Irresponsible Lending

[justiceforall]

I don't know if this is relevant to this forum and my apologies if it isn't, but I am hoping someone can point me to links or advice on Irresponsible Lending. I am currently arguing "Irresponsible Lending" with Lloyds and their collection agency and neither of them will even acknowledge the point I am making. Has anyone else argued "Irresponsible Lending" with a bank in the past; and can you give me any legal or OFT pointers on the issue? I am basically arguing from the same standpoint that the founder of this forum (Dave) seems to have argued in 2004; that of 'the legalities of getting me further into debt'; i.e. giving me another bigger loan to pay off the first when it was perfectly clear I was having trouble paying off the first. I think I am justified in my standpoint, and the fact that neither Lloyds nor its successive debt collection agencies will acknowledge my point on Irresponsible Lending, leads me to believe this may be a grey area for them. Many thanks for any advice you can offer.

[dave]

I'm afraid I don't know.

 

In my initial letter to the bank (HFC) I basically just said "I can't believe what you are doing is legal." and they gave in.

 

I'm really sorry, my only understanding of legal things is the punitive measures, the DPA and the Civil Procedure Rules - all from books bought with the Amazon Vouchers kindly donated by visitors to the forum. Anything outside of these books I'm afraid I don't know.

 

Hopefully, someone else who does know will be along shortly.

[justiceforall]

I'm afraid I don't know.

 

In my initial letter to the bank (HFC) I basically just said "I can't believe what you are doing is legal." and they gave in.

 

I'm really sorry, my only understanding of legal things is the punitive measures, the DPA and the Civil Procedure Rules - all from books bought with the Amazon Vouchers kindly donated by visitors to the forum. Anything outside of these books I'm afraid I don't know.

 

Hopefully, someone else who does know will be along shortly.

Thanks for taking the time to reply Dave, it's much appreciated. Spookily enough, I got another patronising letter from my Bank Manager today on another matter. Banks just don't care; you are the proverbial number; and no amount of spin will convince me they are justified in their customer service approach (which very often equates to "stuff you, it's your responsibility and we ain't bothered you think we acted unfairly").

 

For what it's worth, I am learning all sorts of stuff about Irresponsible Lending as I go along (even dug out some useful info from legal websites at the weekend) so if anybody else on the forum wants a tangible argument in this respect, I'd be happy to put my own letter which I am currently formulating in the private area of the website with the usual deletions to protect the innocent (that'd be me)!

 

Best wishes

JFA

[scorpio_manuk]

Thanks for taking the time to reply Dave, it's much appreciated. Spookily enough, I got another patronising letter from my Bank Manager today on another matter. Banks just don't care; you are the proverbial number; and no amount of spin will convince me they are justified in their customer service approach (which very often equates to "stuff you, it's your responsibility and we ain't bothered you think we acted unfairly").

 

For what it's worth, I am learning all sorts of stuff about Irresponsible Lending as I go along (even dug out some useful info from legal websites at the weekend) so if anybody else on the forum wants a tangible argument in this respect, I'd be happy to put my own letter which I am currently formulating in the private area of the website with the usual deletions to protect the innocent (that'd be me)!

 

Best wishes

JFA

 

Hi Justice for all,

Please can you help me out with this one (shoving hand high in air and begging) it is an argument that I want to persue with them when they will listern to me for a second instead of not reading letters and just sending out inapropriate standard letters !!!. Any pointers will be gratefully received.

 

Kind regards, Scorpio_manuk.

[justiceforall]

Hi Justice for all,

Please can you help me out with this one (shoving hand high in air and begging) it is an argument that I want to persue with them when they will listern to me for a second instead of not reading letters and just sending out inapropriate standard letters !!!. Any pointers will be gratefully received.

 

Kind regards, Scorpio_manuk.

 

I have just PM'd you with an outline of my strategy because I do not think it would be helpful to post it publicly. This is politics and we play the same dirty games the banks play.

 

Best wishes

JFA

[BankFodder]

I'm not aware or any notion of "irresponsible lending" as a basis for legal argument unless it is possible to show that it is a form of negligence -- and I would find that very surprising.

However if you come across anything we would certainly like to know about it on this forum. It certainly seems reasonable to me to expect that lenders owe a duty not to take action not harms others including their customers. That is certainly the case with these suppliers of products when those products are dangerous or defective. I suppose it would be possible to extend those principles over to lending but it would be novel and would lead to complicated litigation and expense and great risk.

[justiceforall]

oops...

[justiceforall]

I'm not aware or any notion of "irresponsible lending" as a basis for legal argument unless it is possible to show that it is a form of negligence -- and I would find that very surprising.

However if you come across anything we would certainly like to know about it on this forum. It certainly seems reasonable to me to expect that lenders owe a duty not to take action not harms others including their customers. That is certainly the case with these suppliers of products when those products are dangerous or defective. I suppose it would be possible to extend those principles over to lending but it would be novel and would lead to complicated litigation and expense and great risk.

My own standpoint (argument) is simple and very much based on Lloyds own CEO's standpoint. In February of this year, Lloyds chief executive Eric Daniels told the Evening Standard; "It is not in the interests of the individual customer or the group to lend money to a customer who cannot afford to repay.” He was also quoted as saying: "We take our responsibilities in this regard very seriously and have a responsible lending programme. Over time, we expect the consumer position to stabilise in an improving economy."

 

From a PR standpoint, Lloyds has always denied it has ever engaged in irresponsible lending; yet it is common knowledge (as was the subject of a series of media articles last year) that bank managers are incentivised on loans. However, they are also incentivised to minimise bad debts except the first incentive (as far as they are concerned) is to earn commissions and bonuses on loans; otherwise the incentive to minimise bad debts wouldn't exist! The manager who loaned me money knew I had judgements against my name and his response was, “there are figures I can go to without consulting my superiors”. Responsible Lending? I don’t think so! And as far as I am concerned, he and/or Lloyds, is equally culpable in the indebtedness that occurred not just in the first instance but in the second.

 

A credit agreement is a two-sided contract and it can easily be argued that both the debtor and the bank are equally culpable, especially so when the bank has chosen to ignore what it is honestly told by the loan applicant. How do I know this? Why can I say it so forcefully? Simple! To forecast payment likelihood, responsible decisions are based on applicant provided information and independent credit reference data. In my case, the bank manager did not even look at my credit reference file because I had already told him I had judgements based on a previous failed business. I did not lie; I did not beg; I did not coerce him; but when one has aspirations and hopes one is easily persuaded and I was indeed persuaded. Not once, but twice. (True to form, the bank takes away the umbrella when it's raining.)

 

Legally, one still owes the money, but the argument is that any responsible lender wouldn't have loaned money a second time round because of the past history. Indeed I am not arguing that I do not owe the money, I am arguing that the bank should be realistic and reduce the indebtedness because of its own complicity in the first instance.

 

Add to that, the keen interest with which the OFT and indeed the 'APPG (All Party Parliamentary Group) Against Financial Exploitation' are viewing the issue of Irresponsible Lending and the thot plickens. (I believe the OFT is issuing new guidance on the matter shortly.)

 

Those are just my views; I may be completely out to lunch from a legal standpoint, but I think there's enough grey area in the above to suggest the banks have to take responsibility for much of the debt their own managers create by being too damned cavalier with other people's lives and finances. But what do they care!? They sit in their comfortable salaried positions while their systems screw everybody on this forum.

 

Regards

JFA

[la2006]

i WAS UNEMPLOYED AND GOT A 8000 LOAN FOR TRAINING DOES THIS COUNT AS irresponisble leNDING AS I'M STILL UNEMPLOYED AFTER THE TRAINING.

[gizmo111]

Not sure what you whole story is, but being unemployed after training would not be irresponsible lending. For lending to be considered irresponsible would be for example if you were offered a loan that the lender knew you could not afford, not that it's purpose failed.

EG if you take a car loan and then write the car off with no insurance, you are still responsible for the debt even though you dod not have the car.

Please start a new thread.

[Soo43]

i seem to think there is something in the banking code guidelines - will have a look later or tomorrow - we were encouraged into similar position - we had a loan with lloyds and lots of over debtors several years ago - we went to the bank for help and a review and they gave both myself and my husband a £25.000 loan each, plus a credit card with £15000 limit each and NEVER made us pay off the other creditors - now we are in worse debt due to their so called 'help'!!!!

[d77]

Advice, please?

This is going to sound like the intro to an x-factor audition, get your violins ready...

2 years of Prozac-fog ended last November, and I am now lucid, and really quite angry. Feel free to slap me down if I’m just whinging.

The Prozac episode followed a very messy repossession and subsequent breakdown. To be honest, if I hadn’t been so blinkered about pre-existing medical conditions and PPI, the Prozac would have happened much sooner.

In 2002, Abbey National reached the end of their tether with our sporadic mortgage payments (Husband came out of work, I was working part time...) they went for repossession over arrears of £800. Fair play to them.

In stepped the saviours that are Capstone/SPML, and confirmed a remortgage to cover the loan, arrears, court costs etc. Seemed a great idea at the time, hindsight’s a wonderful thing. The honeymoon period was great, the monthly payments were only slightly higher than the Abbey ones (the ones we couldn’t maintain). Honeymoon over, and the introductory rate bounced up, the payments rose from something in the region of £200 to over £400 per month (I don’t have the exact figures, this was pre-prozac, there’s a good chance that the paperwork is stuffed down the side of a sofa somewhere.)

LloydsTSB were ever so good, there was a little button on the internet banking screen that said ‘increase overdraft’, so a cycle began of us missing a monthly payment or two, getting a nasty letter from SPML, and increasing the overdraft, paying off the arrears, and starting all over again. I got a bit fed up of forever being in overdraft, and asked Lloyds for a loan to straighten everything up. Now, we didn’t fit the lending criteria for Lloyds....but, Black Horse ‘our sister company’ were happy to accept us. I think this is when it really started to go pear shaped.

The first loan with Black Horse was ‘only’ about £3000, and things ran smoothly for a while, we were on the edge of our income, so every time we had a vet bill, a domestic appliance die on us, or any other unexpected expense, we were back in the overdraft. We were both working, so Black Horse had no issues with increasing the loan when we got sick of the overdraft fees.

We ended up with an overdraft of £7500 before Lloyds asked what was going on. I was very clear with them that we were struggling to keep up with our outgoings, and they converted the overdraft to a special agreement of a separate loan, £75 a month, which we managed to pay every month because the due date was the same day as my wages. Over this period we had also been increasing the Black Horse loan, as SPML really liked sending out court claims for possession. I was also very clear with Black Horse as to the purpose for the extensions on the loan, I recall them actually speaking to SPML and coming to an agreement that SPML would agree to the loan being secured against the property, as long as their arrears were cleared first, before any other debt was repaid.

There was another instance where a family member paid off the arrears on the mortgage pending a further advance from Black Horse being transferred, there was full three way discussion between SPML, Black Horse and the family member at this point.

The house was repossessed in November 2008. I was ‘out of it’ to such an extent that I had just assumed that I would be able to ‘sort it out’ again, as had happened over the past 5 years or so.

Looking back, it might have been less stressful for everyone involved if Lloyds/Black Horse/SPML had not colluded and allowed us to build up the debts to such unmanageable levels. It seems in bad taste to say so, but if the repossession had taken place earlier, rather than Lloyds allowing further increases on the overdraft, Black Horse allowing further advances on the secured loan when the credit files showed that this was an on-going pattern, and SPML accepting several 11th hour payments, many people would be much healthier and happier today.

My question is, do I have a case for irresponsible lending? Irresponsible borrowing, certainly, I hold my hands up to that. We knew every time that we extended our borrowing that it was not a solution, only a stop-gap, but felt that mainstream lenders would reject us on the basis of our credit history.

The current situation:

Black Horse debt £29000- in default for 18mths, with no legal action to date.

SPML (sold the house under-value) £3000 owed due to mortgage shortfall, instalments agreed with Scotcall, but defaulted October 2010.

Lloyds closed the account January 2011, £5500 outstanding on the loan, £866 on the overdraft (£3600 at the time of the repossession) First solicitor’s letter received last week, demand for £266 overdraft overlimit.

[justiceforall]

This topic was closed on 09 March 2019.

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