Irresponsible lending - further advice needed

[deltaguns]

Hi,

I actually posted about this a while ago but I need some further clarification/perspective. Please can I ask that if you respond, it's to answer my questions and not to flame/criticise my mum - We already know that this is not an ideal situation.

Mum is 75 and widowed. She was struggling financially over a year ago but was too proud to tell us. At that point she had about 10K in credit card debt. She applied for a further card from the a different bank ( mainstream bank). She applied online but received an error message. She reattempted later on and it worked. A week later two cards arrived - the exact same product. She was issued with two different customer numbers just one digit apart from each other.

She has run up a balance on both cards that is not affordable. We know that this has to be paid back and WE ARE NOT ASKING FOR IT TO BE WIPED. However I think that it was wrong/erronous of the company to allow two cards.

So my questions are -

1 - would it been a banking error to issue a customer two identical credit cards ( identical limits etc) on the same day?
2 - would this class as irresponsible lending
3 - mum's income is a pension and a very small private pension - I know that they can't discriminate for age but should this have not been considered
4 - would we have a change of getting the interest wiped?

We are currently waiting for a response and I have permission to speak to the bank on her behalf. I am disappointed that she didn't ask me for help earlier but I also feel that she has been treated unfairly.

I know that she should have cut one up/sent one back etc, but in the middle of some financial issues she made the wrong choice -surely they should never have issued these cards?

You had lots of responses on this before. How far have you got with the bank? No response at all yet or have they apologised for the error?

What do you want from the bank, still just a hold on interest on one account, or more?

You've asked the same question as before, basically. You got lots of advice last time but also a fair bit of unreasonable flack.

Write the letter and see what the response is. Escalate to financial ombudsman if they respond in a way you disagree with.

You are spending more energy theorising about what might happen when you should be using that energy to just write the letter.. I think you have a very strong case and if I were in your boat, I'd have sent the letter off ages ago. You have nothing to lose by asking the question.

Hi, we have submitted the letter - they have 8 weeks to respond so we are just waiting. I am just anxious that they are going to come back to mum and say that it's her fault

So, we have just come off the phone to the bank. There is still no formal response to our complaint. However, I called the Credit Card customer service number and asked if I could just ask a few general questions. The lady was actually really lovely and helpful.

She explained that duplicate cards are often issued. sometimes in error and sometimes because the customer has applied twice. She also said that you can apply for the same card twice although this is contradicted on the Natwest website - "Eligibility applies. You cannot open a second credit card of the same type as your current card". I am assuming that mum became an 'existing customer' immediately after opening card 1, so it seems odd that a second one was issued on the same day.

I also talked though my concerns that any card would not really have been appropriate given mum's financial position at the time of applying.

She was really helpful and friendly but obviously couldn't give me any answers. We also spoke to the financial ombudsman. They can't do anything or even receive our complaint until we have had the final response from the bank however the lady I spoke was also surprised that two cards had been issued.

Feeling so anxious with it all

In your post from early December, you didn't mention that she already had a £10k credit card debt when she applied for the two new credit cards. You mentioned that she was keeping up with the monthly payments. Is that still the case? An £18k credit card debt is quite different from the £8k debt you mentioned last time. Can she still afford to make the monthly payments?

Did she declare the existing £10k credit card debt when she applied for the new cards? Depending on what her monthly income is, the bank may have given her an amount of credit that she would never be able to afford, if they had taken her other credit card debts into consideration when making their decision.

Has the bank given you any timescales as to when you will receive their formal response to your complaint?

If the bank doesn’t issue their final response within 8 weeks you can wait a bit longer or take your complaint to the financial ombudsman.

there is NOTHING to be anxious about. In the WORSE case scenario she will be made liable for both cards, but she can offer a minimum amount (below the minimum payments on the card). This would push the cards into default and interest would stop. Your mother’s credit rating would be affected but that’s for the best, she shouldn’t get more credit!
Anyway, if the bank did not do an affordability check or gave her too high a credit limit, it’s likely that at least some of the debt would be written off.

if your mother doesn’t have assets or disposable income why doesn’t she apply for a debt relief order?

but the most important question is - why don’t you seek advice from a debt adviser (from a free debt charity) ?

If the bank doesn’t issue their response within 8 weeks the financial ombudsman has to accept your complaint. They can’t insist that you wait until you hear from the bank, what if the bank never gets back to you? But I’d say wait 10 weeks as banks may be delayed due to Xmas closures.

re the bank issuing two cards; I’m pretty sure this is an unintentional error. Two cards means double the credit limit so they’ll probably wipe off the debt on one card, or the ombudsman will make them.

dont forget to come back here and tell us the outcome!

Does she own her house? If not then just offer to pay the minimum amount, she’s a good age so will never pay it back and if she has no assets they can’t do much…

What PPs said. But if she does own her house, perhaps now is the time she should consider either downsizing or equity release if she wants to remain in her current home.

Either way, if the debt is due to her income being insufficient for her basic lifestyle, plugging the gap with unaffordable credit is unsustainable and she's well along the way to it becoming a real issue because she's either going to have to face being hounded by the collection department if she doesn't pay or if she does, it will affect her ability to buy food and pay basic bills, neither are a good position to be in.

But she needs proper advice based on her full circumstances because even if the complaint is upheld she's still going to have to pay the money back or seek a formal solution as well as sorting out the gap in her budget.

Have a look at the debt free wannabe forum on money saving expert, they have people who really understand credit cards etc and will be able to give really knowledgeable advice.

I will, thank you

Thanks for posting. We are supporting mum now and I am going to take over the payments - I would just prefer them to be interest free! I am not in a position to take out a loan or a 0% card as I need to remortgage in 18 months.

She explained that duplicate cards are often issued. sometimes in error and sometimes because the customer has applied twice. She also said that you can apply for the same card twice although this is contradicted on the Natwest website - "Eligibility applies. You cannot open a second credit card of the same type as your current card". I am assuming that mum became an 'existing customer' immediately after opening card 1, so it seems odd that a second one was issued on the same day.

I agree with you that this probably is a mistake by the card issuer and they didn't intentionally process two applications for two cards. I am sympathetic about that; however, I doubt it will count for very much in terms of helping you out - but you never know.

Fingers crossed you can come to a resolution.

I just want them to take some of the responsibility by removing interest - we will clear the balances

Are you expecting them to remove interest from just the second card (where you may have a case for irresponsible lending if a second card shouldn't have been issued) or from both cards? I think it would be reasonable for you to hope/expect them to remove the interest from the second card, but not from the first.

@deltaguns did you get any resolution on this?

Yes, they have removed interest on both cards and have also cancelled 3k off the balance of card 2 - A good outcome.

That's a good outcome!

Oh that is a good outcome! Just be aware that if you are now making the payments when you come to remortgage as you said, they will consider that a regular financial outgoing/responsibility.
Now might be the time to talk to your mum about LPA too, if she's already not making good decisions that may get worse as she gets older and it's always better to have it in place before any decline