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.

OK, so I've now googled and literally the first thing that cane up was this https://www.updraft.com/personal-loans-for-bad-credit/

How is that not a huuuuge red flag

The fact is that mainstream lenders considered you a poor risk, which is why you ended up borrowing from what seems to be a niche lender that charges extremely high interest rates. And now you are telling us that you have even more debt with Halifax. Is there a mortgage as well? Credit cards?

Debts don’t occur in a vacuum. Did it not occur to you at any time that this is unsustainable - irrespective of any MH issues? Why did you not seek independent advice - CAB, Stepwise, even just the MSE forum? I bet any one of these would have advised you not to go ahead.

All you can do now is seek advice from these reputable sources and stop spending money you clearly do not have.

Have the FCA gotten back to you yet?

Is this something you could take to the Financial Ombudsman?

Are you able to tell us how much you owe, the interest rate, and your monthly income/expenses and we can offer advice on how to get it paid off?

Hi all,

We'd like to remind everyone of the OP's purpose of this thread which is to share their experience and rise awareness. We therefore ask that all posts focus on this or contribute to these particular points as opposed to victim blaming.

Please report any posts you'd like us to look at.

I don't think lenders are required to contact peoples doctors before lending.
We are all adults,if over 18 and able to actually fill in the the paperwork for a loan,which actually if someone was not of sound mind ,they would not be able to do

I think this is a reasonable point. I would add though, that some people could claim that desperately needing money could exacerbate their mental health issues and that being turned down for a loan could make things worse.

The OP mentioned needing a loan for house repairs. I assume not being able to go ahead and make essential repairs would be a source of stress in itself, so there’s a trade off between the pressure of taking out a loan and the pressure of living in poor housing.

it’s not victim blaming to say that there are two sides in a loan agreement. Presumably going to this company meant the OP wasnt able to access money through any mainstream lender and felt it was essential to be able to access some funds.

@Myloannightmare I think that the thing is here you feel that you were improperly advised to take out a loan. But how were you improperly advised? You say that you have MH issues but this was something you highlighted later with a view to gain some clemency. But as you've found updraft don't do that...they seem to be quite cutthroat.

Only thing you can do is ignore or offer to pay a nominal amount.

Only thing you can do is ignore or offer to pay a nominal amount.

Well no, debt recovery doesn’t work like that. He needs a proper repayment plan. OP posted in Money Matters, not Mental Health, so I am basing my response on him wanting to actually get out of this mess. There are resources out there (CAB, Stepwise etc) and he needs to use them, rather than relying on/hoping for the FOC to somehow make it all go away.

Thanks for everyone’s posts. I totally get everyone’s views. For a long time I blamed myself, and I do agree that personal responsibility is still important.

lenders can’t know everyone’s mental health status. I’ve never expected that. They do however have to adhere to the fca guidelines for responsible lending- https://www.handbook.fca.org.uk/handbook/CONC/5.pdf.take a look.

when I applied I wasn’t in a good place. This a was reflected in my finances. There’s absolutely no way I should have been given more debt. It’s like giving whisky to someone who’s already very drunk.

irresponsible lending is only one aspect of my complaint though, it’s the constant errors, unexplained changes to my balances, multiple arrears notices in 24 hours, incorrect threats of debt collection and additional months being added to my loan for no reason that’s really done the damage. On one occasion I was left waiting for 7 days for help, despite contacting them daily. I genuinely feel like it’s taken over my life and worsened my depression and anxiety

I understand how upsetting this must be for you but you have to accept that these kinds of lenders prey on the vulnerable and destitute. They will do anything they can to use laws and regulations to their advantage, and I can believe that they will occasionally cross the line.

I urge to compile a summary of your debts and a succinct list of your grievances, and make an appointment with one of the agencies I mentioned. They will help you make sense of what has been going on and make a plan to address these issues. Most importantly, they will help you put together a repayment plan which is acceptable to the lender and feasible for you.

If people can't see how that could impact someone's mental health I despair.

Money worries is one of the biggest triggers, and having been in financial advice for 25 years I've definitely experienced clients who have been in your position @Myloannightmare

Please speak with Step Change. Updraft seem to have royally screwed up here but without being privvy to the full facts I couldn't draw an informed conclusion.

Sounds like you have been treated awfully. But what are you hoping they will do to make it right.

That’s for the financial ombudsman to decide. I’m similar cases they’ve been made to refund/ remove interest and in some cases pay compensation. I just want things to be fair

I suggest you get the support of Citizens Advice or a charity that gives debt advice. They should be able to negotiate on your behalf.
You will need to provide medical evidence to back up your complaint.

Are the multiple arrears notices actually incorrect? If they’ve actually been sending out erroneous information or not following their processes correctly then I can see why you’ve got cause to complain.

as far as servicing the loan within the agreed time frame at the agreed interest rate goes, then if that’s what you’ve signed up for, then the company are can reasonably expect repayments to be made.

there is good advice on the thread about getting support on how you can repay and get out of this mess.

it sounds awful for you but when you get to the point that your debts are cleared, the cloud will lift. It would also be good to get very robust support going forward so that you don’t ever get in this position again.

Yes multiple errors. Some had no name or address on. Some had random amounts on. One of the recent ones was dated 2023!! Last week I logged in and they’d wiped just over 7k off my balance and had rearranged the payment schedule. 6 hours later the put the 7j back on, but added an extra two months to the term despite the balance being the same

Ok well it sounds like you’ve got the paper trail of evidence to confirm their errors so your complaint about that should stand. it also sounds like they’ve offered you a payment plan, so although they’ve messed up with making errors in communicating with you, there’s a way forward to pay off the outstanding amount.

MH issues shouldn’t be used as an excuse for not meeting one’s financial obligations. That’s really insulting to the rest of us with MH issues who manage to do so.

But it’s not about that. As someone with MH issues how would you feel with constant errors, multiple arrears notices (7 in 24 hours) l, wild balance fluctuations, constant customer service issues. Is that ok? I’d also question why some if with MH issues post such nasty comments?

Is it a nasty comment to say that you should take responsibility for your actions though? You were turned down by some lenders but you persevered until you found one which accepted you. Are you saying that you don’t have mental capacity to manage your own affairs? I don’t think
it is nasty to ask that.

but that’s not what I’m complaining about? Are you suggesting that I should just put up with these issues? Do I deserve that? I’ve been paying the loan since 2022. Sorry, but i don’t understand your issue?

Look, the Financial Ombudsman is not going to make your debts go away.

There are agencies that can help you get on top of your debts. Are you planning to engage with any of these?

Sorry if I misunderstood. If the company has not behaved professionally then that’s a separate issue but why is your mental health relevant to that? I thought you were complaining about irresponsible lending because the company shouldn’t have lent to you due to your MH issues.

Have you/a friend been posting here a tiktok video of the same issue?
I don't know what the issue is? Are they adding incorrect interest or saying you owe more than you do?

So it seems the issue is focussing on what Updraft have done wrong, and how their errors have caused you stress, not the fact you’re having to pay off your debt. You’ve got the evidence; I think you just have to doggedly pursue your complaint about their errors. And stick to the agreed payment plan and then once the debt is cleared, stay well away from this sort of company.