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?

they shouldn’t have approved 2 applications but I’m just not sure it sounds like there was any way they would have known your mum was struggling? Anyone could have applied twice in error. I think you might get somewhere with the complaint about the duplicate card (presumably she should have been given 4k credit, not 8k) but if you’re saying they shouldn’t have leant her money at all, then I don’t see how a light touch automated cc approval process would have flagged your mum’s situation, unfortunately.

When I've tried to increase the credit limit on one card it often involves checking the limit on other cards.
I'd suggest first of all trying to find a card with 0% on balance transfers. This will buy her some time. Then work out a payment plan.

I'm sorry for the loss of your dad OP.
Even if she only had 1 card and it was up £4000, how did she plan to pay it off? Does she understand how credit cards work and interest rates?
You said she hasn't missed a repayment, so why is there any debt still to be paid? Has she only been paying the minimum amount back each month?
What is the actual total outstanding bill to be paid? Sorry if I've missed this.

@Orangefantastic still trying to find out how she is vulnerable??? obviously she has been overspending and not paying off the total bill but just paying the minimum which didnt touch the outstanding debt.

Not for such small credit limits, no. They are a business, they want people to spend on credit cards. But it's possible that given she received an error message, something prevented a check like that happening at the point in the process it was supposed to.

She could have called them and queried the error message at the time before repeating the application.
She could have cut one of the cards up.
She could have cancelled one of the cards/accounts herself online or by phone.

It's not unreasonable for the bank to expect someone to take one of those actions.

I thought it was things like brightouse etc ?

Or when card companies up your limit continuously when you have huge debt and making minimum payment.

She hasn't given them any reason to think she's vulnerable so they're just treating her as a normal customer. They don't know the context or that your dad died

@Orangefantastic you need to put the same post on the debt board on mse - the people there actually know about this stuff and won’t just judge your mum for Spending the money. Mn hates people who have debt.

Have you seen my replies

@Orangefantastic irresponsible lending is giving credit to a customer who cannot afford it. So I suppose the question is, based on your mums income would she have been approved for £8,000 credit.

It's unclear if your mum's circumstances fall under this so I would pose that question to them.

Computer glitch or not, if they have given her credit more than she can afford back, I would say that falls under irresponsible lending.

Having worked in underwriting, I have many a time, declined credit based on income.

Sorry if I missed it but did your mum apply for the card before or after your fathers passing?

I work in a customer service role, The product s we sale are tv packages, bb and mobile so nothing wildly expensive.our training on what is classed as a vulnerable customer includes anyone over 70, recently bereaved and being unable to handle their own finances or a change in income. From what I have read so far I would be really surprised if the bank don’t do anything to support your mother to try and clear the debt such as extending the 0% interest term or even wiping some of the debt with the mistake of 2 cards being issued.
Going forward I wonder if a conversation with mum about possibly getting a POA in place if she is struggling to manage her finances.
Good luck getting something sorted.

I'm not sure why you're blaming the bank, your mum has knowingly used the cards and has been making payments, she can continue to pay and manage her money.

The interest charges will mean that she has less to spend on her basic living costs.

As my friend's elderly mother replied, when writing bouncing cheques on her brand new bank account, "They wouldn't have let me have the chequebook if it wasn't ok for me to use it!"

It was just before dad passed. He was very ill at the time and she was starting to ‘ take the reins’ financially

This. It's definitely worth complaining on the basis of what you've written. Yes your mum could have done something but they shouldn't have issued two cards so some fault definitely lies with them.

A lot of people on MN do not understand the responsibilities placed on financial services companies.

That’s not the point. Few customers would think bank error in issuing 2 cards as an invitation to run up debt on both without having to pay it back.

Are you claiming your mum doesn’t know how credit cards work?

My take on this is that by allowing two cards, it gave an elderly vulnerable woman a false safety net. Had only card been issued, mum may have reached out for help much earlier. Instead, she used the other card. Like I’ve said, we accept that she’s spent the money and that it has to be repaid. We’d just like the interest reduced.

please have a look at the FCA (financial conduct authority)website. Your Mother would definitely meet the criteria of a vulnerable customer.

A lot of people on MN do not understand the responsibilities placed on financial services companies

This. And even fewer seem to understand what irresponsible lending may look like.

Just because op's mum spent it all - even knowingly, even if she cackled the whole time whilst spending it on gin - doesn't mean it wasn't irresponsible lending.

Issuing two identical £4k credit card accounts on the same day IS 100% an error. It just flat out shouldn't happen. And if the banks algorithm decided that the borrower could have a £4k limit - and then, in error, the bank provided £8k which was unwisely spent - well that just as well be the dictionary definition of irresponsible lending.

I would suggest trying some of the debt management organisations e.g. Step Change here. They may be able to help her get a payment plan put in place with reasonable repayment sums and reduced interest.

It’s not a safety net it’s an expensive system of credit, which needs to be paid back.

It really depends on the person.

My mum is also 76 and she is extremely weak both physically and mentally.

She uses a walker to get around. Shes had several bad falls in the last year.

She also can't figure out her banking at all, and she gets me to do it for her.

So you have PoA, but OP’s mum is running her own accounts.

I've worked in a bank before. Banks often do help vulnerable customers. Banks wont notice the automatic error until you tell them.
Tell them the card was issued in error. The bank will work with you to help her to pay it back at the best rate for her.

No I don't have PoA. That's power of attorney which is a legal document. No I don't have that.

What I do is ring my mums bank for her. I tell the bank that I'm helping my mum. They ask to speak to the account holder -my mum.

The bank goes through security questions with my mum. Then the bank asks my mum is she happy for the bank to talk to me. She says yes. Then the bank talks to me .

I also help my mum set up her mobile banking on her phone.

But I don't have POA.