Bounce Bank Loans - can banks deduct arrears

jadex

TaraCPe said:

I have not found any information that says lenders can use government money provided for BBL's to offset arrears. 

I understand your feelings (been through similar myself) but it is NOT government money. It is theirs (i.e. Bank's) money which they lend to you as BBL.

Thrugelmir

jadex said:

TaraCPe said:

I have not found any information that says lenders can use government money provided for BBL's to offset arrears. 

I understand your feelings (been through similar myself) but it is NOT government money. It is theirs (i.e. Bank's) money which they lend to you as BBL.

Taxpayers are underwriting the loans. 

jadex

Thrugelmir said:

jadex said:

TaraCPe said:

I have not found any information that says lenders can use government money provided for BBL's to offset arrears. 

I understand your feelings (been through similar myself) but it is NOT government money. It is theirs (i.e. Bank's) money which they lend to you as BBL.

Taxpayers are underwriting the loans. 

doesn't matter - nobody defaulted yet;
the fact is money is provided by banks, government pays 1st year of interest in the form of state aid

the point is as money comes from bank then bank can offset debt against it (therefore it's best to avoid to apply for BBL from the institution you owe something)

mobilejo

TaraCPe said:

Thank you for your comments. The lender has now admitted that the BBL loan application and contract T&C's did not mention that funds would be taken to offset any current loan with them. The aim of a BBL is to provide financial support to businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.
I have not found any information that says lenders can use government money provided for BBL's to offset arrears. Given the nature of these scheme then it is highly unlikely standard lender terms and conditions would apply.
Whilst there are arrears and it may seem like a good idea to pay these off from the BBL, that should have been a decision I made and not the lender. I now know why they were so keen to offer a BBL to me!
The issue now is what protection I have as a customer if I was not provided with all the information at the outset to make an informed choice and / or when given the contract. Under the CCA it could be the case that the lender would not be able to collect repayments on the loan for such a breach.
Does anyone know what protection under the CCA still applies to this scheme? 

The right to set off will be in your account T&C's, it doesn't need to be in the loan T&C's.

It simply means that once money is in your account, the bank can use it to offset what you owe them. It is totally irrelevant where that money came from. The BBL is not 'ring fenced' when it hits your account - once it is in there it is subject to the same set off right as any other funds landing in your account.