Unregulated Secured Loan Advice

[Esqki]

First of all apologies if this ends up in the wrong section. I am a desperate newbie who needs friends, so please bear with me if I've got all this post wrong!

I took out an secured loan in 2003 to consolidate unsecured debts. These unsecured debts were on a limited time frame with another bank. My secured loan is with the same provider who has my mortgage. I was financially illiterate at the time much to my ongoing shame and did not understand what it was all about and the differences between regulated and unregulated, secured and unsecured etc. I just believed the face to face selIer. I was on a two year fixed term employment contract at the time. I am really, really ashamed and angry with myself that I was so, so stupid. I have been paying the loan for 13 years now and have currently paid off over £31,000. I have seven more years left to go according to the bank but as I wasn't sent a copy of the agreement I am not totally sure but only have their word. I am not in arrears with the loan as I have been paying the loan off despite being ill and on a very small income. The loan has always taken priority. However, my doctor has now said that I can no longer go on without eating, heating etc as my health condition has worsened.

I have recently tried to speak to the bank at all levels but they have refused to re-review a complaint I put in, in 2014 about the loan being mis-sold, which they rejected saying all procedures were correctly followed. After much argument, they are now allowing the complaint to go to the FOS. I did a SAR in 2013 and have recently reviewed the paperwork but for the loan there are only lists of transactions, no loan agreement. From the SAR I can see that the bank reviewed the loan position in 2009 informally and concluded all the right processes had been followed and met but that the long term outcome was "inappropriate" or in such words. The bank did not inform me of this "outcome" at the time.

I have learnt today as this is an unregulated loan, I have no right to see the agreement and it is not covered by the SAR. The bank does have a copy of it (according to the 2009 investigation) but there are no records of notes of the selling according to the SAR. I have asked for evidence on which the bank based their decision but they have refused to give me any. I spoke to the Executive Complaints people today who basically told me very jubilantly that they were totally right and I should take out another loan with another bank or get my house repossessed. The bank have admitted that i do not have enough money left each month to even meet my basic needs.

I am currently asking for a second SAR to see if I can get hold of the loan agreement. I have asked for a final settlement figure but the bank has refused to give me one. By my estimation, I think it will be £45,000 but am not sure. The original loan was for £25,000 and £125 administration costs. I was not told at the time that it was unregulated nor that secured was written against the house. I did not have time to get independent advice as I was travelling out of the country a few days afterwards, nor was I told to get independent financial advice because of the risks involved, nor was I given any cooling off period I had only just bought my first house as a first time buyer seven months before and although my age was older, I was totally new to money matters.

I have to write the FOS complaint and I am terrified of how to put my case. I have been very, very stupid, and I acknowledge that, but I really want to learn now and to put things right so that I can restart my life. Please could somebody advise me where to start to put together my case and my argument. Thank you again for reading this, and my apologies if it ends up in the wrong section.

[nemesis45]

Re: Unregulated Secured Loan Advice

Hi Welcome to LB,
I would be happy to help you with your submission to the Ombudsman but we will need to unravel the details as much as possible so a few questions.

1. Who is the loan with ?
2. When exactly did you take this loan?
3. Is the sum mentioned £25K correct?
4. 13 years of payments at what rate per month?
5. Have you ever been told what the interest rate is?
6. Do you get statements on a regular basis?
7. Were you provided with a copy of the agreement at the inception of the loan?
8. The points you have raised with the lender, were these raised as a Formal Complaint and if so did the lender give a final response?

My immediate first thought is that this is an unfair contract

If you can answer the above we can make a start on the submission to FOS.

nem

[Esqki]

Re: Unregulated Secured Loan Advice

Dear Nem. Thank you so much for your response. It was a ray of sunshine in what is turning out to be a very dark journey. Apologies for the slow response, I have been checking paperwork. Answers as requested:

1. Halifax
2. 16/4/2003
3. The actual loan itself was £25,000 but they have added an additional £125 as administration fees. This breakdown has been shown by the SAR loan activity papers. On actual loan statement they state loan is for £25,125 but money received was £25,000.
4. The rate is variable. I can give the full breakdown of the monthly interest rates as given by SAR documents if needed but to save space in this instance, the highest it went to was 0.628% per month until it finally came down to 0.291%. The highest interest rates were during the early days of the loan at 2003-2008. The interest rate began to drop post 2008 and has remained stable since end of 2009 at 0.291% monthly at variable rate.
5. Not in the early days. I only began to receive statements from 2009 and the interest rate is on the statements. The only thing I was told at the time of taking out the loan was that it would be cheaper for me. From SAR have complaint logged about the loan in 2009 as part of a complaint about the PPI on the loan. Clearly stated to them that 2009 was the first year that I had received any form of statement about the loan. Told them that I had never seen the terms and conditions of the loan and didn't realise it was secured against my house. In a contact note (as seen from SAR) about this complaint, they state that they had a copy of loan agreement form in 24/6/2009 but this copy is not in the SAR documentation. They also confirmed no notes of sale were available. in the SAR note they state the repayment loan 'was arranged for £25,125 over a repayment period of 19 years. This suggests that she wanted to keep costs as low as possible. There is no evidence of any significant savings at the time of sale'.
6. Annual statements only started to be sent in 2009. No statements prior to then. SAR does not contain copies of annual statements, only transaction activity.
7. No. Nothing was given to me, nor sent through the post. The bank disputes this saying that I would have 'received the necessary information and documentation required under the sales process and regulation'. They also argue that offer documents would have confirmed it was secured with term and amount of loan. They are also arguing that as it was unregulated, no advice would have been given, only a recommendation and it would have been up to me how to proceed. No copy of the agreement was included in the SAR.
8. I started raising the matter in 2009 but did not realise that there was a "informal'/"formal" complaint route. After the matter being ignored post 2009, I formally raised a complaint late 2013. A final response was issued in January 2014, however chronic illness prevented me from taking it further. I asked for the decision to be re-reviewed at the start of this month. They refused to re-review but have given permission for the matter to examined by the ombudsman (I have a voice recording confirming this). They are sending a copy of the 2014 final response over the next two weeks. I cannot find a copy of the letter but as it coincided with my illness, it may be in a box somewhere, I'm not sure as I can't remember. The final response as I take it from the recent fractitious conversations with them is along the lines of 2009, that it was an unregulated product, it was affordable, no advice was given, I was able to make an informed choice at point of sale and all the correct paperwork was duly sent out. This was not the situation. The complaint was rejected on the basis that the loan was not mis-sold.

I am so sorry for my ignorance but I have never heard of an unfair contract just as I didn't even realise that there were regulated and unregulated loans. I feel so much out of my depth here, that it is frightening.

Thank you again for all your time and help Nem. I am willing to put in all the work and legwork to try and get my life on track. Thank you again.

Esqki

[nemesis45]

Re: Unregulated Secured Loan Advice

Dear Nem. Thank you so much for your response. It was a ray of sunshine in what is turning out to be a very dark journey. Apologies for the slow response, I have been checking paperwork. Answers as requested:

1. Halifax
2. 16/4/2003
3. The actual loan itself was £25,000 but they have added an additional £125 as administration fees. This breakdown has been shown by the SAR loan activity papers. On actual loan statement they state loan is for £25,125 but money received was £25,000.
4. The rate is variable. I can give the full breakdown of the monthly interest rates as given by SAR documents if needed but to save space in this instance, the highest it went to was 0.628% per month until it finally came down to 0.291%. The highest interest rates were during the early days of the loan at 2003-2008. The interest rate began to drop post 2008 and has remained stable since end of 2009 at 0.291% monthly at variable rate.
5. Not in the early days. I only began to receive statements from 2009 and the interest rate is on the statements. The only thing I was told at the time of taking out the loan was that it would be cheaper for me. From SAR have complaint logged about the loan in 2009 as part of a complaint about the PPI on the loan. Clearly stated to them that 2009 was the first year that I had received any form of statement about the loan. Told them that I had never seen the terms and conditions of the loan and didn't realise it was secured against my house. In a contact note (as seen from SAR) about this complaint, they state that they had a copy of loan agreement form in 24/6/2009 but this copy is not in the SAR documentation. They also confirmed no notes of sale were available. in the SAR note they state the repayment loan 'was arranged for £25,125 over a repayment period of 19 years. This suggests that she wanted to keep costs as low as possible. There is no evidence of any significant savings at the time of sale'.
6. Annual statements only started to be sent in 2009. No statements prior to then. SAR does not contain copies of annual statements, only transaction activity.
7. No. Nothing was given to me, nor sent through the post. The bank disputes this saying that I would have 'received the necessary information and documentation required under the sales process and regulation'. They also argue that offer documents would have confirmed it was secured with term and amount of loan. They are also arguing that as it was unregulated, no advice would have been given, only a recommendation and it would have been up to me how to proceed. No copy of the agreement was included in the SAR.
8. I started raising the matter in 2009 but did not realise that there was a "informal'/"formal" complaint route. After the matter being ignored post 2009, I formally raised a complaint late 2013. A final response was issued in January 2014, however chronic illness prevented me from taking it further. I asked for the decision to be re-reviewed at the start of this month. They refused to re-review but have given permission for the matter to examined by the ombudsman (I have a voice recording confirming this). They are sending a copy of the 2014 final response over the next two weeks. I cannot find a copy of the letter but as it coincided with my illness, it may be in a box somewhere, I'm not sure as I can't remember. The final response as I take it from the recent fractitious conversations with them is along the lines of 2009, that it was an unregulated product, it was affordable, no advice was given, I was able to make an informed choice at point of sale and all the correct paperwork was duly sent out. This was not the situation. The complaint was rejected on the basis that the loan was not mis-sold.

I am so sorry for my ignorance but I have never heard of an unfair contract just as I didn't even realise that there were regulated and unregulated loans. I feel so much out of my depth here, that it is frightening.

Thank you again for all your time and help Nem. I am willing to put in all the work and legwork to try and get my life on track. Thank you again.

Esqki

OK ESqki.

I've a few things to do then I'll read through everything, put a draft together on paper and post here later.

nem

[Esqki]

Re: Unregulated Secured Loan Advice

Dear Nem. Thank you so much. Let me know if more information is needed, or what else I need me to do as and when you get time. Thank you for the support.

Esqki

[Esqki]

Re: Unregulated Secured Loan Advice

Dear Nem

The final response letter from the bank finally arrived on Friday. The bank has given me permission to take to ombudsman in the letter.

The final response is along the lines as mentioned above plus they have also argued that I brought the complaint to them out of time back in 2013, which was another reason for rejection of my complaint. However, I am not sure that that stands as they were investigating the complaint in 2009 but never ever got back to with regards to the results of their investigation nor that I had the right to appeal to the ombudsman.

What do I now need to do with regard to the submission to the ombudsman? It's all feeling overwhelming. Thank you again in advance.

Esqki

[Kati]

Re: Unregulated Secured Loan Advice

Dear Nem

The final response letter from the bank finally arrived on Friday. The bank has given me permission to take to ombudsman in the letter.

The final response is along the lines as mentioned above plus they have also argued that I brought the complaint to them out of time back in 2013, which was another reason for rejection of my complaint. However, I am not sure that that stands as they were investigating the complaint in 2009 but never ever got back to with regards to the results of their investigation nor that I had the right to appeal to the ombudsman.

What do I now need to do with regard to the submission to the ombudsman? It's all feeling overwhelming. Thank you again in advance.

Esqki

:bump2: for [MENTION=55034]nemesis45[/MENTION] xx

[Fred]

Re: Unregulated Secured Loan Advice

The FOS will want to know what you think this business has done wrong & also what you think they should do to correct any alleged wrongdoings.

It would help if you could (without disclosing personal data) let us know what the business has said or written to you in response.

What are your main concerns ?

[nemesis45]

Re: Unregulated Secured Loan Advice

:bump2: for @nemesis45 xx

Good morning.
Apologies for later response!!

Esqki, It's worth going forward with this!
You ill need give FOS chapter and verse from the beginning of this saga to the present day.
The failure to respond correctly in 2009 is I think certainly in your favour.
It will be necessary to supply copies of all/any documents you have that support your complaint.
You have most of the data immediately to hand, it's a question now of make a clear, chronological
" record" of the loan and all that has happened.
In my opinion this is classic example of deadlock between the parties and FOS will be the final arbiter.

nem

[Esqki]

Re: Unregulated Secured Loan Advice

Dear Nem

Thank you so much fro getting back to me and for the encouragement, really appreciate it.

You mentioned unfair contracts before, is that route that I should go down? I complained about mis-selling for the reasons mentioned above and also because I have never heard of unfair contracts. I have no other documents other than those given in the SAR. I do not have a copy of the original contract and that was not in the SAR. Apparently because it is an unregulated loan I do not have the right to have a copy. You mentioned giving chapter and verse, which I do do above by giving a description of what happened but am not sure how to point out to the ombudsman where I think things are wrong and for a lot of this I don't have documentation as such, for example the high pressure selling at point of sale, etc.

I am in panic mode with this because it is so daunting, so need to almost work my way through it like a colouring book/paint by numbers. So, would the first step be to put down the chronological order on paper, that will be most of the stuff above as a start to the draft? What should I then do as a second step to the draft? I am sorry if the answer is staring me in the face in your post but I can't really see the wood for the trees. I really don't understand how to put my case to the FOS, as I do know that they are mainly lawyers and they will be looking at my submission from that point. Thank you for getting back in touch, again really appreciate it.

Esqki

[Esqki]

Re: Unregulated Secured Loan Advice

Dear Fred

Thank you for your mail. The final 2015 response letter (based on 2014 response) can be summarised as:

1. It had been investigated in 2009/2014 and they will not review it.
2.Secured loan and mortgage should remain priority above all else (which it has been, have never missed a payment nor even been late with a payment even though I have very little left for basics such as eating or heating. Their financial hardship team agreed that I didn't even have the money to cover basic needs after paying loan and mortgage. The complaints people have said that eating and heating is non priority. I am not extravagant and have got it down to one meal a day but the doctor has insisted this is no longer acceptable).
3. They refuse to consider any other options re the loan despite financial hardship.
4. They told me over the phone to get another loan to pay this off or to stop paying and they will then consider what to do next. I challenged them on this because I feel I was being misled, especially as non payment would lead to repossession action. I am too ill to cope with the stress of dealing with repossession of my home. In the final response letter they have said that if I do fall into arrears, "then they will do all they can to support me". They are also clouding the water by constantly referring to my mortgage and secured loan together in the letter. I am not in arrears with my mortgage and have never complained about the mortgage. Again they have said that if I fall in arrears with my mortgage, they will then "do everything to support me".

The final decision letter of 2014 gave their reasons as:
1. Passed credit score at time and they are confident that they followed the lending code back at the time of the loan point of sale.
2. Shouldn't have signed agreement at time if thought not suitable.
3. Accepted terms and conditions of loan when signed for it and if I thought loan was going to have negative impact then shouldn't have signed for it or should have got back to them after signing to cancel.
4. Am bound by agreement cause signed it because of full age and understanding. This applies whether read agreement or not or whether understood it or not because of the signature. By signing it agreed to terms and conditions, didn't need to read it or understand it.
5.Did not raise concerns within six years of it happening, therefore is time barred ( this ignored 2009 complaint).
6. Agreed to the loan, and made use of the money, therefore benefited from it.

Thanks again for getting back to me.

Esqki

[Esqki]

Re: Unregulated Secured Loan Advice

Dear Fred

Thank you for your mail. The final 2015 response letter (based on 2014 response) can be summarised as:

1. It had been investigated in 2009/2014 and they will not review it.
2.Secured loan and mortgage should remain priority above all else (which it has been, have never missed a payment nor even been late with a payment even though I have very little left for basics such as eating or heating. Their financial hardship team agreed that I didn't even have the money to cover basic needs after paying loan and mortgage. The complaints people have said that eating and heating is non priority. I am not extravagant and have got it down to one meal a day but the doctor has insisted this is no longer acceptable).
3. They refuse to consider any other options re the loan despite financial hardship.
4. They told me over the phone to get another loan to pay this off or to stop paying and they will then consider what to do next. I challenged them on this because I feel I was being misled, especially as non payment would lead to repossession action. I am too ill to cope with the stress of dealing with repossession of my home. In the final response letter they have said that if I do fall into arrears, "then they will do all they can to support me". They are also clouding the water by constantly referring to my mortgage and secured loan together in the letter. I am not in arrears with my mortgage and have never complained about the mortgage. Again they have said that if I fall in arrears with my mortgage, they will then "do everything to support me".

The final decision letter of 2014 gave their reasons as:
1. Passed credit score at time and they are confident that they followed the lending code back at the time of the loan point of sale.
2. Shouldn't have signed agreement at time if thought not suitable.
3. Accepted terms and conditions of loan when signed for it and if I thought loan was going to have negative impact then shouldn't have signed for it or should have got back to them after signing to cancel.
4. Am bound by agreement cause signed it because of full age and understanding. This applies whether read agreement or not or whether understood it or not because of the signature. By signing it agreed to terms and conditions, didn't need to read it or understand it.
5.Did not raise concerns within six years of it happening, therefore is time barred ( this ignored 2009 complaint).
6. Agreed to the loan, and made use of the money, therefore benefited from it.

Thanks again for getting back to me.

Esqki

- - - Updated - - -

Ooops really sorry, posted reply twice. Many apologies for mistake.

E

[Fred]

Re: Unregulated Secured Loan Advice

Normally even in the case of an "unregulated secured loan" you would have a copy of the agreement & legal charge signed by yourself & witnessed by an-other.

This also being a "second charge" along side your first with the same provider & it is they who recommended this ?

I take it your second loan interest is higher than your first mortgage & if so what is the rate now, has it ever been increased since you complained & if so did you get notice ?

I do not carry the view that the FOS need/s a full investigative review from you moreover take the it that it is the FOS (who are the professionals) just need a brief & concise statement from you on what you think is wrong.

If you can be just a little more specific in your complaint then, I would feel a little more informed on what perhaps should be put to the FOS.

Please do not feel intimidated as the FOS are neutral & are fully aware of the varying capabilities in public complaints, it is their remit to act sympathetically to your complaint providing it meets with the basic acceptance criteria.

I hope what I am writing makes sense & would love to see you get this matter progressed should you wish. :tinysmile_twink_t2:

[Bazza]

Re: Unregulated Secured Loan Advice

Normally even in the case of an "unregulated secured loan" you would have a copy of the agreement & legal charge signed by yourself & witnessed by an-other.

This also being a "second charge" along side your first with the same provider & it is they who recommended this ?

I take it your second loan interest is higher than your first mortgage & if so what is the rate now, has it ever been increased since you complained & if so did you get notice ?

I do not carry the view that the FOS need/s a full investigative review from you moreover take the it that it is the FOS (who are the professionals) just need a brief & concise statement from you on what you think is wrong.

If you can be just a little more specific in your complaint then, I would feel a little more informed on what perhaps should be put to the FOS.

Please do not feel intimidated as the FOS are neutral & are fully aware of the varying capabilities in public complaints, it is their remit to act sympathetically to your complaint providing it meets with the basic acceptance criteria.

I hope what I am writing makes sense & would love to see you get this matter progressed should you wish. :tinysmile_twink_t2:

Hi Fred sorry to butt in but further to your comments, would it be a combined form regarding agreement and legal charge signed and witnessed ? Or should it be two separate documents ?

Also would they or any other's require to notify the original lender of the charge ?

Thanks for your time.

[Fred]

Re: Unregulated Secured Loan Advice

Bazza,

Never heard of a combined first & second charge mortgage ? Perhaps I am miss-reading what is being said but I do not see how two completely differing loans can be combined ?