Dealing with a heavy-handed bank

[glentruim]

Hi

 

I'm starting this thread on behalf of my daughter who lives in London. She has a loan for £15K with Nat West resulting from trying to do the right thing following collapse of a restaurant business. The loan is unsecured.

 

6/7 months ago she wrote to the bank following CAB help to say that her situation had changed and that she could no longer afford @£320 per month repayment but could afford £120 pm. This worked until a month ago when the bank phoned to say that following the 6 month review her new monthly amount would be £320.

 

Having canvassed family support to pay the £320, she went back to the bank 7 days later to say that she could now manage the payment. The bank said "Too late - it's now in the hands of Debt Recovery". They suggested to wait until receipt of formal letter & then arrangements could be made to pay the monthly amount.

 

Yesterday, the formal letter came to say pay full £15K within 7 days or we go to court.

 

Obviously this situation has affected my daughters well-being & as a teacher with responsibility for all special needs as well as trying to bring up a 5 year old daughter single-handed, discretionary time is almost non-existent hence my involvement.

 

Can you help please?

 

Thank you in advance!

[Robertxc]

Hi glentruim, welcome to the forum.

[rory32]

Hi and welcome to CAG.

She has a loan for £15K with Nat West resulting from trying to do the right thing following collapse of a restaurant business.

Is this a personal loan?

 

When was the loan taken out roughly?

 

Are there any charges on the account e.g. late payment fees? (I would be suprised if there aren't as it is now with a DCA)

Having canvassed family support to pay the £320,

While it's understandable doing this really any payments should be based on her ability to pay. That's all a court would consider - not can she borrow from her family. Does she have any other creditors?

 

Yesterday, the formal letter came to say pay full £15K within 7 days or we go to court.

 

This is a standard template letter designed to frighten her into phoning up in a panic and committing to paying more than she can afford. What she needs to do is sit down and do a statement of affairs listing her income (no one elses) and her essential outgoings/priority debts (this loan is a non priority debt) and then see what disposable income she has left over and make an offer to pay in installments based on that. She should enclose first payment with her proposal.

 

Remember if they went to court a court would grant a time order allowing her to pay in installments based on exactly this information. A creditor/DCA would not get more money out of her by going to court and if she has made realistic proposals in line with her ability to pay to pay off the account all they would do is annoy the judge by going to court.

[rory32]

I forgot to ask, who are the debt collection agency?

[glentruim]

Hi Rory32

 

Thanks for your response. As soon as I can contact my daughter, I'll get back with the extra details.

 

Glentruim

[glentruim]

Hi Rory32

 

In answer to your questions:

 

It was a personal unsecured loan taken out in 1999. There are no charges on the account since up to 7 months ago when my daughter submitted a change of financial circumstances request, payments had been met in full & on-time. 6 months ago she submitted this budget statement to the bank & agreed a payment of £120pm & 1 month ago following a 6 month review, the bank stated that the payments would become £320pm.

 

The debt collection agency are Irwin Mitchell in Manchester.

 

Incidentally, within an hour of receiving the letter from IM, my daughter phoned them to say she could now pay the required monthly sum with family support. IM said that paying in instalments was no longer an option!!

 

Kind regards

 

Glentruim

[rory32]

Well as they are being more than a little difficult I would request a copy of the credit agreement. As it's from 1999 they may no longer have it.

 

Without a complying copy of the credit agreement they can not enforce the debt even in a court of law. This request should be sent to IM (as agents of the creditor they have an obligation to pass on your request under s175 of the Consumer Credit Act - it also keeps them in the loop regarding the account). Normally when you send this the account is immediately put on hold for 28 days.

 

I think also your daughter needs to insist that all communication is now in writing only. Template here

 

Also it's best to send everything recorded delivery as DCA's have a habit of denying they've received letters and don't sign any letters, she should just print her name.

[glentruim]

Hi Rory32

 

Thank you for your help in trying to resolve the situation. It looks like we have an acceptable solution now.

 

Following advice from a personal friend who is a senior manager within RBS, my daughter went in to see the manager in a local Nat West bank.

(Its one of the problems when you have telephone banking that it is really difficult to talk to anyone who has enough "clout" to make changes to the situations that arise)

 

When they checked the detail on the account, they found that they had inputted the data incorrectly & hence the draconian system swung into action when the reality was that it was a bank error that had triggered it!!! They apologised profusely & have agreed to start the £320pm payments from beginning of June.

 

On the one hand I'm relieved & hope that my daughter sleeps well tonight for the first time in a good few days, but I am also angry that the bank does not have a system that allows customers to contact someone in the bank who can independently check that either the bank or the customer has made an inadvertant error!!! The banks really must find a way of differentiating genuine mistakes from intention to avoid payment!

 

My daughter is still pursuing getting a copy of the CCA but I guess I'm unsure if there is anything else that we could/should do?

 

Thanks once again for your timely and helpful advice

 

Glentruim