Lending money to friends & family

in Loans
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pennymakespoundspennymakespounds Forumite
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not sure if this is right board..

member of our family "lent" couple of £thousand to a "friend" to fund something....
which didn't happen .. and guy has made himself completely uncontactable . Apparantely he's done similar with couple of other people

Whilst probably classed as my own stupid fault for just handing over cash .. last thing we expected was this .. from a supposedly "best friend" .
What legal actions can i take .. or "legal threats" can i make to try and get him to realise i'm seriously wanting my money back.


  • XbigmanXbigman Forumite
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    Have you got anything in writing or even a receipt, or maybe witnesses. If not you are unlikely to get your money back if he doesn't want to pay.

    Xbigman's guide to a happy life.

    Eat properly
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  • pennymakespoundspennymakespounds Forumite
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    no...and no...
  • BossybootsBossyboots Forumite
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    How was the money paid?

    If cash - it is your word against his and unless he deposited in a bank account is untraceable so you can't prove the existence of the loan.

    If by cheque or electronic banking - then the transaction will be traceable and a Court would have to decide whether on the balance of probabilities this money was a loan and not a gift or payment for something.

    Not having it in writing does not mean you don't have a agreement, just that you can't actually prove it.
  • zzzLazyDaisyzzzLazyDaisy Forumite
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    If the loan was for less than £5000, you can make a claim in the small claims court. You lodge the claim on-line, and if he fails to file a defence, you apply for judgement. If he does file a defence (eg saying this was a gift and never intended to be repaid, or denying the money was given to him), then you would have to go to court and argue your case. It is all fairly straight forward, and you don't have to have a solicitor.

    BUT, firstly you have to know his address, so the papers can be served on him. And, secondly, even if you get judgement against him, the chances of actually getting the money if he chooses to disappear, are very poor indeed.

    County court bailiffs have few powers. If he refuses to let them in, they will go away. If he says everything is on HP/rented/belongs to his girlriend, etc, they will accept that. You can get an attachment of earnings order, if you know where he works, but that is another step and if he leaves his job or is not working, that is useless. Similarly, if you know his bank account details, you can ask the court to order the bank to pay the money to you. But if there is no money in the account, that doesn't help, and of course once he knows about this, he will probably stop paying money in.

    All these steps cost money and while that cost will be added to the debt, that doesn't help you if he isn't paying up anyway.

    The county court system works, PROVIDED that a person doesn't was a CCJ on their record. If they don't care, or already have CCJs, then you are stuffed, because the enforcement procedures are really not effective against someone like that.

    You know the guy. If he is likely to be concerned about being taken to court, the threat may be enough. If he couldn't care less, you are wasting your time and throwing good money after bad.

    Good luck and let us know how you get on.
    I'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.
  • amateur_saveramateur_saver Forumite
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    if there aren't witnesses or any 'accounts' which he paid in to then it would be difficult.
    On the other hand, if there are, you could always consider a criminal complaint of theft. You don't owe him any favours so this could be a possibility but ONLY if there was a witness or you can show it in his bank transaction and yours.

    Difficult. Hope you get on ok...

    A_S x
    ** Getting back in the swing of saving again.... **

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    Trying to find the best deals to save as much as we can..........
  • BossybootsBossyboots Forumite
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    There is no theft here. Failing to repay a loan is a civil matter, not a crime. The only way it would be a crime is if the funds were obtained by means of a fraudulent transaction or duress. If he was given the money and has simply refused to repay it, this would not be a crime even if there was a loan agreement.

    There is however possibly the question of deception. If the money was given for a particular purpose and was not used for that, it may fall into the category of being obtained by deception. This would be strengthened if the project did not actually exist in the first place rather than simply falling through. If the other people he has done it to also report it to the police they may consider this enough evidence to pursue the matter. It is worth reporting therefore as the others may have already done so or might in the future. In the absence of anyone being able to corroborate the situation or having suffered the same, there is unlikely to be enough evidence for a prosecution.
  • pennymakespoundspennymakespounds Forumite
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    thanks guys... some useful replies todays ..
    i transferred the money by internet banking into his bank account ...
    we don't have anything in writing ... it was all done as a "family/friends" thing.

    apparantely he's moved out of his rented house .. but no-one knows where to... i have written a polite " please send me my money" to his rented house .. i believe he is picking his mail up.. but as with phone calls/texts he's clearly not wanting to respond .

    i guess i'm now thinking that the best option is to get something official .. "legal" ...sent to him in the hope that it'll show him i'm serious.
  • HeMan_3HeMan_3 Forumite
    93 Posts
    I hope this is the right post for this;

    My brother gave his friend £62,000 to buy some shares in December. It later transpired that his friend had a gambling problem and guess what??

    Yes you guessed it, he actually used the money to bet with, and apparently he never had any intention of buying shares.

    My brother has now threatened him with legal action so the friends father has got involved and offered my brother £35,000 to settle the matter or his son will fill for bankruptcy (he has no valuable assets).

    The thing is, the friend is a stock broker in the City and does not really want this.

    If my brother sues him, is there any way to recover his money?

    Any advice welcome,

  • icecoolbabeicecoolbabe Forumite
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    Can you clarify 'gave his friend £62k to buy some some shares'?

    Do you mean the friend was acting in a formal capacity for your brother - or the £62 was a gift conditinoal on buying shares or was a loan or something else?

    Does the friend work independently or as part of a firm? The Financial Ombudsman may have an interest in this. (Also the Serious Fraud Office if he has committed certain offences).

    The father of the friend should be told to stay out of the matter - it's nothing to do with him (unless he is acting in a legal capacity for the friend) - and your brother has no obligation to deal with him.

    There is a lot of money involved here - he may also need to consider if he has been defrauded into parting with it in the first place - in which case he should consider involving the police as well.

    What paperwork has he got? Maybe a Terms of Business statement and receipts?

    Sorry - more questions than answers I'm afraid - but yes, suing him for the money is one option - but wait and take proper legal advice first.

    It sounds to me as though 'if' he had a gambling problem and got your brother to part with £62k, then he 'may' have done it with the sole intention of raising money to fund his habit. This may also have affected other clients who may also be out of pocket.

    Don't be put off by spurious threats of bankrupcy from the father - it sounds like a lot of money is at stake here and your brother needs to take proper legal advice regarding recovering it.
    If it sounds too good to be true, it probably is.
  • HeMan_3HeMan_3 Forumite
    93 Posts
    First of all thank you very much for taking the time to reply in such detail.

    The money was nor given in a formal capacity, he was buying them as a friend as my brother did not really know what he was doing.

    The friend works for a company in the city.

    As for paperwork, my brother has got a complete paper trail along with a signed declaration that he owes my brother the money which was countersigned by an independent solicitor and my brother so as to prove that he was not forced.

    What type of law do you think this is so that we may approach the right solicitors?
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