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Lloyds Loan - offered more money to pay for the loan itself & income calculated inappropriately


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Hi,

 

Back in 2002, I went into a branch of Lloyds TSB to apply for a student account (to gain access to the interest free overdraft facility).

I was an existing Lloyds account holder, had recently enrolled on a law degree course (full time) and was reliant on my Disability Living Allowance (plus Student Loan) as my income.

 

I was taken into an interview room and the account application was declined. I was then offered a personal loan to cover the credit card and overdraft debts I intended to pay from the the interest free overdraft attached to the student account.

 

I made it perfectly clear to the sales chap that my sole income was in the form of the DLA benefit and the Student Loan I would be in receipt of. He explained that it would be ok to consider these as my income.

 

I was originally needing £3k to clear my existing debts. He looked at what the maximum I would be able to borrow, based on the system's calculations and offered me £7k, at £286 per month. The sum of interest was not mentioned, nor the repayment period. The extra £4k was suggested to be left in the account to cover the loan payments for 6 months, at which point I would be able to to apply for another loan, which should be at a lower monthly figure.

 

I was in turmoil at the time and listened to the sales chap, thinking his "advice" was exactly that. He printed the paperwork off, and I signed it - no reading through it with me, just placed in front and "sign here, here, here", etc...So I went ahead and signed.

 

I paid off my credit cards, Lloyds TSB overdraft (made predominantly from penalty charges) and bought a couple of text books for my law course... (One of which happened to be on Contract Law).

 

After the 5th payment was due to go out, I looked at reapplying for another loan to bring the monthly payment down. I then realised that I was not going to be offered a better rate...

 

Jump to 2006 and many months of letters and phonecalls between myself, the collections centre and the Bristol Customer Service Centre, I had a result - Lloyds admitted that they should not have loaned me the amount they did, so the interest would be cancelled (29% APR!!), all charges removed (some £900 was refunded to my current account as they had been taking my DLA Benefit from my savings account to pay for account, overdraft and late payment charges) and an affordable repayment (at the time, when I'd had to leave uni and go back to work) set up.

 

6 months later, the monthly repayment figure reverted to the original £286 (I was never informed this would happen), so I had to jump through hoops again to try and bypass the offshore call centre, speak to someone in the Brighton collections centre, re-set-up an affordable monthly payment and have the late payment, unauthorised overdraft and missed direct debit charges refunded.

 

I wrote to Bristol again, explaining that whilst I had agreed to their "offer" initially, by changing the amount without my consent, they had breached the contract and I no longer felt that repaying a loan that had been mis-sold (in it's entirety) was neither fair nor reasonable.

 

I am at a standstill - I no longer work after being medically retired, so cannot afford what used to be the "affordable repayment" of £75 per month. My credit rating is ruined, Lloyd's have passed on the debt to a collection agency that call 4-8 times per day, plus send letters that clearly state "Debt Collection" and "Final Demand" within the address window.

 

I am currently in receipt of DLA (Mobility & Care at the highest rate) plus ESA (Support Group), so there is no chance of being able to work to pay this off, nor do have the facility (let alone the intention) to apply for finances elsewhere.

 

I am in desperate need of some advice - I would like to get this mess sorted but have no idea where I stand.

 

(If you have read this far, I thank you for your patience and look forward to your advice)

 

Ollie

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  • 2 weeks later...

Will be requesting another SAR (since the one they sent me originally did not contain ALL the information requested).

 

I would still be interested to know how people feel about going for a cancellation of the WHOLE loan amount due to the above?

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There might be something in the New Lending code that would be of help.. something about treating customers fairly TCF..

 

I will go find a copy for you.

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Advice & opinions given by citizenb are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional.

 

PLEASE DO NOT ASK ME TO GIVE ADVICE BY PM - IF YOU PROVIDE A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER ADVICE THERE:D

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Here it is. It is more to do with overall lending as you require.. not just PPI :) Sections 178 to 235 should be of interest.

 

 

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Have we helped you ...?         Please Donate button to the Consumer Action Group

 

Uploading documents to CAG ** Instructions **

 

Looking for a draft letter? Use the CAG Library

Dealing with Customer Service Departments? - read the CAG Guide first

 

1: Making a PPI claim ? - Q & A's and spreadsheets for single premium policy - HERE

2: Take back control of your finances - Debt Diaries

3: Feel Bullied by Creditors or Debt Collectors? Read Here

4: Staying Calm About Debt  Read Here

5: Forum rules - These have been updated - Please Read

 

 

BCOBS

 

2: Does your Bank play fair - You can force your Bank to play Fair with you

3: Banking Conduct of Business Regulations - The Hidden Rules

4: BCOBS and Unfair Treatment - Common Examples of Banks Behaving Badly

5: Fair Treatment for Credit Card Holders and Borrowers - COBS

 

Advice & opinions given by citizenb are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional.

 

PLEASE DO NOT ASK ME TO GIVE ADVICE BY PM - IF YOU PROVIDE A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER ADVICE THERE:D

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  • 2 weeks later...

SAR sent, will await their response.

In the meantime, I'm getting letters every day (and phonecalls) from Credit Security Limited. I have told them on several occasions that I have disputed this debt since Lloyd's last decision letter, and that they should refer back to Lloyds (and stop hassling me!)

 

Since the last phonecall, I have had a flurry of letters stating I need to prove to them (the DCA) that I have a "valid reason for non-payment".

 

My understanding was it is up to the DCA to get in touch with Lloyds - not make life easy for them...?

 

Advice appreciated - all the "Debt in Dispute" letters refer to a dispute that the debt actually exists - my dispute is that the Lloyds loan account should be written off...

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