Irresponsible lending

[Drasticdick]

Hi,

keen to get peoples views on this please.

my niece suffers terribly with anxiety and severe depression leading to periods of real despair. I think she’s probably neurodiverse but nothing diagnosed yet.

she got into a terrible financial mess last year as one company gave her 3 loans within 11 months. We complained and they agreed that loan 3 was irresponsible. They converted the Loan to 0% and refunded the interest she’d already paid.

8 weeks later the same company offered her additional credit…… it was at a time that add was struggling terribly and stupidly she accepted. A further £1300 of debt

surely this company should have not allowed this? Especially as they had just upheld her irresponsible lending complaint!!

Yes they should have made a note on her account to not approve further loans or put a block on her so to speak, especially if she's unable to keep up with repayments, however I assume she's an adult therefore she's the account holder and it's her mess to clean up, having anxiety, depression or having a ND diagnosis doesn't automatically mean you can't control your finances, she needs to manage her situation as thousands of others do, take a step back.

She’s Attempted suicide twice so I’m afraid stepping back isn’t an option

It may just be awful processes - you’d certainly think the previous complaint would put a big red flag on!

But I suppose it may depend on why the complaint for irresponsible lending was upheld. If it was too much credit in too short a period vs income I suppose it might be that 8 weeks later, she no longer hit the criteria - e.g. if the first loan had ended. I’m clutching at straws a bit there though!

I’d say shit process and you should start the complaints process again.

Might be time to involve the Financial Conduct Authority.

It's very poor of the lender to allow this to happen. It sounds as though don't have the correct checks in place. Their systems should flag any lenders who they already know are vulnerable. I imagine that the Financial Ombudsman would have a field day with this case.

It wasn't Updraft (Fairscore) by any chance, was it???

Ask for a copy of their Vulnerable Customer policy and put in a complaint. If. O joy try the ombudsman.

Wow it is updraft! How did you know that????

We’re going to speak to the money advice service today to see if they can offer any advice

You would have thought her credit score would be terrible with defaulted loans on it. Very surprising she would be approved for another loan vulnerable or not. Many people struggle to get a loan they are easily able to repay because of the slightest smear on their credit report.

I know, I just don’t get it

Look at the website debtcamel as well - very useful for people in these situations