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.

The stress and incessant issues have made come very close to ending my life on two occasions. I told them this (44 times in emails) but it’s only gotten worse. The 7k ‘mistake’ last week was horrendous.

I know that, but they can make the lender behave fairly

I think it’s something that others are experiencing too

What were you hoping to achieve by telling them that?

Regulated lenders have an obligation to support vulnerable customers and not create foreseeable harm. Repeated errors, poor communication and distressing mistakes ( erroneous threats of debt collection) causes harm and distress. www.fca.org.uk/news/news-stories/review-firms-treatment-customers-vulnerable-circumstances

‘The 7k ‘mistake’ last week was horrendous’

They certainly do sound very disorganised but I’m not sure I’d describe the balance dropping by £7k then returning as ‘horrendous’ Did you prematurely assume you no longer owed that £7k and then feel annoyed when it reappeared? I’m a little confused.

Do you have a diagnosed MH condition which would categorise you as vulnerable?

Yes. Please stop this. It’s not fair and it’s not what my post is about.

I’m trying to understand your post but I will stop if it is upsetting you as that wasn’t my intention. I hope you get this issue resolved to your satisfaction and your MH improves.

Have you thought of contacing Step Change? They helped a family member who had got into trouble with multiple debts. The negotiated with lenders and worked out a repayment plan to help her repay. They act as an intermediary between you and the companies. Their help is free and non judgemental.

Yes I’m definitely going to speak to them next week

It’s entirely reasonable to expect the loan company to communicate accurately and in line with correct timescales. They certainly shouldn’t be hassling. I assume you’re paying off the loan on time with no late payments? I’m confused about the £7000 issue though. Surely you’d know that if £7000 suddenly appears to be knocked off what you owe, then added back on, you’d know it’s incorrect? Really annoying I agree, though.

I moderate on MSE debt free wannabe and sadly we hear of this all the time. Unfortunately these lenders who lend irresponsibly are usually the most agressive when the borrower falls into arrears. I hope the irresponsible lending is upheld. Thankfully it is not secured so they can do nothing. I hope you are now getting help with your finances. If is worth repeating for others who may be in your position. Debt consolidation does not help if you cannot meet repayments. Go to MSE DFW or Stepchange or a free debt charity to get advice/help.

So I’d complained about irresponsible lending and it appears that they took the interest off, possible as part of redress. They then added it back on.

Op step change will help and there may be a local advocacy service that can help speak on your behalf if this is all too stressful. Some of these companies get you over a barrel and you can’t get back up again very easily at all. You will get to the end of this eventually though. Once you’re on top of the payment plan and the complaints are resolved you can get your head down and get it paid off. You’re not alone in this op more and more people, professionals included, are having to accept that loans and debt are now just a fact of life. Acceptance of that may help you shrug the weight of it a bit.

I fell behind with payments so reached out to sort out a payment plan, why I was agreed. They confirmed that they would refer me to a debt collector, however they did….. on the same day.

I wouldn’t have thought they’d just knock interest off like that. It sounds like they made an error and then rectified it. I’m not denying they sound very inefficient. Are you up to date with all your repayments? Sorry, it’s just a bit unclear about how the to-ing and fro-ing of all the emails started

No, I’m a couple of months behind but have agreed a plan. The ombudsman advise that collections activity stops whilst the investigation is ongoing

OP please take care and understand that debt happens to many of us and most of us don't plan to get into difficulty but life sometimes doesn't work out as expected. These lenders make a fortune with high interest rates and should absolutely have policies and processes that deal with customers fairly at all times. When they get it wrong they should be fixing the issue as soon as possible.

I think we need to be kind to OP and others in their situation....the debt won't disappear but by lenders who lend irresponsibly having interest removed from products will hopefully lead them to improve their lending.

At the end of the day, much of this is about how you are framing it in your mind, rather than the actual events. Are you getting some therapy support to manage your MH issues? They are annoying and incompetent, and they definitely should be managing to sort out basic admin but you do seem to be making this the absolute centre of your attention - I'm not judging that in any way as I've been in that type of anxiety spiral and it's awful when your brain is telling you there is no way out.

However, it would be worth I think talking to a mental health professional about this - what do you actually want? Because you seem to want them either a) to write the debt off and/ or b) to admit they were wrong. I think either of those are unlikely to happen - the brutal reality is they are a big company and won't care. They'll offer a small amount of compensation and move on, so the one being hurt by the amount of attention you are paying to them is you unfortunately and there is no way that a loan should be pushing you to suicidal thoughts - it is quite simply not even vaguely worth losing sleep over let alone your life. You matter.

See CAB, get a plan in place and then simply ignore any other correspondence unless/ until you're either feeling better or you get a court date.

I’d recommend getting in touch with step change. They are a debt charity

It sounds horrendous and the emotional toll must be exhausting.

It does sound poor, but these companies just don't care. How long have you got left on your repayment terms? I'd get advice like others have suggested and try and move it to a new provider. Get a quote and then tell them that as they've treated you do poorly you'd like to leave with no exit penalties.

Please get some support from a debt advice organisation like step change or Christians against poverty or CAB. If you’re employed, your employer may have an employee assistance program and they can also often provide debt support.

Your frustration with your loan provider is clear, but it would seem that the underlying issue is the amount of debt you have and FCA won’t resolve that. If you’re employed focus your efforts on getting debt advice and support, you’ll also then have support with your complaints.

It seems like there are two separate questions:

1. should the loan(s) have been made to the borrower in the first place?
2. has the borrower been treated fairly once the loan(s) turned bad.

i can’t comment on the first, and neither can anyone else on the thread really. As a general rule, I do think there’s a reasonably high onus of personal responsibility on borrowers. Some loans are obviously fine, some are obviously not, and a small number are right on the line. It does sound as though OP’s circumstances have deteriorated since taking out the loan(s). I can certainly imagine a world where the financial regulator decides that the lender made a reasonable decision based on the facts and circumstances available to it at the time. All you can do, OP, is let your complaint regarding unfair lending play out.

On the second, it certainly sounds like the OP has been treated terribly. I hope the regulator throws the book at the lender, and awards OP fair compensation.