Any tips on getting a loan back from someone?

[LoisLane23]

My close relative has been extensively naive (no need to highlight this) and lent a large amount of money and the last of their savings to an old colleague that has worked their way back in to her life. They used to own a business and were a supplier to her business so an element of trust there. Obv it's now been a few months and there's hotch potch excuses why it's not been returned. What are her Options legally? Shouldn't she report it? Inform her bank? She is beside herself and verging on nothing to live for more, clearly this person is a con artist and can't believe his luck, not looking for judgement but practical advice on her next move. Thanks

To add, it's come from her bank account so there's a paper trail and hundreds of 'coercive' messages with screen shots of his account and pledges of returning it.

Threaten small claims court?

Has your friend got it all in writing, the person agreeing to pay the money back, then depending on the amount, needs to see a Solicitor to take further action or take the person to the small claims court.

All in writing yes. I am
Trying to toss up cost of small claims court vs value of what they have lost. Any idea?

Small claims court all the way, very easy and costs can be claimed. How much was the sum lent?

Thanks all. It was £5500. It's a huge amount of money to this person. It's a person to person loan not business, they just know each other from a previous business context some years ago, I think that's why my relative felt it was a genuine ask. Its evident it's not now so just trying to explore options with them. I noted a statutory demand on the gov website which looks worth while too!

Sending in Bailiffs without a Court Order is illegal.

I'm not sure he'd welcome you promoting his illegal business on here.

@Doggymummar, do fuck off. What you're suggesting is not only unnecessary, but will also inevitably cost the OP money as a percentage of what they are awarded. Reported.

Small claims court is very easy to use and also very effective. If he has so far failed to pay the money back despite asking, then go straight to court proceedings. You can't reason with people like that.

No need to be so rude. I simply used the incorrect term they are a debt collection agency. Fully licensed, no fees to the person owed the money.

Thank you all, the sentiments are quite right, no reasonable person does this to another individual who obviously cannot afford to lose their savings. We've sent a statutory demand letter and started the small claims process, fingers crossed.

I don’t think you can use a solicitor for small claims. Good luck with it.

Small claims court the way to go. Well done and I hope they get their money back.

The problem with small claims is a large majority never repay the debt even if they are required too....it is a civil matter not a criminal one. Most end up paying legal fees they will never get back.

So where is the debt collector getting their fee from if not from the person engaging their services? They can't charge the person who holds the debt as they didn't hire them. That would be called extortion and not legal. They must take it out of the retrieved money so that essentially means the person owed money pays a fee.

@powerrangers applying the fee to the person who she lent the money to I assume

Agree. The small claims track is great for businesses that are likely to follow a court’s instructions but unlikely to work in this scenario.

Applying a fee to someone doesn't mean the recipient has any obligation to pay it, and that payment would never be something the debt collector could take to small claims. No legal basis whatsoever. It would have to be deducted from the person who they assist (and who gave them the original instruction to act on their behalf) in retrieving their owed money.

We used the small claims to get a personal debt back, you can use court bailiffs if you win and they don’t pay.

According to their website, they levy a late payment fee via an invoice, which is presumably lawful if within the terms of the contractual arrangements with the debtor. They only charge the client a fee if they are not able to levy a late payment charge.

25% of people awarded a payment don’t get all the money, and 6% get nothing at all (pre COVID figures, so I would suspect worse now, as the courts are in meltdown). The risk for the OP’s relative would be that, even if they get some money, it’s less than the outlay.