Can the bank do this, and is a F+F an option?

mike-b_3

My GF has a graduate loan from one of the main banks (the same one as her current account is with). She has no money in her current account, it's at it's overdraft limit (mainly due to charges), and no income. For the last couple of months her loan payment (standing order) has bounced due to lack of funds. The bank have been phoning up to 5 times a day 7 days a week to demand payment - we have explained her financial situation and inability to pay but they still keep phoning.

Anyway, last months payment was taken regardless of her OD limit, doubling the size of her OD, plus they charged another £30 on top. Can they just take the money in this way, causing the OD to spiral out of control?? We're going to cancel the standing order (assuming they will let us), to prevent it from happening again next month.

A relative has offered to lend a sum of money to help her out, so we would like to make an offer for full and final settlement. The loan repayments were up to date until about Feb this year - then 4 months were missed. The bank agreed to let these missed payments pass (extending the term of the loan), as long as no future payments were missed - which now the latest 1 or 2 have. We've had letters saying that payment has been missed, pay now etc etc, are these default notices, or are they a more formal thing?

Is the bank likely to take a full and final settlement, or does that only ever happen once the debt has been sold to a separate collection agency? We're trying to reclaim bank charges, which if successful will clear a good chunk of the loan, but obviously there could be a long wait until we get anything back.

Incidentally, does anyone else think there is an argument for mis selling with graduate loans - they offer you a big free overdraft when you're a student, then give you a hard sell on a 'graduate loan' to pay off the overdraft afterwards, even though you are still eligible for the free overdraft for 2 years after graduating?? :rolleyes: