£15k debts - Settlements offers

[JeffW]

About 7 years ago, I took out a loan from Lloyds TSB, which was supposed to be repaid over a period of 5 years. Due to a period of financial difficulty, I fell into arrears. Since then, I have been on various repayment programmes.

 

Because the APR on my loan is 18% of the full amount of the loan, I have been getting deeper and deeper into debt, despite making repayments.

 

I find this situation unfair. I am thinking of saying to Lloyds TSB 'Give me a loan where my total repayment is equivalent to what I was originally supposed to have paid over the 5 years, minus what I have already paid, or I'll see you in court'.

 

Also, I feel I was missold my insurance. Had I known it would not cover people in the line of work I was in at the time (telesales), I would not have taken it out. Can I make a claim in respect of this?

 

Lloyds TSB are threatening to issue me a default - Is there anything I can do to force Lloyds TSB to suspend this action?

 

Thanks in advance for your help.

 

Jeff

[JeffW]

I am considering taking Lloyds TSB to court over a loan that was leant to me at a time when I was in severe financial diffuculty (the loan was for more than my annual salary, and was 18% APR!).

 

When looking at claims, do the courts take into account whether the bank acted reponsibly in loaning the money?

 

Regards

 

Jeff

[yourbank]

No the courts do not look at that.

[BankFodder]

Irresponsible lending is an important issue which is talked about very often, which is a frequent topic of discussion on this site and because of the present financial crisis is becoming an extremely significant matter.

 

I think that there is no doubt that the bank owes you a duty of care and it has a duty to lend responsibly. This is even more certain now because the proposed FSA replacement to the banking code which is due to come into force in November of this year refers to responsible lending. The new retail banking rules of conduct will be obligatory and the FSA will have the power to impose sanctions for non-compliance.

 

Of course the problem is to identify what is "irresponsible".

 

I am not aware so far that there has been any litigation on the basis of the bank's duty to lend responsibly. It is quite wrong, however to say that the courts do not look at the question of irresponsible lending. The courts will look at any claim brought before them where that claim falls under an acceptable cause of action and is appropriately argued.

 

Certainly we hear so many cases where people prisons are in difficulties and have exceeded their overdrafts and very clearly have trouble coping and the bank's solution is to consolidate it all into a loan. We often hear of people being threatened by the banks if they will not accept the consolidation loan. This kind of situation, in my view, this prima facie evidence of irresponsible lending because it must be clear to the bank that there is already difficulty and furthermore they are exercising duress as a result of their dominant position in the current account relationship.

 

If you think that you are the victim of irresponsible lending then maybe you should tell us a little bit more about it here. However I am quite sure that to challenge the bank on this basis will be a difficult road. Having said that of course it may be that the banks are often being challenged for this and simply settling out of court. I can imagine that no bank would want to have this kind of allegation made in public. We all know that they are little better than a bunch of bullies -- and nobody likes to have its bullying activities aired in public.

[JeffW]

Thanks for your reply BankFodder.

 

My reason for considering the lending to have been irreponsible was that, at the time, my credit file was peppered with late payments (I may have even had a default or two), and I was earning £12,000 a year. The level of risk the bank must have known they were taking is reflected in the fact that, whilst most of the country enjoys nigh on 0% interest on their loans, I am still paying 18% on the amount originally borrowed.

 

Incidentally, I also consider the way the bank treated me when I signed up to be unfair. I was told that, because I was signing in the branch, I didn't have a cooling off period. When I asked whether I could be given a copy of the contract to take home so I could take it home and consider it, I was told 'Not really', which is surely a breach of my rights. Also, I only discovered when I tried to make a claim on the insurance I took out that it didn't cover my line of work. As it's my word against the bank saleswoman's, and the loan was sold several years ago, there is no way of proving this. In light of this, would a court take my claims seriously?

 

Regards

 

Jeff

 

Irresponsible lending is an important issue which is talked about very often, which is a frequent topic of discussion on this site and because of the present financial crisis is becoming an extremely significant matter.

 

I think that there is no doubt that the bank owes you a duty of care and it has a duty to lend responsibly. This is even more certain now because the proposed FSA replacement to the banking code which is due to come into force in November of this year refers to responsible lending. The new retail banking rules of conduct will be obligatory and the FSA will have the power to impose sanctions for non-compliance.

 

Of course the problem is to identify what is "irresponsible".

 

I am not aware so far that there has been any litigation on the basis of the bank's duty to lend responsibly. It is quite wrong, however to say that the courts do not look at the question of irresponsible lending. The courts will look at any claim brought before them where that claim falls under an acceptable cause of action and is appropriately argued.

 

Certainly we hear so many cases where people prisons are in difficulties and have exceeded their overdrafts and very clearly have trouble coping and the bank's solution is to consolidate it all into a loan. We often hear of people being threatened by the banks if they will not accept the consolidation loan. This kind of situation, in my view, this prima facie evidence of irresponsible lending because it must be clear to the bank that there is already difficulty and furthermore they are exercising duress as a result of their dominant position in the current account relationship.

 

If you think that you are the victim of irresponsible lending then maybe you should tell us a little bit more about it here. However I am quite sure that to challenge the bank on this basis will be a difficult road. Having said that of course it may be that the banks are often being challenged for this and simply settling out of court. I can imagine that no bank would want to have this kind of allegation made in public. We all know that they are little better than a bunch of bullies -- and nobody likes to have its bullying activities aired in public.

[JeffW]

Lloyds TSB are threatening to default my account if I don't pay off my loan by the 11th of May.

 

Is there any way of forcing them to postpone this, such as by threatening legal action against them?

 

Regards

 

Jeff

[yourbank]

Irresponsible lending is an important issue which is talked about very often, which is a frequent topic of discussion on this site and because of the present financial crisis is becoming an extremely significant matter.

OFT was interested in this and last year had a consultation on Irresponsible Lending(below is the views expressed).

http://www.oft.gov.uk/shared_oft/business_leaflets/consumer_credit/oft1012resp.pdf

I think that there is no doubt that the bank owes you a duty of care and it has a duty to lend responsibly. This is even more certain now because the proposed FSA replacement to the banking code which is due to come into force in November of this year refers to responsible lending. The new retail banking rules of conduct will be obligatory and the FSA will have the power to impose sanctions for non-compliance.

 

Of course the problem is to identify what is "irresponsible".

Totally agree with you on this.

I am not aware so far that there has been any litigation on the basis of the bank's duty to lend responsibly. It is quite wrong, however to say that the courts do not look at the question of irresponsible lending. The courts will look at any claim brought before them where that claim falls under an acceptable cause of action and is appropriately argued.

Case law on irresponsible lending is required.

Certainly we hear so many cases where people prisons are in difficulties and have exceeded their overdrafts and very clearly have trouble coping and the bank's solution is to consolidate it all into a loan. We often hear of people being threatened by the banks if they will not accept the consolidation loan. This kind of situation, in my view, this prima facie evidence of irresponsible lending because it must be clear to the bank that there is already difficulty and furthermore they are exercising duress as a result of their dominant position in the current account relationship.

I think there is an argument that could say if you are paying out £400 on debts and the bank can cut it to £200 that it is not irresponsible....and yes I have done that personally using the same logic.

If you think that you are the victim of irresponsible lending then maybe you should tell us a little bit more about it here. However I am quite sure that to challenge the bank on this basis will be a difficult road. Having said that of course it may be that the banks are often being challenged for this and simply settling out of court. I can imagine that no bank would want to have this kind of allegation made in public. We all know that they are little better than a bunch of bullies -- and nobody likes to have its bullying activities aired in public.

 

Never assume a bank will settle out of court. I think that from the following post of the OP that his first route is the PPI reclaim. I don't think that on this case there is irresponsible lending but I think the OP does need to get hold of all paperwork he completed for the loan since the figures entered for his income will be the ones that would be interesting to know. That could prove that there was a failure of due dilligence if those figures were inflated in any way.

[JeffW]

I have recently been on a short-term repayment programme for a loan I took out with Lloyds TSB, having fallen into financial difficulties. Because I missed my April payment, Lloyds TSB are threatening to default my account if I haven't paid the full balance of the loan by the 11th of May.

 

If Lloyds TSB default my account, can I have this default removed on the grounds that I was not in arrears for three consecutive months at the time the default was issued?

 

Thanks in advance.

 

Jeff

[JeffW]

I didn't lie about my income, if that's what you mean.

 

According to this article, irresponsible lending goes against the voluntary banking code:

 

BBC NEWS | Business | Bank 'offered unaffordable loans'

 

Jeff

 

I don't think that on this case there is irresponsible lending but I think the OP does need to get hold of all paperwork he completed for the loan since the figures entered for his income will be the ones that would be interesting to know. That could prove that there was a failure of due dilligence if those figures were inflated in any way.

[blueda]

This is the usual standard threatogram when a payment is missed, the main thing is not to ignore them though, so make contact and explain your situation and that you are working towards paying the debt, there are letters on the letters templates page you can use to help you when writing to Loyds TSB. Here is the link,

http://www.consumeractiongroup.co.uk/forum/generel-debt-issues/20758-creditors-dcas-letter-templates.html

[yourbank]

I didn't lie about my income, if that's what you mean.

You might not, but they might have inflated it

According to this article, irresponsible lending goes against the voluntary banking code:

 

BBC NEWS | Business | Bank 'offered unaffordable loans'

 

Jeff

Do you see what I am saying?

[JeffW]

Yes, I hadn't thought of that. Thanks.

 

Do you see what I am saying?

[JeffW]

If I want to sue a bank, and the amount is too high to be dealt with in the small claims court, how do I go about this, and what are the risks and the costs?

 

Thanks in advance.

 

Jeff

[JeffW]

As anyone tried forcing banks to correct the information they've given to the credit agencies by threatening to sue them for defamation on the grounds that the incorrect information could prevent them from getting loans or credit agreements?

 

If so, have you found this method to be successful?

 

Regards

 

Jeff

[JeffW]

I'm thinking of defaulting on my loan with Lloyds TSB, as doing so would cause the whopping 20% interest per annum I'm paying to be suspended (after my hard-earned taxes spared them from bankrupsy, it's the least they can do!).

 

My credit file's already knackered thanks to Lloyds, so I'm not worried about not being able to get a loan if I were to default. However, would a default stop me from getting a landline phone with Virgin or BT, or a broadband contract?

 

Thanks in advance.

 

Jeff

[postggj]

to get a landline, sky, broadband,

the likes of virgin will credit check you

its not all bad news, these companies are so desperate for customers they will prob connect you with a deposit

 

i know when my credit file was shot, orange accepted me with a 250 quid deposit

[craigers]

I have 5 defaults on my file. BT have never asked for a deposit. Before Virgin media came into existence, Telewest connected me with a £100 deposit. I wouldn't worry too much.

[lozzzy]

Post office home phone & Broadband wont touch me and i only have 1 default!

[JeffW]

Currently, I'm paying 13% APR on a Lloyds TSB loan. Would I be right in thinking that, if I were to default on the loan, it would be passed to an external company to collect, and the interest would be frozen?

 

I'm aware that getting a default means that I won't get any credit anytime soon, but thanks to Lloyds TSB, my credit file is well and truely messed up anyway, so I'm not too bothered about that!

 

Thanks in advance.

 

Regards

 

Jeff

[Guest Old_andrew2018]

Bump

[JeffW]

I've just tried phoning Lloyds about a loan I'm repaying.

 

After entering my account details, I was told by a recording that my account had been passed to the Consumer Debt Recovery Team, who will be in touch.

 

What are the implications of this? And does anyone have any tips for dealing with this team?

 

Thanks

 

Jeff

[the_freedom_trail]

Hi Jeff,

 

In basic terms it would appear that your debt has been passed to LLoyds inhouse debt collectors. Is there any possible reason that this might have happened, for example have you defaulted on any payments due or anything like that?

 

Regards,

 

TFT

[JeffW]

Just a bit...

 

I got fed up of Lloyds TSB's extortionate rate of interest and their broken promises.

 

And when I tried to get answers, I invariably ended up speaking to some muppet in Delhi with pigeon English.

 

So I thought missing a few payments might be a way of getting Lloyds to sit up and pay attention! Also, I hoped that, if my debt was transferred to debt recovery, then the interest would be frozen. Will it?

 

Cheers

 

Jeff

 

Hi Jeff,

 

In basic terms it would appear that your debt has been passed to LLoyds inhouse debt collectors. Is there any possible reason that this might have happened, for example have you defaulted on any payments due or anything like that?

 

Regards,

 

TFT

[the_freedom_trail]

Hi Jeff,

 

I understand your frustrations with Lloyds call centre staff, I am affraid that when I phone up my insurers or bank I just hang up till I get an operative I can understand lol.

 

I am affraid to say that Lloyds will not automatically freeze your interest because your account has been passed to collections. You say you have missed a few payments - are you aware of whether or not you have received a default notice on the account? This is quite important.

 

Also, Lloyds will no doubt be adding default charges to your account aswell. How you resolve this matter will depend on your financial circumstances. If you are in financial hardship then I would advise you to make a written offer of repayment - this would be your opportunity to get any charges removed and interest frozen.

 

If you are not in financial hardship I would say pay the loan down as quickly as possible.

 

Whatever you do, never speak to Lloyds on the phone, only communicate with them via writing.

 

You also mention that you fed up of their extortionate interest rates and broken promises, have Lloyds acted in any unlawful maner which may impact the agreement you have?

 

To help you further it would be good to know the following info:

 

Is the loan secured/un-secured

Approx loan value

Date loan was taken out

Whether you have the original loan agreement

Was there any PPI (payment protection insurance) on the loan

 

Best Regards,

 

TFT

[JeffW]

Thanks TFT

 

In answer to your questions:

 

It's an unsecured loan

The original loan was for £12,000 pounds

The loan was taken out around 2001 or 2002 (it was supposed to be a 5 year loan!)

Not sure if I have the original loan agreement

There was PPI (and funnily enough, I've just been made redundant, so it could finally prove useful).

 

I can't remember if I've received a letter threatening to default me, but I haven't received any letters at all from Lloyds this side of the New Year.

 

As for Lloyds acting unlawfully, I was told it wouldn't be possible for me to sign the loan agreement at home, which removed my cooling off cancellation rights.

 

The bank repeatedly promised to put me on a repayment plan if I met the payment plan for 6 consecutive months, but this never materialised.

 

And I'm sure I wouldn't have taken out the insurance had I been told it wouldn't cover me for the profession I was in at the time (telesales).

 

The recorded message said that the debt recovery dept would be in touch in the next few days. I'll let you know what the letter says when I receive it.

 

Jeff

 

Hi Jeff,

 

I understand your frustrations with Lloyds call centre staff, I am affraid that when I phone up my insurers or bank I just hang up till I get an operative I can understand lol.

 

I am affraid to say that Lloyds will not automatically freeze your interest because your account has been passed to collections. You say you have missed a few payments - are you aware of whether or not you have received a default notice on the account? This is quite important.

 

Also, Lloyds will no doubt be adding default charges to your account aswell. How you resolve this matter will depend on your financial circumstances. If you are in financial hardship then I would advise you to make a written offer of repayment - this would be your opportunity to get any charges removed and interest frozen.

 

If you are not in financial hardship I would say pay the loan down as quickly as possible.

 

Whatever you do, never speak to Lloyds on the phone, only communicate with them via writing.

 

You also mention that you fed up of their extortionate interest rates and broken promises, have Lloyds acted in any unlawful maner which may impact the agreement you have?

 

To help you further it would be good to know the following info:

 

Is the loan secured/un-secured

Approx loan value

Date loan was taken out

Whether you have the original loan agreement

Was there any PPI (payment protection insurance) on the loan

 

Best Regards,

 

TFT