guarantor for a glo loan but on a DAS scheme

[mariadavidz]

My friend stupidly went as a guarantoor for another friend for a glo loan and it was supposed to be repaid in full the next month as the friend promised the money in the bank would be realeased to him and he would then pay the loan off in full.

As you have probably guessed the friends money in the bank was non existant, the friend then defaulted and the guarantor who is on a DAS (like myself) didn't know he couldn't be a guarantor until he spoke to his advisor who has now told him if Glo take him to court the Accountants in bankruptcy will make him bankrupt and his home is at risk.

He is totally devastated, i feel so sorry for him as i didn't know either that you couldn't be a guarantor but shouldn't this has showed up on the credit checks which their webiste says 'after they have carried out check' glo would get back to them.

He has spoken to the police about the lies told by the friend but they say it is a civil matter and he has no money to pursue this. The person who took out the loan as i've since found out owes money to everyone from council tax to tv licence but they have a house which the mother left to them when she died and there is no mortgage on this.

Can anyone suggest anything as i am getting really worried about my firends mental state as he has tried so hard to repay his debt and keep his house, hence the DAS arrangement and now may lose it afterall. It wouldn't help his house being sold as Glo would still not get their money as it would probably pay his own creditors.

Any advice would be fantastic

[Debt Camel]

Re: guarantor for a glo loan but on a DAS scheme

what date was the loan taken out?
how much is it for?

[mariadavidz]

Re: guarantor for a glo loan but on a DAS scheme

what date was the loan taken out?
how much is it for?

It was in August and it was for £1,500 but is now sitting at about £1,750 with the interest.

[Debt Camel]

Re: guarantor for a glo loan but on a DAS scheme

What was your friend told about this loan by Glo before he agreed to be guarantor?
The loan was supposed to be repaid in September in full?
Was he asked about his income and expenditure?
Did Glo run a credit check on him?

[mariadavidz]

Re: guarantor for a glo loan but on a DAS scheme

The only contact he had with Glo was when they phoned him and had a chat about was should E have a loan and as he like her and she appeared okay, he's known her for about 6 years he agreed
He gave E acess to him computer and she helped him complete the income and expenditure, he is 100% positive it showed his DAS payments
I don't believe they have run a credit check as he is on a DAS Scheme with the Accountants in bankruptcy

[Debt Camel]

Re: guarantor for a glo loan but on a DAS scheme

He let someone else complete his income & expenditure? oh dear. I am sorry if this sounds offensive, but is he naturally gullible, or could he have been especially vulnerable at this time because of mental health problems or some other reason?

Right, he needs to check his credit records with all three credit references agencies (links in here http://debtcamel.co.uk/best-way-to-check-credit-score/). He can start with Noddle, as that is simple and free. He is looking to see if there was a credit check run on him by Glo, it is likely to show as being from Provident Personal credit Ltd. If it shows on Noddle, he doesn't have to look any further, if it doesn't he also needs to check Experian and then Equifax. He also needs to check that his DAS is showing on his credit record.

If Glo have credit checked him, he could think about putting in a formal written complaint to Glo, saying they should not have accepted him as a guarantor because the credit check they ran would have showed that he was in a DAS, had lots of defaults etc and generally was in no position to make the loan repayment if E was unable.

If Glo didn't credit check him, he can complaint but say they failed to credit check him which would have shown his financial difficulties. FCA CONC 5.2.5 and 5.2.6 are relevant here (https://www.handbook.fca.org.uk/handbook/CONC/5/2.html). These rules don't say a credit check is essential as checks can be "proportionate", but if this loan was for £1,500 repayable a month later, then I would have expected a credit check to be made given the size of the repayment.

I am not clear from what you said if he appreciated what being a guarantor meant. It's worth talking to him about this and enquiring in detail about the phone call - if he is adamant nothing was mentioned about what a guarantor is guaranteeing, it may be worth asking Glo to for a copy of the tape recording they should still have.

If Glo reject his complaint, he can then complain to the Financial Ombudsman.

He may need help doing this. He could go to his local Citizens Advice - even though the person he speaks to there may not know a lot about this, they will be able to get help from the Expert Advice Team at the National level.