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Banks Sell Loans To Vulnerable

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Guest uberstuka


Banks sell loans to vulnerable

Peter Burridge suffered brain damage at birth

Some high street banks are mis-selling loans to the sick and vulnerable, evidence obtained by the BBC has shown.

Staff and customers contacted Real Story after a documentary in May revealed how, according to an internal investigation at Lloyds TSB, unaffordable loans were being sold by bonus-driven, and sometimes under-trained employees.

Peter Burridge, 47, who is living in sheltered housing on disability benefits, was given an £800 loan with a £500-limit credit card by Nat West.

When he told an employee at his local branch in Sutton, Surrey that he could not read or write they filled in an application form on his behalf.

You wake up in the middle of the night thinking 'Oh my God, where am I going to get customers?'

Lloyds TSB branch manager

His family took legal action and earlier this year Nat West finally agreed to write off the debt, but they are still having to pay the legal fees incurred.

His brother, Jonathan, told Real Story: "My father was certainly physically ill for a period with worry when we found out about it."

"I think Nat west have dealt with it appallingly badly."

Nat West said they were satisfied that Mr Burridge understood what he was signing and it was only later that the extent of his learning disability became clear.

But they did accept that they failed to meet their own standards of customer service in their dealings with the Burridge family.

The Disability Rights Commission said the bank should have found an independent advocate to help Peter rather than have the loan provider complete the form.

Mr Browning went on a spending spree shortly before being diagnosed as a manic depressive

In another case, Stephen Browning ran up debts of more than £100,000 to Nationwide, Barclays and HFC while he was suffering from manic depression.

In a particularly acute phase of his illness, he went on a spending spree and bought three cars.

He said he told the banks he was about to start a business - but if they had checked they would have found out he and his wife were on benefits.

Diana Browning told Real Story: "I think with this particular illness, whatever Steve was thinking about at the time is what he believed.

"A financial company should agree things in principle and then say 'We need to see the evidence.'"

Barclays and HFC said they were committed to responsible lending but it was dependent on the customer supplying accurate information.

Nationwide are trying to recover their £7,000 out of the equity from the Brownings' house, even though the loan was not secured it.

Hard sell

Real Story was leaked an internal Lloyds TSB report which assessed the performance of 1,000 account managers.

Among the bottom 50, many were failing to sell a variety of financial products - yet were hitting their targets for selling loans.

This tallies with the view of industry observers that performance targets drive staff to concentrate on selling loans - and not necessarily responsibly.

Real Story sent Lloyds TSB customers with debt problems to three managers on the list for advice.

Two were correctly turned down for loans but single mother Michelle Ross was offered £7,500 by the bank's Oxford Street branch.

It would mean her paying £60 more a month more than she does at present, driving her even deeper into debt.

Lloyds rejected any suggestion that their adviser had acted inappropriately.

Voluntary code

But several former and current branch managers contacted the programme to say the pressure to meet targets was unbearable.

"You wake up in the middle of the night thinking 'Oh my God, where am I going to get customers?'" said one man.

Last month the Banking Code Standards Board met to discuss their voluntary code set up to protect customers against inappropriate lending.

But independent financial expert Ian McQueen-Sims said the necessary checks were not in place.

"The Financial Services Authority could put in regulation like they do for mortgages that sets out the guidelines banks have to look at.

"It means they have to check out your income and expenditure closely to make sure you could afford to pay back the loan."


Real Story - BBC ONE, Monday 1 August, 2005 at 193O BST.

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Hmm give them some of their own medicine......go to bank, borrow £100,000 use to buy 400 Kreugerands using cash, bury in back garden, declare self bankrupt.

Dig up gold over time cashing it as you need it. :ph34r:

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