Affordability complaint update

Floss

kezzygirl said:

Where does personal responsibility lie with unaffordability? I get that companies check credit history when offering credit, but surely when borrowing you would check you can afford it?

Some people are in such a situation that this is their only route out. It's a bit like booking a holiday when you know you don't have the money to pay for it yet.

Rob5342

kezzygirl said:

Where does personal responsibility lie with unaffordability? I get that companies check credit history when offering credit, but surely when borrowing you would check you can afford it?

People get into debt for lots of reasons and sometimes it can seem like the only way out. People can convince themselves that it's just a one off that they'll sort out next month, but it can easily spiral and carry on getting worse. Once you are spiralling it can become entrenched in your thoughts and more borrowing seems like the answer rather than anything else. You do have some personal responsibility of course, but the companies involved also have a responsibility to ensure that they are not making a bad situation worse. If you look at some of the ombudsman decisions on the FOS website they often say that the lender should have done more to check affordability and that they shouldn't have lent.

It can be easy to get into debt, changes in circcumstances can knock people that are managing perfectly well into relying borrowing. I have a friend who had £10k of credit card debt and I thought they were an absolutle idiot and couldn't understand how they'd managed it as I had about £15k in savings. Wind forward 15 years, I'd bought a house, had a baby, and had £42k on credit cards.

Rob5342

agentblackcat said:

Hi 

So I had 3 loans, later 2 were top ups. I think but unsure a possible refund of around £2k. Loans are closed as I stupidly took out further lending to get them paid off. Anyway I believe at time of these loans they were unaffordable due to having my debt repayments and essential bills being more than my take home pay, this is not including food and fuel. This led me to rely on lending and credit. I have attached below the loan details. Might be wrong about potential interest amount. 🤔 

I'm not sure what your chances are to be honest. In my experience the FOS are more likely to say that lending is unaffordable when you have been with a lender for a while and there has been repeated lending (new loans or credit limit increases). Their decision will depend on lots of things but for me it's only been when I had 5 or 6 loans that they decided they shouldn't have lent. You could have a look at the ombudsman decisions and see what they have decided for other complaints. Note that they only publish the final ombudsman decisons, if people accept the initial investigator decision then they aren't published?

https://www.financial-ombudsman.org.uk/decisions-case-studies/ombudsman-decisions/search?BusinessName=Bamboo+Limited&Business=781&IsUpheld[1]=1&IsUpheld[0]=0

kezzygirl

Rob5342 said:

kezzygirl said:

Where does personal responsibility lie with unaffordability? I get that companies check credit history when offering credit, but surely when borrowing you would check you can afford it?

People get into debt for lots of reasons and sometimes it can seem like the only way out. People can convince themselves that it's just a one off that they'll sort out next month, but it can easily spiral and carry on getting worse. Once you are spiralling it can become entrenched in your thoughts and more borrowing seems like the answer rather than anything else. You do have some personal responsibility of course, but the companies involved also have a responsibility to ensure that they are not making a bad situation worse. If you look at some of the ombudsman decisions on the FOS website they often say that the lender should have done more to check affordability and that they shouldn't have lent.

It can be easy to get into debt, changes in circcumstances can knock people that are managing perfectly well into relying borrowing. I have a friend who had £10k of credit card debt and I thought they were an absolutle idiot and couldn't understand how they'd managed it as I had about £15k in savings. Wind forward 15 years, I'd bought a house, had a baby, and had £42k on credit cards.

Oh absolutely I agree it's easy to get in to debt
 But lenders are only privy to credit already borrowed, not food/utility/everyday bills. They don't accurately know our income and rely heavily on what we say. The op has said he got another loan to consolidate others, but I thought affordability complaints were if you have a history of missing payments and clearly struggling yet the company still increase the credit limit or offer more credit?

kezzygirl

Floss said:

kezzygirl said:

Where does personal responsibility lie with unaffordability? I get that companies check credit history when offering credit, but surely when borrowing you would check you can afford it?

Some people are in such a situation that this is their only route out. It's a bit like booking a holiday when you know you don't have the money to pay for it yet.

Not sure if that's a dig, but whatever. I think people would still check they can afford the repayments but I'm sure there are some that don't and just keep borrowing and borrowing without thought of the budget. 

agentblackcat

Thanks for everyone's comments. I didn't come to post here to be criticised in anyway. With unaffordable lending I'm not saying or claiming I was not in the wrong at any point but unfortunately my circumstances at the time led me to make bad decisions. Some lenders have not carried out accurate checks and that is my complaint. 

Anyway I'm not here to debate just looking for advice. I'll look on the debt camel and ombudsman site. Thanks for sign posting Rob5342

sourcrates

kezzygirl said:

Floss said:

kezzygirl said:

Where does personal responsibility lie with unaffordability? I get that companies check credit history when offering credit, but surely when borrowing you would check you can afford it?

Some people are in such a situation that this is their only route out. It's a bit like booking a holiday when you know you don't have the money to pay for it yet.

Not sure if that's a dig, but whatever. I think people would still check they can afford the repayments but I'm sure there are some that don't and just keep borrowing and borrowing without thought of the budget. 

It was the onset of payday loans, and their easy availability, that really started this particular debt spiral.

Of course debt has been around like forever, but a lot of fraudsters, and companies that were out to make quick and easy money, saw an opportunity with payday loans, and they took it.

They would lend to anyone, without much in the way of affordability checks, or any other checks for that matter, and charge massive amounts of interest, plus extortionate charges if repayment wasn`t made on time.

And it stands to reason if you are short one month, you will likely be the same the following month, and so on, so where does the loan repayment come from? yup further borrowing.

Offering money to someone who is skint, is like offering booze to an alcoholic, they will take it, despite their better judgement, as a lot of people were scared of the repercussions of non payment, this led to them paying off one loan with another, and so on, leading to a debt spiral that was hard to get out of.

The less than honest lenders would set up a direct debt without your knowledge, and take money from your account, the interest was charged daily at some 1000+%, and many customers had their bank accounts laid waste, the companies would then do a midnight flit, and turn up again, under another name, and hey presto, back in business again.

It was a torrid time for some people, of course not every lender was a fraudster, but they all charged massive amounts of interest and stupid charges if you were late paying, some were £50 per missed payment, and they might attempt to take payment up to 5/6 times a day, so you can imagine how much in debt some people were.

FCA reacted slowly to this, but eventually the worst lenders were put out of business, and affordability complaints saw to most of the rest of them.

The loans offered now are still high interest, but payable over a longer period, and charges/interest are both capped, to avoid things getting out of hand, but it still happens.

Rob5342

kezzygirl said:

Rob5342 said:

kezzygirl said:

Where does personal responsibility lie with unaffordability? I get that companies check credit history when offering credit, but surely when borrowing you would check you can afford it?

People get into debt for lots of reasons and sometimes it can seem like the only way out. People can convince themselves that it's just a one off that they'll sort out next month, but it can easily spiral and carry on getting worse. Once you are spiralling it can become entrenched in your thoughts and more borrowing seems like the answer rather than anything else. You do have some personal responsibility of course, but the companies involved also have a responsibility to ensure that they are not making a bad situation worse. If you look at some of the ombudsman decisions on the FOS website they often say that the lender should have done more to check affordability and that they shouldn't have lent.

It can be easy to get into debt, changes in circcumstances can knock people that are managing perfectly well into relying borrowing. I have a friend who had £10k of credit card debt and I thought they were an absolutle idiot and couldn't understand how they'd managed it as I had about £15k in savings. Wind forward 15 years, I'd bought a house, had a baby, and had £42k on credit cards.

Oh absolutely I agree it's easy to get in to debt
 But lenders are only privy to credit already borrowed, not food/utility/everyday bills. They don't accurately know our income and rely heavily on what we say. The op has said he got another loan to consolidate others, but I thought affordability complaints were if you have a history of missing payments and clearly struggling yet the company still increase the credit limit or offer more credit?

That was the kind of thinking that the FOS took with my complaints. They didn't judge them too harshly to begin with as they were relying on whst i said and I had kept up with other loans, but when I had been repeatedly borrowing from them the FOS said they should have become aware I was struggling and shouldn't hsve lent more.

I had something like 24 loans from Lending Stream, at times with 6 running concurrently. That is quite scary to think about looking back. I made a complaint which Lending Stream rejected and escalated to the FOS who decided that all interest from loan 6 onwards should be refunded. 

agentblackcat

Hi. 

@Rob5342... What happened with your nationwide affordability complaint. Mine is sitting with the investigator from the ombudsman. He has written to nationwide with his initial findings and agrees with me. They had 2 weeks to respond which they have done. Apparently they have sent a lengthy email full of points the investigator is going to have to look through. He said he hopes to resolve it or it will be escalated further. Just wondered what happened with yours...I'm sure you said it took some time to resolve. ? 

EssexHebridean

kezzygirl said:

Floss said:

kezzygirl said:

Where does personal responsibility lie with unaffordability? I get that companies check credit history when offering credit, but surely when borrowing you would check you can afford it?

Some people are in such a situation that this is their only route out. It's a bit like booking a holiday when you know you don't have the money to pay for it yet.

Not sure if that's a dig, but whatever. I think people would still check they can afford the repayments but I'm sure there are some that don't and just keep borrowing and borrowing without thought of the budget. 

In a lot of cases it’s not a lack of thought, it’s that there IS no budget, or that they have started finding payments on previous debts a struggle and are convinced that they need to do “something” but aren’t sure what. From a position of financial privilege (and that’s not a bad thing, it can just mean that you have the knowledge to budget and the ability to make your income meet your budget) it’s easy to say “but surely people would…” or to be judgemental (intentionally or not) about someone borrowing on top of borrowing - but until you have been in that position yourself it’s impossible to really understand the pressure and stress that this creates. That in itself can drive rational thinking out of the window. 

Remember also often lenders themselves can be guilty of driving increased debt - think who the main driver of consolidation loans are, and it’s well known that consolidation almost never works as it is suggested it will!