Irresponsible lending? Mums credit cards

[Orangefantastic]

Hi,

Ive just discovered that mum is in a bit of a mess! She’s 75, widowed 2 years ago and for the first time is having to manage her finances. ( dad always did it)

in Sep 2023 she applied for a credit card with a well known high street bank. She says that when she applied there was an error message and she assumed that it hadn’t worked. She applied again immediately and was accepted for £4K limit with an introductory 0% period. A week later 2 cards arrived. Same product etc. it appears that both applications went through and she basically ended up with 2 identical cards, each except the same credit limit. There is a one digit difference between her customer numbers. I can only assume that this was a system error and that only one card should have been issued.

fast forward to now and mum has a balance on each card of almost 4K. She’s panicking. The interest free period is about to expire and her payments will rocket to over £200 per month.

now I’m all for personal responsibility, and I do wish that mum has spoken to me earlier, however she’s an elderly vulnerable woman and I think that issuing 2 cards was irresponsible, even if it was in error.

I think that we need to complain. I’m not expecting the debt to be written off- she’s spent the money after all, however I think it’s reasonable to ask them to reduce it remove the interest if the card was issued in error. Do you think this is an example of irresponsible lending?

Is there any way the bank would have known she’s was vulnerable / frail? In this comparison of the PP’s sister and you’d mum, do they look any different on paper (aside from your mum not working)?

obviously the 2 card thing is an error and has doubled the problem so you might get some traction on that front I guess..

@LittleBearPad

🤦🏻‍♀️ Taking out a personal loan to pay off credit card debt is the last thing anyone in this sort of situation should do. It's unnecessary and counter productive.

The bank is obviously at fault here. Presumably caused by a computer glitch issuing 2 cards but that's still their error and the OP will get sound advice from a proper independent debt advice service.

So she’s only asked for help now that the cards are maxed out and she knows she’s coming to the end of the 0%? That would very much suggests that she knows what she was doing.

Whether them giving her the cards was right or not, she has chosen to spend on them.

Bear in mind, if you don’t have POA, you may well find they refuse to speak to you at all. Get together all the application details, letters, statements and evidence of repayments so you have the full timeline and then try to arrange a meeting F2F with the bank and accompany your DM to it.

Your best bet is to speak to the bank - they made an error etc, then rather than trying to get it written off, try to combine the accounts with a longer repayment period. They might extend the 0%. Else it might be worth looking if she can do a balance transfer to another card with a 0% rate. Then when it arrives, cut it up and set up an affordable monthly repayment for her. Also second speaking to Stepchange if the above isn’t an option.

@Orangefantastic but you mum has obviously not made any payments to the cc company! looks like she was just spend, spend, spend! being older and widowed does not make a person vulnerable!! you keep saying she is vulnerable! I personally, do not see being given a credit card being called "lending"??

Not if the personal loan interest rate is considerably lower than the credit card interest rate. If the bank doesn’t agree to freeze the interest the £8k debt is going to grow quickly.

And the bank isn’t responsible for spending £8k. Two cards were used and maxed out.

You can try Christiand against poverty for help. They were really helpful when I was in debt, having interest frozen and repayments lowered.

My mum was still working part time at 76 and running two properties,

What she would have done at that age is rung up the provider, cancelled one of the cards and not run up debt.

Your mum’s age has nothing to do with it.

She should have sent one card back.to.the bank. Instead she used both cards. Now she needs to pay back the debt.

She has never missed a single payment. I’m not sure how you made that assumption??

They wouldn’t have known and that’s why they should have carried more due diligence for a duplicated application

It doesn't appear she had any difficulty understanding she had 2 cards - presumably when 1 was maxed she spent on the other and was receiving statements for both with different balances? I think its a stretch to say she's vulnerable solely due to age yes it can be a contributing factor but she was capable of applying independently (can obv use computer etc) and then spending the money

But you’re comparing my mum to your mum and they are totally different people!!

I was widowed at 45 and it does make you feel fragile & I'm the one who ran everything in this house and was self employed as well so it’s not like I was used to a life of being looked after. It can take a long time to recover and be able to cope again when you’ve lost your partner.

Ive got patients at work who have been classified as frail in their late 50’s but when you meet them you can see why.

It’s worth a try if your mum is older, widowed and not used to handling finances. There’s a reason why they say don’t make any big decisions for the first year.

So putting aside who’s responsible etc….. do people really think that a mainstream bank would have approved two identical applications on the same day? Would there not have been systems in place to ensure that this sort of thing is flagged and questioned?

No I don’t think they should have. But also, banks continue to surprise me how few controls over some of this stuff there are.

Why do you think she is vulnerable OP? How could the company have known?
The credit card company’s computer couldn’t have known she was bereaved or she didn’t have much experience of banking. Or that her age might be a factor (doubt they can assume vulnerability based solely on age, it’s discriminatory)

Can she transfer the balances to another 0% deal so she doesn't have to pay interest?

Otherwise she's probably not going to be able to afford the repayments when interest becomes chargeable and she'll probably need specialist debt advice as she'll be at risk of falling into 'persistent debt' and need to go into debt management.

But either way she must stop using the cards. She must know she's spent money that she didn't have and now it needs to be paid back.

Well no. If both accounts were being actively used and managed it likely wouldn't have flagged up.

Your mum clearly knew she was using both accounts so I'm not sure why you're trying to maintain it's a failing on behalf of the bank...

Financial vulnerability. The system knew her age and income. It should not have granted double the agreed limit.

It also should have recognised a potential digital vulnerability and not have granted two consecutive applications.

FCA Consumer Duty regulation built on the vulnerable customers guidance significantly. It might surprise you how far the regulations go in terms of protecting customers and monitoring whether good outcomes are being achieved. The OP should certainly go down the financial vulnerability route and ask how the bank could have reasonably thought a good outcome would be achieved when granting double the credit limit usually allowed for someone with the customers disclosed income.

People can't judge your mum's vulnerability on here. Go somewhere that can offer debt support such as cab, Christians against poverty or Community Money Advice where they have done a course to be able to give debt advice. They can help your mum look.at the options available to her. If you get support early it can help before things escalate x

You can try to go down the route of irresponsible lending, but more pressing would be swapping the cards to 0% balance cards, even if she can only get one of them, and start to pay it down. If she's vulnerable, it's time to set up POA and in the interim, you need to assist her with her financial management.

I work for a credit card company and we do not allow a customer to have 2 of the same product, the second application would be declined.

I'm not sure if it would fall under irresponsible lending but it's worth raising a complaint using key words such as distress and if your mum is vulnerable include that word too.

Even if they don't write the debt off, they may at the least waiver the interest if not on both on one of them.

If your mum is struggling financially and if you don't get anywhere with the bank, StepChange are a charitable organisation who can assist with payments and having interest frozen.

Nothing's going to be flagged if at least the minimum payment is made.

I have two credit cards with Santander. One mainly for spending abroad and another for Stoozing (0% deal offset by high interest savings account so I profit by about £500 a year). So obviously its not unusual to have more than one card.

If banks put measures in place to protect people from irresponsible borrowing either because people want free spending money or because they don't understand what they are doing then people would complain that banks are too strict and treating people like children.

They can also look at whether the lending did not take account of your mum's vulnerability. This may include getting evidence from a gp to evidence her vulnerability and look at her having been lent more than approved for.

Why do you keep making this point? Are you saying that your mum thought she only had one account and is somehow in a worse financial position because she inadvertently had two?

Presumably she has been spending on both cards or she wouldn't have a balance on both?

So what's your point?