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.

Honestly I think that it's likely that every second person who takes out loans like this will claim they weren't in a good place . I'm not sure what kind of checks you would expect to be in place to assess someone's mental health before they give out money. They're not going to send out a therapist in advance .
Iim sorry you ended up with loads of debt but claiming distress when they come looking t for their money that your borrowed is clearly unreasonable on your part .

it must be awful to feel this issue is consuming you. Try to separate it out in your mind. The errors and miscommunications by the company need addressing though it sounds like that’s already in hand and your case is being dealt with?

as far as the actual company is concerned, and the terms on which they lend money, well tbh that’s what you signed up to. There would have been reasons why mainstream companies wouldn’t lend to you, you needed a loan and therefore went to this debt consolidation company which does high risk loans. I’m just dealing with straight facts here, not judging because I don’t think that’s helpful but it’s important to acknowledge that this is what the company is and there will be thousands of other people who use them because of a similar scenario. You have the paper trail evidence of the errors so it should be straightforward to prove the errors.

you mention you were given £50 at one point when the company responded about an error and you say it’s not enough. IME this amount is honestly about standard (from mainstream companies too) when they make administrative mistakes like this. It’s a token amount - they aren’t going to pay hundreds or thousands of pounds.

I know it must have been really frustrating to see £7000 wiped off loan at one point and then amended to add it back on. I totally get you feeling angry at their incompetence but you must have realised that you still owed that money and this was an error. So while you have every right to complain about their errors, try to recognise that companies usually give a token amount as recognition when they’ve made an error. This is very normal - they won’t write off thousands of pounds as some sort of goodwill gesture.

So, other than dealing with the company’s errors (which it sounds is already in hand) it’s important to focus on your mental well being and try to just see this debt as something that needs dealing with (and if you stick to the payment plan, it will get sorted.)
Try not to invest any more emotional energy in stressing about the company. You have raised awareness of the company on here as one to avoid, but tbh, people would only be borrowing from them in the first place if they don’t have other mainstream options.

and I can’t highlight enough how going forward, it would be good to get financial support. As others have said, debt is a way of life these days. I don’t think I know anyone of working age who doesn’t have debt - mortgages, car loans, student loans and often others too. That’s part and parcel of adult life now but the key thing is to keep it manageable and within your control so that you’re never in the horrible position of having to go to one of these type of companies again.

I wish you the best going forward.

You’ve not read my post properly if that is your view

You’d benefit from some support from the CAB. They’re impartial and non-judgemental and free. Ive only read some of your posts so perhaps you’ve already approached them but if not, please do as they’ll be able to advise you on the full range of solutions. The very best of luck.

This is great advice.

Why did you keep asking if you knew a loan shouldn't be approved and you had already been rejected by others? As a teacher with a regular income and a family you would initially look like a good risk to a loan company, did you tell them the full extent of your problems and that you had already been rejected by other lenders?

What were your other options if you didn't get a consolidation loan? Obviously you would have had to pay back the original lenders, presumably at a higher rate than the consolidation loan. With the house repairs, couldn't you live without them being done? Did you take financial advice? Or talk to a debt counselling organisation before racking up even more debt that you couldn't afford?

I worked in the debt industry while I was funding my masters back in the 90s. I worked for one of the more ethical companies but I can tell you that the debt industry is rotten and corrupt to the very heart. There is something Dickensian and slimy about companies which buy and sell debts among themselves.

The good news is that debt collection companies themselves have no power other than what you give them. You can even have a game with them if you are so inclined.

Debt collecters can make threatening phone calls, sent texts, letters and emails or even send people to your door (rare). You do not have to open the door to them or allow them in. You should refuse to engage except in writing or by email.

Their only power is to take you to court. They cannot force you to give them money. Only the court can. If you present the court with a budget they will (usually) agree to a payment plan. However you have a statutory duty to keep to the plan once it reaches a court.

By contacting Step Change or simlar organizations you can prevent that. You authorise them to set up and oversee a pro rata payment plan and to liase with your lender/s. Most companies are willing to cooperate with Step Change etc because they know they will get at least some of their money back.

Whilst the company have made administration errors that may have worsened your situation, ultimately you agreed to the terms of the loan (at high interest rates, which is presumably better than the previous debt you were in) and they specialise in high risk cases. You come across as if your mental health struggles mean you shouldn’t have to pay back your loan.

OP I was in a similar position to you many years ago, owing over £30k to credit cards, loans etc.
Thankfully all unsecured debt.
At one point I also felt suicidal, my partner had left, I had a toddler to raise, with no financial help whatsoever from the father.
i visited CAB who were amazing, and helped me set up payments to each lender at an affordable rate.
Please take heart, things will get better, but reach out for help, it is available.
Also totally disregard all the unhelpful responses and frankly rude responses from some people on here, MN can be a vipers nest, but you have had some very good responses too.

Threatening letters/ phone calls/ people at the door is absolutely not acceptable. However, if you’re not making repayments as agreed, the company can rightly take you to court and to be honest, I would want to avoid that at all costs. Sticking to a payment plan is the far better option.

is there any major action you can take in the meantime to get more money? Is downsizing possible (I assume you’re a home owner as you mention borrowing money for work on the house)
You’re a teacher so what about private tuition? If you got 2 or 3 private students, you could use that money specifically for repayments and could make several hundred a month. The deadline has passed for this year but what about exam marking next summer? Or maybe something completely different and you (or your partner if you have one?) could do a couple of supermarket evening or weekend shifts? I know that would be physically quite a lot with a full time teaching job but mentally it may actually help to keep busy and feel you’re doing some work on a temporary basis specifically to pay off the debt.

You've said that the company have acknowledged that they shouldn't have loaned you two loans, so presumably you'll have a record of this which will help your case with the FCO.

I've been there and got the t-shirt more than once with debt, often on anti-depressants. What stands out from your posts is the lack of self-responsibility from you about taking the loans, having been turned away from a mainstream lender (apologies if that assumption is incorrect). I agree Updraft haven't been great, but until you make changes in your mindset (and become more self-aware) it will be several years - possibly decades - until you pay that debt off and you realise it's not a good idea to ever accrue any more. I would be a bit more understanding if you'd taken out the loans in an emergency situation i.e you had no other resource to pay for a new boiler or roof.

I don’t think I’ve said anything that suggests I’m not taking any responsibility

I’ve never said that. I just want to be treated fairly

How have they treated you unfairly?

Expecting him to pay the money back - b*stards!! 🤣🤣🤣

You're like a dog with a bone and you keep coming back for another dig.

Give the guy a break!

Did you read the post?

It was a reasonable question. I don’t appreciate people using MH issues as a justification for lack of personal responsibility. Not sure that makes me a dog with a bone, I am just someone who has struggled with their mental health all my life but never used it as an excuse for my behaviour or expected special treatment.

Yes and it isn’t clear why you are claiming irresponsible lending when you kept applying for loans until you were accepted by that company.

So you have mental health issues yourself yet still think it's acceptable to keep poking at someone who has said they were suicidal at times. You're not asking questions to help him, you are being unnecessarily unkind.

You need to give your head a wobble and stop oining him.

Actually, whilst there’s an element of personal responsibility, lenders shouldn’t be lending to people who can’t afford it (especially vulnerable individuals). They’re supposed to have robust procedures in place, and they agreed that the loans shouldn’t have been approved seemingly without rejected the affordability complaint and it going to the ombudsman.

Let’s stop pretending loan companies are innocent victims here. There are far too many desperate people, living pay check to pay check, who apply (despite not being able to afford it really) because they have no other options. The lenders have the position of power in these scenarios and should be acting ethically in declining unfeasible applications, but far too many of them don’t (and then get stung with affordability complaints down the line, which in many, many cases are actually upheld).

Trust me when I say, I’ve been that desperate. It is an awful, awful feeling, and not as a result of frittering money on luxuries. Some of these companies are predatory, and they absolutely should be held accountable if they’ve behaved poorly.

I completely empathise. Whilst it's not really the same I had a portal where I was paying my sons uni fees and every time I logged on random amounts were showing as outstanding (thousands) even though I knew id paid. No one would reply to emails or answer the phone. It all became really stressful and I wasn't sleeping. Thankfully I dont struggle with MH and it was a highly stressful time. I think with finances you just need straight facts and clear, fair communication. I hope you get sorted.

Thanks for your post

I understand however how is loan company to know that you have mental health issues, or that you will develop mental health issues. They don’t know you are vulnerable and they lend the money on the basis that you will pay it back.
just because the don’t advertise as a specialist lender for people with bad credit their interest rates are known and that must’ve said something to you?
however I can empathise. I’ve had debt, I’ve had times when I didn’t want to face it and yes they did write to me, email me and call multiple times a day. Best way is to deal with it head on and face that you owe the money and need to sort paying it. By doing that my mental health improved and now I’m debt free, including my mortgage, and no longer fear the post man or the phone ringing. I hope you can find some support for this and find a way out of the debt