Irresponsible lending

[croc]

Re: Irresponsible lending

Thank you all for your input. I will reply to everybody individually.
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Were the loans interest free until 6 months after graduation ?

Just wondering on the Cash Isa recommendation - interest free loan invested in a cash ISA for a couple of years then the original capital repaid before interest starts becoming payable could make you a small profit in interest. But I very much doubt if the bank manager should have been lending for such a reason. Maybe why he isn't there any more. It certainly doesn't sound like you really NEEDED to borrow the money (ie it wasn't to pay student fees, digs, food, bills etc) - just it was there on a plate and the bank manager made it sound attractive ?

Did you make the first approach to the bank for the first loan ?
Did you hold your main current account with the same bank ?

I can't see it passing muster as irresponsible lending in court and getting you free of repaying the debts - but that kind of behaviour and sales practice towards lending to students (medical or otherwise) should probably be taken to the OFT/FSA.

Just to clarify. I did not approach the bank for a loan. I went and saw the person in question as I needed to open an account for our graduation committee and the loan was mentioned and sold then.
In terms of the Cash ISA...the loan was NOT interest free. I paid interest, but was told by the manager that its the lowest he's ever known it and feels as though it has no place to go but up so if i fix my interest and put it in a ISA, i would eventually make money. I did not NEED to borrow the money, i do bank mainly with Natwest, which showed that i got paid plenty from my part time job and student loans. It was there on a plate numerous times and i was young and stupid. I feel that as a student, you're a bit vulnerable, and the bank knew that i would be in a secure job (pretty much 100% guaranteed a job) and in a job that you cant default (looks really bad) but it has meant i have had to take a year out of my training and do some extra work to pay back this loan and get on top of my debt.
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FOS's view on similar circumstances (less so but similar) (can't find any case law similar as most is to do with over consolidation of loans and sod all risk scoring)

Assessment wise I suppose, I don't know, that medical students are more or less certain to be in full time employment after graduation - I'm not sure how that type of future assessment is, or should be, made. Were you also working at the time ?

I was working part time earning about £250 per month. I knew i had poor credit at the time. I tried to buy a £600 tv on finances and got rejected. I was told by the manager that they can "overrule" the credit checks.
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The maximum non law student loan is £20k which corresponds with your first post. The idea is that the person studying medicine will then go on to become a doctor and therefore earn a good salary which then means that bank can look at the long term relationship with the bank, ie relationship manager with packaged account, mortgage. credit card, investment portfolio, etc ,etc ie the whole 9 yards.
For whatever reason, the bank no longer offers this anymore.

The max then was 20k. But i kept borrowing and paying back. Paying back when i made a bit of money. I was using the money for capital to try to gain more money. Obviously i was stupid and inexperienced and we all know what happened to stocks and shares after 2007.....
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I know this is not your question right now but what about Payment Protection Insurance (PPI), was you also sold the ppi with the loan?

Just in case there is a reclaim here of being mis sold the PPI, I thought I should ask, hope you don't mind.

I declined PPI, i thought it was a waste of money!
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This case could be used I think ........to say that the Bank Manager in his wisdom should have advised Croc that it was not a proper thing to do, that these loans were not for the purpose he was asking the loans to be made for..l.....they were to assist in his education fees

Sparkie


Verity and Spindler v Lloyds Bank plc (1995) CLC 1557
A bank manager advised Verity and Spindler to buy a particular property, saying that it would be a viable project for re-development, having previously advised them to turn down another property. Verity and Spindler acted on the advice and borrowed from the bank to fund the work. The work took much longer than anticipated causing them financial loss. It was held that the bank manager had assumed the role of financial adviser and therefore also owes a duty to advise on the wisdom of the proposition. -

The bank manager knew i got my student fees paid for. He knew exactly what the loan was used for.
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This case could be used I think ........to say that the Bank Manager in his wisdom should have advised Croc that it was not a proper thing to do, that these loans were not for the purpose he was asking the loans to be made for..l.....they were to assist in his education fees

Sparkie


Verity and Spindler v Lloyds Bank plc (1995) CLC 1557
A bank manager advised Verity and Spindler to buy a particular property, saying that it would be a viable project for re-development, having previously advised them to turn down another property. Verity and Spindler acted on the advice and borrowed from the bank to fund the work. The work took much longer than anticipated causing them financial loss. It was held that the bank manager had assumed the role of financial adviser and therefore also owes a duty to advise on the wisdom of the proposition. -

The bank manager knew i got my student fees paid for . He knew exactly what the loan was used for.

[Sparkie1723]

Re: Irresponsible lending

This case could be used I think ........to say that the Bank Manager in his wisdom should have advised Croc that it was not a proper thing to do, that these loans were not for the purpose he was asking the loans to be made for..l.....they were to assist in his education fees

Sparkie


Verity and Spindler v Lloyds Bank plc (1995) CLC 1557
A bank manager advised Verity and Spindler to buy a particular property, saying that it would be a viable project for re-development, having previously advised them to turn down another property. Verity and Spindler acted on the advice and borrowed from the bank to fund the work. The work took much longer than anticipated causing them financial loss. It was held that the bank manager had assumed the role of financial adviser and therefore also owes a duty to advise on the wisdom of the proposition. -

[di30]

Re: Irresponsible lending

I know this is not your question right now but what about Payment Protection Insurance (PPI), was you also sold the ppi with the loan?

Just in case there is a reclaim here of being mis sold the PPI, I thought I should ask, hope you don't mind.

[leclerc]

Re: Irresponsible lending

Were these all seperate loans or refinancing previous loans ?

Of course the bank manager gained his points for selling the loans - leclerc is the man to ask about the natwest bonus system and how it can influence pushing unsuitable products at customers.
Amethyst, Professional Trainee Loans do not accrue points for the manager themselves because unless the branch have referred them to the Graduate Manager then the branch where the account is domiciled, ie home branch gets the points. I am sure they would have lending targets as well. Furthermore the loans can be over a maximum 10 year period.
NatWest Rates and charges
Responsible lending does go hand in hand with responsible borrowing...you do seem to be on top of the loans and they are being repaid however slowly - so I'm guessing you are just testing the water to see if there is any way to absolve yourself of the responsibility for repayment - maybe of just the interest being charged? by looking at irresponsible lending angles.


The way you do come across - and the investment in shares etc - you sound like you knew exactly what you were doing. Some of the loans though are for quite specific amounts - were there reasons at the time for borrowing those specific sums ? usually if it's loans just for spends then its round numbers - if it is for specifics (like a car - student fees - debt consolidation etc) then the amount tend to be more precise.

The maximum non law student loan is £20k which corresponds with your first post. The idea is that the person studying medicine will then go on to become a doctor and therefore earn a good salary which then means that bank can look at the long term relationship with the bank, ie relationship manager with packaged account, mortgage. credit card, investment portfolio, etc ,etc ie the whole 9 yards.
For whatever reason, the bank no longer offers this anymore.

[Amethyst]

Re: Irresponsible lending

FOS's view on similar circumstances (less so but similar) (can't find any case law similar as most is to do with over consolidation of loans and sod all risk scoring)

Assessment wise I suppose, I don't know, that medical students are more or less certain to be in full time employment after graduation - I'm not sure how that type of future assessment is, or should be, made. Were you also working at the time ?

59/2
bank accused of "irresponsible lending" when it gives a loan to a student so he can buy a motorbike

A 20-year old university student, Mr D, lived at home and worked full-time in a local supermarket during the vacations. He had a part-time job at the same supermarket during term-time.
Mr D applied successfully to his bank for a loan of £2,500, in order to buy and insure a second-hand motorbike. But as soon as he told his mother about the loan, she complained to the bank. She said its decision to lend her son the money had been "ill-judged and irresponsible" and that it had taken advantage of her son's inexperience.
Mrs D told the bank that her son had planned to go travelling for a year after he graduated. She was concerned that the loan repayments would not only prevent him from saving money for his travels, but also leave him short of cash. She also believed that, by lending him the money, the bank had actively encouraged her son to buy a powerful motorbike.
Mrs D thought the bank should write-off the loan and take the motorbike in exchange. The bank disagreed, so – with her son's knowledge and agreement – Mrs D brought the dispute to us on his behalf.
complaint rejected
It was clear that Mrs D wanted us to take a public position on the issue of lending to young people. We explained that we could not do that, as our role is simply to help resolve individual disputes.
When we looked into the details of this case, . We agreed with the bank's view that Mr D's regular employment and low outgoings meant he could easily afford the repayments.
We did not accept Mrs D's opinion that the lender had taken advantage of her son. He was an intelligent young man who clearly understood the commitment involved in a loan. Mr D had already decided to buy the motorbike before he approached the bank and the lender had no duty – or reason – to discourage him. There were no grounds on which we could fairly make the lender write-off the loan in exchange for the motorbike. We rejected the complaint.

[Amethyst]

Re: Irresponsible lending

Were the loans interest free until 6 months after graduation ?

Just wondering on the Cash Isa recommendation - interest free loan invested in a cash ISA for a couple of years then the original capital repaid before interest starts becoming payable could make you a small profit in interest. But I very much doubt if the bank manager should have been lending for such a reason. Maybe why he isn't there any more. It certainly doesn't sound like you really NEEDED to borrow the money (ie it wasn't to pay student fees, digs, food, bills etc) - just it was there on a plate and the bank manager made it sound attractive ?

Did you make the first approach to the bank for the first loan ?
Did you hold your main current account with the same bank ?

I can't see it passing muster as irresponsible lending in court and getting you free of repaying the debts - but that kind of behaviour and sales practice towards lending to students (medical or otherwise) should probably be taken to the OFT/FSA.

[croc]

Re: Irresponsible lending

Were these all seperate loans or refinancing previous loans ?

Of course the bank manager gained his points for selling the loans - leclerc is the man to ask about the natwest bonus system and how it can influence pushing unsuitable products at customers.

Responsible lending does go hand in hand with responsible borrowing...you do seem to be on top of the loans and they are being repaid however slowly - so I'm guessing you are just testing the water to see if there is any way to absolve yourself of the responsibility for repayment - maybe of just the interest being charged? by looking at irresponsible lending angles.

The way you do come across - and the investment in shares etc - you sound like you knew exactly what you were doing. Some of the loans though are for quite specific amounts - were there reasons at the time for borrowing those specific sums ? usually if it's loans just for spends then its round numbers - if it is for specifics (like a car - student fees - debt consolidation etc) then the amount tend to be more precise.

Indeed, testing the water. No doubt I can afford to pay the loans back over several years but i feel that i got trapped very early one when i was young and somewhat immature. In terms of investing. I didn't really know much at all. Infact I didn't have a clue. Bank manager indeed encouraged me to take the loan and put it in a Cash ISA....he worked numbers in a way to confuse me over the phone. Ultimately, I trusted him. The lumps comes where specific. Cars, spent some money travelling. Vegas. Infact, looking through my bank accounts. the Majority of the money was spent on simple "over spending" and a substantial on sites like William Hill.....
I no longer indulge in the latter!
What do you think??

Re: Irresponsible lending

Some of the loans though are for quite specific amounts - were there reasons at the time for borrowing those specific sums ? usually if it's loans just for spends then its round numbers - if it is for specifics (like a car - student fees - debt consolidation etc) then the amount tend to be more precise.

Unless, of course, someone borrows to settle a bar bill.

[Amethyst]

Re: Irresponsible lending

Were these all seperate loans or refinancing previous loans ?

Of course the bank manager gained his points for selling the loans - leclerc is the man to ask about the natwest bonus system and how it can influence pushing unsuitable products at customers.

Responsible lending does go hand in hand with responsible borrowing...you do seem to be on top of the loans and they are being repaid however slowly - so I'm guessing you are just testing the water to see if there is any way to absolve yourself of the responsibility for repayment - maybe of just the interest being charged? by looking at irresponsible lending angles.

The way you do come across - and the investment in shares etc - you sound like you knew exactly what you were doing. Some of the loans though are for quite specific amounts - were there reasons at the time for borrowing those specific sums ? usually if it's loans just for spends then its round numbers - if it is for specifics (like a car - student fees - debt consolidation etc) then the amount tend to be more precise.

Re: Irresponsible lending

Nb, manager had no issue with me spending the money on shares. He encouraged more borrowing, praised me for referring him other customers. It was as though he was benefiting from the more loans he sold.

He was.

[Rasper]

Re: Irresponsible lending

I would have thought that obvious enough

[croc]

Re: Irresponsible lending

What of your responsibility?

Sorry Amy, don't quite understand what you're asking.

[Amy]

Re: Irresponsible lending

What of your responsibility?

[croc]

Re: Irresponsible lending

I'm playing Devils Advocate here, The Bank would argue that when you applied for this particular designated loan and you would be considered an intelligent borrower, that you obtained the loan for a specifice designated purpose, and were well aware that these laons were for a specifice purpose...............they could argue that by using the money for the purposes you say you used the largest majority of the funds for that you are liable for a charge of deception....possibly fraud..............Just me playing Devils Advocate

Sparkie

I am not a lawyer and this is my own opinion ....not to be taken as legal advice

Point taken, thank you.

My point. I told my manager EXACTLY what the money was for. The bank says "they cannot get the manager to comment as he does not work for the company anymore".
So I have to try to prove that point using as much evidence as I can. One main point is after the first £5750 was borrowed. Within 24 hours, 80% was filtered into a "Stockbrokers" (labeled clearly on my statement). Despite this, more money was given with several transactions to the stockbroker account and "William Hill"...this was not one lump some. It was money that was given over two years. The money was always agreed and requested by a simple text or phone call by myself to the manager. I usually got the loan and signed the paperwork afterwards.
Ps I REALLY cannot get trailed for fraud!
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Nb, manager had no issue with me spending the money on shares. He encouraged more borrowing, praised me for referring him other customers. It was as though he was benefiting from the more loans he sold.
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Nb, manager had no issue with me spending the money on shares. He encouraged more borrowing, praised me for referring him other customers. It was as though he was benefiting from the more loans he sold.
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I would suggest that it is rather more irresponsible to borrow and then not to pay back.

I agree. I am paying it back. But I think its a banks job not to take advantage of young students in times of need and ignore credit checks and give them thousands based upon FUTURE earnings.
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Oh and Sparkie, I am intelligent, but when it comes to money and finances, I am very very stupid!

[Amy]

Re: Irresponsible lending

I would suggest that it is rather more irresponsible to borrow and then not to pay back.