My horrendous Loan experience

[Myloannightmare]

I’m a teacher, a husband, and a father. What I thought would be a straightforward loan process with a regulated financial firm has instead left me feeling deeply distressed and struggling with my mental health.

Over the past few years, I’ve had ongoing problems with this company. Two separate complaints I raised about irresponsible lending were upheld by the firm itself. Despite that, I continued to experience difficulties with my account, including confusing and contradictory loan schedules and balance changes that I couldn’t make sense of.Just last week, over £7k was deducted from my loan balance and then added back on, along with two extra months to my schedule!!

Throughout this period, I repeatedly told the firm (more than 40 times) that I was struggling with my mental health and was in a vulnerable position, including suicidal ideation. Instead of feeling supported, I received multiple arrears notices in a very short period of time- one time I received 7 in 24 hours , which contributed to a serious mental health crisis for me.

When the firm finally sent me a formal response, it included a small offer of £50 for distress, which I personally found inadequate given the impact this situation has had on my wellbeing. At the same time, I was told someone would contact me about a payment plan, even though my complaint was still ongoing with the FOS. To me, that felt confusing and out of step with the complaints process.

despite telling them of my vulnerabilities they still emailed me, inviting me to apply for a new loan.

recently I had to reach out to a mental health crisis support organisation as the stress of this has pushed me to the very brink.

From my perspective, this experience highlights the challenges vulnerable customers can face when dealing with financial firms, and why I believe stronger safeguards are needed. The FCA’s Consumer Duty requires firms to avoid foreseeable harm and treat customers fairly. In my own case, I don’t feel those principles were met.

I wanted to share my story in case it helps others who may be going through something similar, and to raise awareness of how important it is for regulated firms to handle vulnerable customers with care.

What company?

It’s a company called updraft. They’re all over social media.

Have you contacted CAB? Seems you need help untangling this mess.

Why did you borrow the money? Were you struggling at the time with your mental health then and did you tell them you were a vulnerable customer, or could you just not afford the loan in the first place? They loaned you money presumably based on the information you gave them and you agreed to the terms of the loan. Did your circumstances change so you could no longer afford the payments? It sounds like they have offered a payment plan to allow you to pay back over a longer time scale if you are struggling to pay. I assume you think that you shouldn't have to pay the money back at all, but you need to take some responsibility for taking out the loan in the first place.

Never heard of them, did you shop around?

A google search brought up the MSE forum where Updraft is effectively described as a debt consolidator. While some people have had a positive experience using them

"A Financial Ombudsman Service case from 2022 raised concerns about whether Updraft always conducts sufficiently thorough affordability checks before approving loans intended for consolidation. In one instance, it was deemed that the loan did not provide meaningful benefit and may have left the borrower worse off."

eta
Using Updraft at c. 25.9% apr might indicate that OP was in a precarious financial position with debt repayments, given that there are other ways to finance debt at a lower interest rate.

That’s not the point of my post at all, I was in a bad place when I applied and should never have been given a loan. This is the exact reason why lenders are required to have appropriate checks in place. They agreed that two of the loans should not have been granted. Despite this, they carried on sending me invitations for further borrowing and threatening me with debt collection when they said they wouldn’t ( i have this in writing) they sent me multiple arrears notices in 24 hours some with no Info included, and others that contradicted each other. They changed my balanced by 7k in one day and added two months to my loan. It’s been shocking

You would have probably been better off going to a main stream lender, this seems to be a pretty small company specialising in consolidating debt, is that what you did? If so the debt already existed and I assume they offered a better rate than you were already paying.

@Myloannightmare Have you contacted the FCA about your complaint?

Yes I’ve referred everything. I’ve literally hundreds of pages of evidence

mainstrean lenders wouldn’t approve me. Some was for consolidation and some for house repairs. Either way, it should not have been approved

If mainstream lenders wouldn’t approve you, did you not think that you probably couldn’t afford the loan?

I’m sorry the company may have made admin errors, but ultimately you took the loan out, you need to take responsibility and pay it back. It comes across as if you think this shouldn’t apply to you because of your mental health struggles.

That’s really unkind. You’ve no idea the stress this has caused me. It’s led to me very nearly ending my life in two occasions

I agree there needs to be better governance and increased responsibility on the part of lenders. I work in the mental health sector: I’ve seen people with long term serious mental health issues end up in repeat crisis situations due to lenders

@Myloannightmare was the loan secured against your home/property?

No, thank god

But you asked them to lend you the money, they presumably specialise in lending to high risks, the other companies declined you because you are a high risk.

You borrowed, the problem with borrowing is you have to pay it back, the higher the risk the loan poses to the loan company the more interest they apply and you sink deeper and deeper into debt.

It sounds like you need serious financial advice and maybe even to hand over your finances to a third party to manage for you.

Are you hoping they'll just write it off? It reads as if you want to borrow money, play the mental health and unfair lending card and then get all that money for free.

I’m not saying that all. I have an other loan with Halifax who have been brilliant, fair and supportive. Regulated lenders have responsibilities to support vulnerable customers. I’ve had 3 years of continual stress, errors and anxiety.

Absolutely not, I just want to be treated fairly. I entered the loan agreement in good faith. Are you suggesting that it’s ok to subject customers to continual errors and stress??

They don’t market themselves as a high risk lender- take a look at their page

I'm not quite clear here, firstly how does any lender identify whether a prospective customer has MH issues and shouldn't be granted a loan and secondly if the problem is with their incompetence how is that related to your MH?

Like the other posters I've never heard of updraft either which suggests to me they possibly the mistake here was having anything to do with them, adverts on social media are very often a red flag in themselves

Please don't contemplate suicide, its a bit of money, you have a wife and children, you mean more to them than money - the worst that can happen is the bailiffs turn up and take the TV, its not the end of the world!

From a practical standpoint, don't bury your head in the sand, watch out for court letters, if a case is taken against you, respond in the given timeframe and offer to pay the debt off at £10 a week, almost certainly the court will approve that and you won't get the bailiffs.