Compliant to Bank Over Lack of Affordability Consideration In Loan Agreement Process

in Loans
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Chris958Chris958 Forumite
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I have previously complained to a high-street bank about the lack of an affordability consideration in the loan they offer process I went through in early January 2019.

Immediately after the agreement, I struggled to service the monthly repayments and subsequently I had seek a debt solution programme through a well known charity.  The programme covers: two loans, an overdraft and credit card facilities, approximately £34k in total.

I am retired and was retired at the time all of the above facilities were offered to me. I had an occupational pension which gave me a reasonable monthly income. 

I live in a house that I own. Therefore, I have a certain amount of residual capital, that I could use to resolve my debts. However, once I had done that, I could not afford to live anywhere else in my hometown.

Essentially, my issue is that the bank should have considered how could I afford to service the repayments in the loan offer process. It is noteworthy that each time a facility was offered was as a result of an "invitation" from the bank to discuss the status of my bank account. I am ashamed that the bank duped me 3 times - Caveat Emptor. However, at every occasion I was "invited" to discuss how the bank could best improve my financial status, I believed they had my best interests at heart. I now know, they had only their best interests at heart!

Through this trauma, I have had an epiphany as to the nature of "We the People" have with British business - we are their cash-cows!

I complained to the Bank, and they eventually responded pointing out that they offer loans etc, based on "their current lending criteria" and a "a review of data...with Credit Reference Agencies. Since my point was concerning my "lack of affordability" in servicing the debts - I considered the response as evasive!

I have researched (when I initially complained) and yesterday in composing my response to their evasion, the affordability criteria needed. Initially I found in 2020, evidence from The Office of Fair Trading 2012 Regulations and the Consumer Credit 2010 Regulation. However, yesterday I discovered nothing on affordability.

Can I ask:

a. Is affordability still a criteria for consideration in a loan offer?
b. Where, now does that criteria now reside?

I know that I am 3/4's responsible for my current position. However, the debt recovery repayments are becoming onerous, given the present economic conditions. Although,
the debt charity have very, very helpful, with regard this issue they are as much use as a chocolate teapot! I understand, it is important to maintain a matter of trust with their counterparts in business. However, they are over-cautious - it is like a child swimmer trying to placate a man-eating shark!

Further, I am considering that the bank's treatment of me was "predatory" and they principally saw me as a cash-cow to enhance their profits.

Thank you for listening to me.


  • Ebe_ScroogeEbe_Scrooge Forumite
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    Affordability will be taken into account - each lender will make their own assessment of whether they believe the loan is affordable for you.  They will also take into account any existing debt you have.
    When you made the application, did you supply them with accurate data in relation to your current income and outgoings - including any existing debt-recovery obligations you have?  Remember that they can gather data relating to existing debt from the CRA, but in terms of income and outgoings, it's usually down to you to supply that information.
  • AlbermarleAlbermarle Forumite
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     I believed they had my best interests at heart. I now know, they had only their best interests at heart!

    they principally saw me as a cash-cow to enhance their profits.
     Any private company that seeks to make a profit, will always have their own interests/profits as priority. regardless of any marketing blurb about 'being on your side' etc  It is naïve to think otherwise.

    I think you have to forget about what you think about the bank( any bank ) in general, and just concentrate on the 'was the affordability of the loan checked properly'

  • Clive_WoodyClive_Woody Forumite
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    Chris958 said:
    Essentially, my issue is that the bank should have considered how could I afford to service the repayments in the loan offer process.

    Forgive me for stating the obvious, but this is also something that you should have considered yourself, as you have a much broader insight into your own finances, income, levels of debt, day-to-day expenditure, etc.
    "We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein
  • The_Fat_ControllerThe_Fat_Controller Forumite
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    The bank would only lend you an amount based on the information you have given them and their criteria.

    The bank would then have advised you of the repayments due and you would have had an opportunity to review those and make an informed decision as to the affordability yourself.

    As it included a credit card and overdraft, although my comment may seem harsh, you were obviously living beyond your means.

  • MEM62MEM62 Forumite
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    The bank will have their own criterion for lending.  Based on the information that you provided at the time you met with that criterion.  Your complaint may not yield anything. 

    That said, this is not a priority debt and you should only pay what you can afford.  As for the debt charity being "like a child swimmer trying to placate a man-eating shark!", you assessment here is incorrect.  They have the same amount of clout as you and the bank cannot force you - either through them or directly - to make payments that are unaffordable.  You need to do an SoA work out what payments are affordable and that is what you pay.

    Hopefully you have addressed the over-spending issues that led to the debt in the first place.      
  • CatsacorCatsacor Forumite
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    @Chris958 you are in control of you, only you choose the actions you take and passing the blame to another body isn't really facing reality - and the reality was you chose to do something that was probably a financial risk.

    I know words are difficult to hear sometimes but we have to hear them in the hope that one word or sentence will hit a nerve that makes us act  - most members on these finances subforums have been, done, had, lived, the very same experiences as you and you're hearing things that have steered us/them in the right, albeit horrible, direction.
    First, take responsibility .....
  • BrieBrie Forumite
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    Are you claiming that prior to getting the two loans, overdraft and credit card facilities you had absolutely no credit?

    And were these taken out one at a time or all at once?

    So having a couple of loans you then used all your overdraft and maxed out the card(s).  I want to be sympathetic as I do know that banks can seem predatory but there must have been a point when you could see where this was leading and try to put the brakes on sooner.

    The bank may have been compliant in getting you into debt but only if their processes couldn't take into account the credit facilities all being applied for at the same time or otherwise ignoring what credit you already had available even if it wasn't being used.
    "Never retract, never explain, never apologise; get things done and let them howl.”

    2023 £1 a day  £54.26/365
  • Seasalt18Seasalt18 Forumite
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    We recently got a payment, out of the blue, from a non high street lender due to lack of proper affordability checks. They would not have lent to us had they been carried out properly . 
    We had repaid the loan in full. The irony is that if they had done proper affordability checks and refused us we would have gone under  as we needed it to keep the car on the road for work and get us out of a redundancy hole. Although we got out of that hole and stepped straight into a Covid financial black hole 
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