars of our community, who can do no wrong, and the very thought of a mis-sold loan, or credit card, would be entirely the debtors fault for borrowing irresponsibly, as they are grown adults and should all be making sound financial decisions.
However my experience tells me otherwise, some banks are more liberal with their lending policies, than others, remember, a bank is not there to help you, to hold your hand, or to be your friend, a bank exists solely to make profit for its shareholders .

Cases such as the one you cite, are far from uncommon, but alas the only recourse people have is via the ombudsman, and it can be quite difficult to prove hardship sometimes.
I agree with the line you quote from Martin Wolf : Excess borrowing by fools would have been impossible without excess lending by fools.
Hits the nail right on the head.

born_again

Would be interesting to see a actual case where someone is always in O/D and has arrears getting a CC with a limit in thousands.

2e0arr

is this a true story ? if so which bank please ?
or 
 is it a for instance discussion point

jonesMUFCforever

I don't believe it as written - but it would make a good exam question on financial services.

SnowTiger

Angelina51 said:

Example - Bank customer whose current account is in the negative the majority of the time, very poor credit rating over many years and barely able to support themselves and children.  Arrears on utilities, rent and council tax with income far less than basic required outgoings; and yet the bank gives them a credit card - not with the usual few hundred as the starting limit but thousands.

Status of utility and rent accounts may not appear on credit files.

Only my 'water' account appears on my credit report.  CRAs are quite keen to get their paws on rent data, but few landlords share it with them.  Council tax arrears don't appear on credit reports.

Is this linked to your other message, here?  A sole trader may pump a lot of money through their (personal) bank account, giving a false impression their income is larger than it really is.

Most credit card applications ask about income and outgoings.  Did the applicant answer those questions honestly?

NoodleDoodleMan

There should be stricter controls who gets a credit card, based on their circumstances, which seems to be the core issue in the OP's post.

When No1 son and heir reached 18 there was a near deluge of credit card offers dropping through the letterbox every other day.

barbedhook

I remember about 15 years ago my niece who was a single parent with 3 kids living on benefits was offered £5000 loan by Barclays Bank which she took up spent it all and never paid anything back her mother took her to the bank and asked why someone on benefits with no spare income was offered this loan and nobody could give her an answer eventually the loan was written off. I’m not saying what she did was right but sometimes it makes you think are some of these banks living in the real world

born_again

barbedhook said:

I remember about 15 years ago my niece who was a single parent with 3 kids living on benefits was offered £5000 loan 

A lot has changed in 15 years.
Unless the OP cab provide some recent evidence of a case, then we are just wasting our time.

[Deleted User]

sourcrates said:

Ask some people that question on these forums, and they will tell you banks are the pillars of our community, who can do no wrong, and the very thought of a mis-sold loan, or credit card, would be entirely the debtors fault for borrowing irresponsibly, as they are grown adults and should all be making sound financial decisions.
However my experience tells me otherwise, some banks are more liberal with their lending policies, than others, remember, a bank is not there to help you, to hold your hand, or to be your friend, a bank exists solely to make profit for its shareholders .

Cases such as the one you cite, are far from uncommon, but alas the only recourse people have is via the ombudsman, and it can be quite difficult to prove hardship sometimes.
I agree with the line you quote from Martin Wolf : Excess borrowing by fools would have been impossible without excess lending by fools.
Hits the nail right on the head.

Ask some other people that question on these forums, and they will tell you banks are the work of the devil, who can do no right, and the very thought of a mis-borrowed loan, or credit card, would be entirely the banks fault for lending irresponsibly, as they are an evil business and shouldn't be able to exploit the lazy and feckless.
However my experience tells me otherwise, some customers are more sensible with their borrowing plans than others and take adult decisions, not blaming others for how they decide to run their lives.