BCOBS and Unfair Treatment - Lloyds TSB

[Ross John]

22 months ago I approached my bank for a loan to purchase a new car.

 

While my credit rating was 'fair', I had no outstanding debt and no defaults. In fact I hadn't had any credit for 8 years or more simply as I didn't need it. Hence the 'fair' rating as my bank account was the only item on my credit file.

 

I had my account with Lloyds for about 8 years and in that time my bank account was kept in good order, not straying over limit and very rarely using an overdraft facility. I earned a reasonable wage of c40k.

 

The guy in the branch stated that I was eligible for a loan up to 16k and so will filled out an application for a 10k loan. The loan was declined. When I enquired as to why I was informed that there was a marker on my account stopping any loan. I queried this as the guy had said I was eligible for up to 16k and so he contacted the lending team who simply refused to give any reason and just said that they would not loan me anything. They didn't even perform a credit check.

 

As I was about to start a new job, I would no longer be commuting into London to work and so would need a car in order to do the new job. Knowing that I had insufficient credit history I knew that I'd struggle with some of the hire purchase companies and so really needed to access money to buy a car immediately.

 

The solution offered to me by the bank was that I look for a cheaper/older car and that they could offer me up to £3500 via an overdraft facility.

 

I queried this and said that I would rather enter a loan agreement with them for £3500 but was told that they would not allow any lending on a loan agreement, only via an overdraft facility. That there was a marker on my account, that they were unwilling to explain, that meant i could not get a loan, but that they could offer an overdraft.

 

Obviously overdrafts are not regulated in the same way as loans and I knew I was being 'done' here but had little option but to take the overdraft; knowing that I'd find it difficult to pay this down in the same way I would have a loan given that there would be no structured payments.

 

22 months later and they are now trying to offer me a loan. In fact they are saying that I have guaranteed acceptance for their loan and should take it to clear my overdraft.They have been doing this since I wrote to them stating how unfair the whole practice is about 10 months ago.

 

I've sorted the lack of credit history since that time and now have an 'Excellent' credit rating.

 

However, I really do feel as though I've been treated badly and unfairly by Lloyds. They were prepared to lend £3500 by overdraft but not by a proper loan.

 

Do I have any recourse under the BCOBS and unfair treatment process?

 

Any thoughts/advice welcomed. Thanks...

Edited March 7, 2013 by Ross John

[fletch70]

It sounds to me as if you either had a cifas marker on your credit file or something to do with nhunter (don't really understand that bit) I believe they should have given you an explanation.

[Ross John]

I checked my credit file at the time and there was no CIFAS marker. Could have been an Nhunter, I didn't check and Lloyds point blank refused to give me a reason.

 

My issue really is whether I have any recourse against Lloyds. They were happy to lend me the money, but just under the terms of an overdraft rather than loan. Seems a bit of a deliberate ploy really, as I would imagine most people will find it harder to pay an overdraft down than a loan where money goes out of the account each month. Once they're happy they've made their money from the overdraft they can they get you into the loan agreement initially refused to you. In other words, they get paid twice on the same money.

[BankFodder]

They are unfair. They are both stupid and unfair.

 

Did you ever send themn an SAR to find out what the marker was?

 

I think that you should look after your best interests - and also rock the boat a bit.

 

Have they "guaranteed" the loan in writing? You may be about to fall into the same trap. They often promise people loans or cards and then change their minds for no reason.

Get it in writing.

If it makes more sense to you to take the loan - then do that. They will try to give you a bit of extra cash as well to make the loan larger. Beware of doing that.

 

If you decide to get the loan - then get it - but then afterwards, once you are sorted out, make an FOS compalint about their unfairness - but also that they are apparently using markers on your account without any explanation.

 

I'm afraid that although BCOBS could apply here, it doesn't seem worth the candle to start going down that kind of road.

[Ross John]

They have guaranteed the loan in writing on numerous occasions without me even asking for one - unsolicited letters.

 

I'm in the process of moving home at the moment (mortgage is in the wife's name) and have a joint mortgage in principle agreed with another lender. Until that is complete I don't want to put a new credit agreement on my credit file as it will likely affect my mortgage application. From the house sale I will be able to release some equity to pay off the overdraft and so will not need a loan once that happens. On this basis I'm sort of stuck with paying the overdraft fees until we complete the sale.

 

Once that's all done I will most definitely be changing my bank.

 

Ideally, what I'd like to do once all this is complete is to challenge Lloyds on how they have treated me and seek compensation from them for the increased cost of running an overdraft versus a loan. What i don't want to do is rock the boat too much before the house completion and provoke them into removing the overdraft facility altogether.

 

Any ideas on the best way to challenge them and how to go about seeking compensation? How much compensation? Do I stand a chance of getting any compensation?

[BankFodder]

Don't bother about changing your bank. They are all the same. Better to stay on an be a thorn in the flesh.

 

I also don't think that there is much a basis for compensation - unless you can show that you have lost money as a result of their unfairness.

 

They will way that they have the discretion to make their own commercial lending decisions - and this is correct.

What I find unacceptable is that they use secret markers to make decisions and I think that this is contrary to the DPA.

Make an FOS complaint when you are ready.

They may well make you an offer to bring it to an end.

[Ross John]

Thanks for the advice.

 

Is it worth me putting it to the bank once more before I go down the FOS route or just go straight there?