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Bank taking us to court without us having ever signed any agreement

Mucky Pup

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Hi People


I have spent the last few days reading through lots of different posts trying to see if anyone has the same problem as us, I'm not sure if I am just not looking in the right place or if similar problems to ours just hasn't arisen here.

Anyway I have decided to take the 'bull by the horns' and ask for help with our specific problem.

If I am in the wrong place can someone please point me in the right direction? Thanks


Our story is quite long & complicated so I will keep things to the bare basics for now, obviously I am happy to elaborate & answer any questions.


About 3 years ago a bank agreed to fund us between £50k & £100k for our business.

An account was set up for us & the bank put the money into the account.

We never, ever signed anything, not to open the account, not to borrow money, nothing.

Things became quite messy with the bank as the 'credit crunch' hit & the manager messed us about & went back on his word on several occasions.

The bank then demanded that we pay back the money.

We have asked the bank for copies of any agreements we may have had with them, we have been told that there are no signed or un-signed agreements.

We have no idea of what interest rates we are being charged or what the banks terms & conditions are.

The bank has now instigated court proceedings.


As I said before, this is a very basic outline regarding our situation.


Does anyone out there have any idea of where we stand with this & how we go about things with the court?


Thank you in advance for your help


Mucky pup

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Hi Mucky Pup, welcome to CAG.


Is the business that of a sole trader, partnership or limited company?


Are you still trading?


Assuming the bank has actually issued a claim against you, can you post up the particulars of claim? If you do, please make sure you have erased all identifying information.


What is your objective? Are you hoping to defend the claim in full and not repay anything or are you trying to mitigate the sum to be repaid and repay it at a level you can afford?





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What poor education I have received has been gained in the University of Life

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At last I get to talk to an MP!


Welcome to CAG!


Elsinore has asked IMHO some very relevant questions. We do need to know the POC (Particulars of claim) in order to comment.

You say you've never had an agreement. Did they send a copy of an agreement with the POC?

I'm no expert but if they've not sent a copy of the signed agreement and you've not got one. Then I do not know how they can establish a claim.

I assume as this figure is between £50-£100k then the Consumer Credit Act is not relevant?!


Does anyone else have any thoughts or ideas on this point or have any threads for MP to look at?


Kind regards,



Pigs do Fly!

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Thats a lot of money for a bank to lend in a recesssion, did you not wonder why you hadnt been asked to sign anything, at any stage, not to open the account, not to borrow money, nothing? I'd be amazed already! Alarm bells would ring loud and clear..How come you didnt think to ask what interest rate you would be intending to pay on the loan when accounting, planning for your business, applying for the loan? I mean what attracted you to that lender, were loans being advertised for the taking? Anymore details, dieing to know..it beggars belief.


By law, you may very well get away with keeping it if you keep your nerve, as a Judge would probably think very dimly of a Bank erring to that degree and teach them an example, its very debateable but black and white in law I think, dependent on the Judge you get. You must stay around to let us know what happens and keep us all updated, it's classic!

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I think that would be an exceptionally risky game to play. Clearly the bank are going to be able to establish that you have an account with them, either through statements, credit/debit cards, cheque books etc...


I think to argue that between £50 - £100k was deposited into this account, that has been subsequently spent,and that you never questioned either the interest bearing on such an amount - particularly for the purposes of business (where the financing should have been built into your cash flow) will stretch the imagination of even the most moderate of judges.


Furthermore, if you're going to argue that no contract exists then you shouldn't have to repay the money, I am pretty certain that the bank will counter that the funds were released in errand. In this situation the test would be whether you spent the funds on day-to-day activities and can legitimately claim not to have noticed the banks error. However in this case (a business start-up) clearly without these funds your business could not have started and, as such, you could not claim these as 'day-to-day' activity.


I am just making you aware that if you go down that route of 'prove I owe you the money' the bank have a very simple task of proving they deposited the money in your account, and that it has been spent. They could, quite legitimately, ask you to return the money that was deposited into your account in error.


As with previous posters, I am amazed that you have not had to sign anything with the bank, either to open a business account, or for the financing. Did you already have relationships with the bank, either in a personal or business capacity? Moreover, as entrepreneurs, I am surprised you were not more concerned with the terms and conditions (repayments, interest, penalties and clauses for early repayment) for the finance.


Had you already made a significant deposit into the business account? I know (from personal experience) that business loans for start-ups currently (like Mortgages) are only up to 75% of the required equity. Therefore, to secure the finance from the bank, you must have deposited at least £20k with them (or shown equivalent external investment).


Here to help.


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  • 1 month later...

To add to advice given by others, I'm afraid that the bank making the payment into your account (presumably with them?) of the principal sum is likely to be sufficient for a judge in either the county or (more likely) high court to decide that an implied agreement for repayment exists and I would not expect you to be able to keep it. What security did the bank seek, and have the tried to exercise it yet?


NOTE: I am NOT a lawyer, but I would strongly recommend that you take the advice of one as soon as possible.

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