URGENT - Invoice Discounting -

[jewelleryman]

Hi Everyone

 

Im having sleepless nights. I signed an agreement with Lloyds TSB Commercial Finance last year in September. This agreement would allow me to supply jewellery to UK based jewellers on credit and Lloyds would give me 90% of the invoice value.

 

I supplied jewellery to the jewellers and got £220,00 immediate funding from Lloyds. I gave my customers 90 days credit. So Lloyds would get their money in 90 days and charge me for offering this facility by interest charges & a service fee.

 

Just after 2 months, without any notice whatsoever, Lloyds froze my facility and demanded I paid them back straight away. Two customers cheques had bounced which were honoured later on. But Lloyds panicked on this and froze my facility. I paid them and now the balance is around £90,000 including their excessisive service fees. On a daily basis I was speaking to different people everytime. They had very poor internal communications.

 

They told me I had asked for my facility to be terminated, which I did not! Anyway, when I was right in the middle of my transactions and made my sales and relied on Lloyds to fund me what they agreed they would, they froze my facility. This left me in an awkward position. I was stuck because of them. I wish I never took the facility. Its like they cut my hands off.

 

If this wasn't bad enough, they instructed my main bankers for my business, "Barclays Bank" to freeze my account. Barclays Bank, without asking me or giving me any notice froze my account. My suppliers cheques were returned unpaid even though I had funds in the account to pay. My mortgage payments have been returned as my business account put wages in my personal account.

 

These suppliers no longer want to deal with me as they think Im a bad customer whos cheques bounce. This has made me lose my reputation and goodwill also the daily stress and unpaid bank charges from everywhere.

 

Im at the end and even thought of commiting suicide. Im so stressed and angry at the whole thing and the way I have been treated by Lloyds. My excellent credit report is being damaged due to the unpaid mortgages.

 

The only reason these cheques bounced were because when I supplied the jewellery last september, just a month later, the gold prices rose to the highest in its history. This was not expected. My customers therefore couldnt pay me within the time frame they agreed.

 

Other customers simply couldny pay me so I took the jewellery back from them and sold at scrap just to get Lloyds off my back with their daily threatening.

 

I made losses of £8,000 just to pay Lloyds.

My contract was a one month rolling contract and yet they even tried to charge me a termination fee of £13,000.

 

Chap transfers are normally £35 and they tried to charge me £300 but I complained then they just charged me the £35.

 

I received a HIGH COURT CLAIM from Queens Bench Division in my personal name. Lloyds have decided to go after me personally and not my Limited company as I gave them my personal guarantees.

 

Today I sent the acknowledgement of service just so I could start my defence.

 

I dont deny I owe them money, but feel I have been mistreated and lost my business from the way they dealt with me. I really need advice. I don't have money to even pay for solicitors as this would be a civil matter.

 

All suggestions would really really be appreciated!

 

Thank you

[1970]

Firstly dont panic. Many of us have been there and it is possible to come through alive and sane!

 

I have personally experienced what you are going through with LTSB in Banbury and they too issued a high court claim based on a personal g'tee I gave for a limited company.

 

If it's any help, they ended up getting a charging order on my property and agreed to £200 a month based on a debt of £27k. After two years of monthly payments (£4400) I agreed a settlement of £20k which I managed to obtain via a new mortgage. Once I paid them off I put in a self assement tax return and got a £4000 refund on my tax as there is a rule that allows you to as you are paying off a business debt with personal money.

 

PM me if you want to chat and I'll give you my mobile number. I'm back in the game again as a director for a new company and I've learnt a lot. I cant help too much on the legal side but I can give moral support.

 

1970.

[MARTIN3030]

Welcome to the site.Looking into it for you.Have you got the terms and conditions ?

What periods does this relate to-from ?

[GuidoT]

Unfortunately I have experience of this.

 

LTSB partially withdrew funding overnight, they were covering off 80% and reduced to 60% overnight. I got around it by placing cheques in another bank account and setting up discounting facilities elsewhere. Fortunately I was in the process of setting up duplicate facilities elsewhere so that made it viable. Unfortunately the banks just do what they want.

 

I realise that you are further down the road.

 

The contracts they put in place give them all sorts of contractual freedom and onerous personal guarantees. When I looked at them whatever way I turned I was closed off and reasoning with them was pointless.

 

How much of the £90K can you afford to pay off?

 

How much of the £90K relates to unfair charges?

 

LTSB are bullies (like all banks) and they will use whatever tactics to obtain their money; do not let them get to you.

 

As this is a personal debt, if it ever gets that far, a judge is unlikely to force you to pay a sum that you cannot afford.

 

I know it is easy for me to say, but keep things in perspective. There are good people who will support and assist you here.

[transparentspoon]

Hi,

 

-snip-

 

As the issue sounds serious (and I'm no legal eagle) here's what I'd do in your situation:

 

1. Make immediate contact with your MP, alerting him to your situation (MPs aren't all corrupt - one helped a friend of mine who found himself in severe financial difficulties when his partner stole all the business' takings)
   
2. Ask to speak with a legal specialist at the Citizen's Advice Bureau (make a proper appointment asking specifically for a legal specialist though, don't just drop in)
   
3. Check to see whether any of your insurance policies or life assurance plans offer a free legal advice service
   

I'm not sure whether you'd qualify for Legal Aid but (in theory) if you have good advice from the CAB you could represent yourself anyway. In any case, check out the Community Legal Advice site as they might be willing to discuss the problem or point you in the right direction. Their number is 0845 345 4 345 and you can get the address by Googling "Community Legal Advice".

I'd also suggest that the whole point of having a limited company was to limit your exposure to liability, and so you need this clarified properly IE has the high court order been presented properly? Even if you've given them personal guarantees, the money was for the company not you, right?

 

-snip-

 

Good luck, and please keep us updated,

 

Neil

Edited July 29, 2008 by transparentspoon
Clarification

[jewelleryman]

Hi Neil

 

Thank you for your support. I will contact CAB and see what they could do for me.

 

Have a lovely day.

 

Thank you once again.

[jewelleryman]

Hi

 

Firstly the debt is not personal. It was given to the conmpany. The actual amount is around £78,000, rest is interest and their service fees. I would only be able to afford to pay around £20-£25k and that would be by re-mortgaging my house.

 

I was silly not to take any legal advice when I signed the personal guarantees.

 

When the banks withdraw a facility from you without warnings, it put the company in financial trouble as orders are placed and goods are offered with the facility in mind. When the facility is taken away, You can't pay your suppliers for goods YOU have ordered (suppliers won't take orders again) and you can't supply goods to the same credit seeking customers and again you promised to supply your customers but don't keep your promise. Loss of customers. I have a real big database of customers. In the first 2 weeks, sold over £250,000 jewellery. I'm in the business since a child. I have worldwide contacts from where to source the best jewellery at the best prices. I have big customers who wanted to place orders for Platinum wedding rings but I can't do anything!

 

Lloyds TSB Commercial Finance have destroyed me.

[GuidoT]

I fully understand that the debt relates to your business, but it has become personal because of the guarantees.

 

You need to try and move on from the difficulties they caused you and deal with the present problem of the litigation.

 

I am not very familiar with this type of litigation or the specifics of your case, but I see no way around not paying the £78K plus their reasonable interest and charges.

 

Providing you have some funds, I would try and work out a payment plan with them soonest, that would bring an end to the litigation and the related costs.

 

Failing that the matter will proceed to trial and if you loose you will have to pay the sum decided and their legal costs. They may also go for a charge on your property.

 

Please can others post some other alternatives and hopefully something more positive.

[jewelleryman]

Yes I have the terms & conditions. The contract was a one month rolling contract.

[photoman]

Jewelleryman

 

I agree with Neil.

 

This matter is something you cannot tackle by yourself, and you should seek proper legal advice.

 

Agree that the CAB and writing to your MP are both good ideas.

 

It sounds like some of Lloyds practices (ie getting Barclays to freeze your account) were a bit extreme and possibly a breach of your customer confidentiality (see section 11 of the Banking Code, and the Data protection Act).

 

There may be counter legal actions you can take with regards to this, either through the courts and/or the Financial Ombudsman (FOS), and this may even warrant a claim for damages.

 

Perhaps ask the legal expert at CAB about all this ?

 

Best regards

 

PM

[1970]

From my experience the personal guarantee terms are short and sweet. It is a 1 page document with no more than about 10 sections. My lawyer looked over them and couldn't find anything that he could use against LTSB.

 

I have a good lawyer and he has managed to get me out of a few commercial holes in the past including a £30k personal guarantee.

 

It's still worth a look though in case there has been a change or an error.

 

The name of the game with this is to remember that it's never as bad as you imagine. LTSB just want their money within a reasonable timeframe and if you can offer some form of security they will feel comfortable with an arrangement to pay.

 

I actually defaulted on my arrangement with them for 4 months and they issued a stat demand for bankruptcy which was an error as they had security for the debt by way of my property. I got the stat demand thrown out.

 

It would be handy if you could scan the documentation and post it here (block out your personal details though).

 

Ideally, the high court claim and the indemnity document.

 

Perhaps the factoring agreement would also be useful, as there may be a way of establishing that LTSB are in breach.

 

1970

[GuidoT]

I realise that you are probably not aware but you should not have four separate threads asking the same question.

 

I have unapproved two (deleted as far as you are concerned) and will merge the others.

Edited July 29, 2008 by GuidoT

[jewelleryman]

Sorry, I didn't realise. I did that so I could get advice from different people.

 

Apparantely, Lloyds TSB Commercial Finance is not governed by any financial body.

[GuidoT]

No problem.

 

I realise why you did it, but if everyone did it, we would have countless duplicate threads.

 

I am going to leave this thread here (and merge the other one in) as you are obtaining the most helpful advice here in the Lloyds forum (better than mine) however if you want it moved somewhere else then just post up.

Edited July 29, 2008 by GuidoT

[elsinore]

 

Apparantely, Lloyds TSB Commercial Finance is not governed by any financial body.

 

Hi jewelleryman.

 

Lloyds TSB Commercial Finance is a division of Lloyds TSB Bank plc, which is licensed and regulated by the Financial Services Authority.

 

FSA Register

 

Els

[jewelleryman]

how can i attach my documents here so you could all see them?

[photoman]

how can i attach my documents here so you could all see them?

 

Firstly scan your images and save as jpegs

 

Then open an online account with an image hosting website (somebody like photobucket.com which is free)

 

Then post your image to photobucket

 

Then once it is posted it will give you a series of codes to use.

 

Copy the code (I think its the one that starts with IMG) and paste it into your post on here.

 

Make sure you cover over any personally identifiable information (name, address, account numbers etc)

 

It may take a little trial and error, but thats the jist of it.

 

PM

[jewelleryman]

thanks, ill try that now..

[jewelleryman]

Please click the link below to see my docs regarding my problem. all suggestions would be appreciated. Thank you.

 

jewelleryman - Photobucket - Video and Image Hosting

[jewelleryman]

above I have put all the docs. Thanks photoman, its a really good website.

[photoman]

Glad I could be of SOME help.

 

I'm unable to help you regards the specifics though, and re-iterate my advice (seconded by others) that you deal with this by consulting and using legal professionals.

 

PM

[transparentspoon]

jewelleryman,

 

Just a little bit of info - things have obviously progressed beyond any kind of complaints stage, but I've just been looking through my LTSB business pack and found two pamphlets:

 

1. In addition to the normal Banking Code there is also a Business Banking Code, to which LTSB is a signatory (complaints about contravention of the code need to be addressed to the Financial Ombudsman Service)

 

2. LTSB is officially represented by the British Bankers' Association and their "Principles" pamphlet outlines "how banks will seek to work together with small and medium sized businesses to get the relationship right from the outset and to help if the business gets into difficulties" - I'm not sure what the complaints procedure is but I think it's in line with FSA guidelines (something along the lines of having to go through the bank's own complaint procedure first then the next step is the Ombudsman again)

 

If you haven't already done so, I'd recommend writing to your MP because you are one of their constituents and your situation certainly isn't unique. Depending on who they are, they might be more than willing to take on the fight if it's an issue they feel strongly about and have other constituents in the same boat.

 

I'll try and look through your documents over the weekend and would also ask the other forum members to have a quick look as well if they have the time so you're not just getting my uninformed opinion As photoman says, for informed and accurate advice you need to speak with a legal professional, but there might be something in these documents that you can use to defend yourself with. If it goes to the High Court then the bank's conduct and handling of your situation will be taken into consideration so you need to think about cataloging all the events that have happened for your affidavit (witness statement).

 

Best of luck,

 

Neil

[jewelleryman]

Any advice?

[JonCris]

OP when are you to be heard at the High Court??

 

You appear to have entered into what is known as a factoring agreement. This agreement allows you to submit your invoices direct to the bank who in turns pays you an agreed amount (usual maximum 80%) plus other fees & charges.

 

The invoice is sent to your customer with a clear endorsement that it is factored. Please correct me if I'm mistaken & once you provide the info requested I'll try & help further other than to say from what you describe you may, & even though the bank will almost certainly argue change of position, have grounds for a counter claim against the bank

 

Also did they obtain an order to freeze your other bank account & if not what excuse have Barclays come up with to explain their behaviour??

Edited August 2, 2008 by JonCris

[jewelleryman]

Hi JonCris,

It like factoring but I had confidential Invoice discounting where we issue the invoices and we chase the customers. Customers dont know the invoices are discounted. Thats what Lloyds told me anyway but they did ring the customers on my behalf. What exactly do you mean "change of position?"

 

And NO they did'nt get ANY order from anyone to instruct Barclays to freeze my account. They havent even chased the company but me personally. Barclays say, they froze my account as Lloyds have a debenture but they are not giving this in writing. I've been told that my barclays manager probably did this to protext himself, I dont really know but this is some internal stuff.

 

No warning or notices were given either from Lloyds or Barclays to freeze my facility and accounts. Its because of this action of theirs, Im in this position today.

 

High Court Claim was issued on 17th July. I filed Acknowledgement of service to get extra 14 days to get advice from this site and file a defence. Situation is I cant even afford to pay for solicitors as its a civil matter.

 

Which is why Im desperately seeking all the help and advice.

 

Thank you.