Business overdraft personal guarantee

SRKR

Hoping for some advice. My husbands small business sadly went into liquidation a while ago, Barclays are chasing us through Westcott for repayment of a £10k overdraft on the basis there's a personal guarantee.
Neither my husband or I ever recall consenting to a personal guarantee. We asked for proof, all they've supplied is blank documents (agreement with no signatures) and a covering letter that says the OD was applied for and approved online so there's no signed agreement they can share.
Surely they should provide some evidence? My question is, what do they need to provide to make this an enforceable agreement? 
TIA

retiredbanker1

Indeed a guarantee cannot be valid unless signed - I do not know whether you can digitally sign online.
Take legal advice.

molerat

There is no need for an actual signature according to case law, https://parissmith.co.uk/tag/golden-ocean-group-ltd-v-sagacor-mining-industries-pvt-ltd/, but there must be some sort of trail to prove the case.

DullGreyGuy

retiredbanker1 said:

Indeed a guarantee cannot be valid unless signed - I do not know whether you can digitally sign online.
Take legal advice.

on what basis? 

You do not need a physical signature, a digital agreement is perfectly sufficient given most loans etc are all done online these days. 

You would need to see the full agreement and what you are agreeing to. I personally dont see why one "signature" couldn't cover both you as a director agreeing to the loan as an officer of the company and also cover you as an individual agreeing to be party to the loan as a personal guarantee.

SRKR said:

Neither my husband or I ever recall consenting to a personal guarantee. We asked for proof, all they've supplied is blank documents (agreement with no signatures) and a covering letter that says the OD was applied for and approved online so there's no signed agreement they can share.
Surely they should provide some evidence? My question is, what do they need to provide to make this an enforceable agreement? 

Unfortunately this website is full of cases of people "not remembering" and "would never" but it frequently, though not always, ends up being proved that they actually did. 

What do you mean "blank documents"? It's literally a piece of blank paper with nothing written on it at all? Or do you mean it's the terms of the overdraft which states you are a guarantor but it just isnt signed and/or has other uncompleted fields?

Their system should have, and almost certainly did, tracked what was done online etc. This clearly isnt a CCA case as it was a company but it's similar that they recreate the signed credit agreement through the terms in place at the time and confirmation it was agreed to online etc.

What was the size of the business at the time? Would it be entitled to go to the Financial Ombudsman?

HobgoblinBT

A limited company can complain to the Financial Ombudsman and if appropriate can offer compensation.  However, as the company has been dissolved I don’t believe its former directors have powers to act for the company and any compensation for a dissolved company usually goes to the Crown. I suspect that the first call on any recovered assets/compensation would go to the former company’s creditors. If complaining as the Guarantor and the Guarantee is proved valid, the Bank might successfully argue to set off any compensation against the debt. 

Bank guarantees that I have seen cover up to a fixed amount of debt PLUS  interest and related (enforcement) costs.  I suggest that you read the guarantee document to help understand your rights/responsibilities.There will be a clause covering the liability limit plus possible additional fees that can be added, eg enforcement and court costs.

You should also read the facility letter that is likely to refer to any security taken to support the overdraft. It might be specific eg £10,000 guarantee given by Mr SKKR or it might just refer to any security held.

If you wish forum members to assist you why not post a copy of the guarantee and facility after redacting any personal information. There are several current and former bankers with experience of such matters who regularly visit this forum.

This information might not be what you want to hear but hopefully it will assist you to understand the situation and help you decide how to proceed.

Hoenir

Given the high risk of business lending defaulting. Very little is advanced without some form of guarantee or a fixed or floating charge over the assets of the business. 

SRKR

@DullGreyGuy - thank you for your reply.

When I referenced 'blank' documents, what Barclays have sent as 'evidence of the agreement' is a copy of a postal letter with Overdraft Terms and Conditions. The last page has a box to be ticked to accept T&Cs (which is blank) and a space to sign (which is blank). It in no way provides me evidence of what Barclays say was agreed to.

If we have agreed to a personal guarantee for an overdraft then we are clearly required to repay. As you say their system should have, and almost certainly did, tracked what was done online etc. I think I'm within my rights to see that evidence.

thanks

HobgoblinBT

A Google search of your question brought up a Financial Ombudsman decision not upheld under reference DRN-4012073.  

Grumpy_chap

SRKR said:

Hoping for some advice. My husbands small business sadly went into liquidation a while ago, Barclays are chasing us through Westcott for repayment of a £10k overdraft on the basis there's a personal guarantee.
Neither my husband or I ever recall consenting to a personal guarantee. We asked for proof, all they've supplied is blank documents (agreement with no signatures) and a covering letter that says the OD was applied for and approved online so there's no signed agreement they can share.
Surely they should provide some evidence? My question is, what do they need to provide to make this an enforceable agreement? 
TIA

The likelihood of a bank lending money to a one / two-person Ltd Co without a personal guarantee is below the likelihood of Santa passing by on the sleigh towed by mermaids riding on the backs of unicorns.