Friday, May 02, 2008

Barmy Banking

Vi is asking about experiences with banks. This is mine.

When I lost my job in 2003 I was, to put it mildly in a bit of a state. Health problems which were blindingly obvious to my employer were still being denied as nothing more than attention seeking by the doctors supposed to be in charge of my care. Diagnosis would come some months down the line, but at the time I had no idea of the underlying cause.

I was left with no option but to apply for benefits. I managed to fight my way through the reams of forms which needed filling in, but in the meantime I had nothing to live on. No wages, no sick pay, no benefits.

To grant my income support, the benefits agency needed certain documents from my employer. They wrote, and then wrote again asking for the relevant items, but there was no response. I phoned my employer (the NHS), they promised to send said documents immediately, but seemed never to get round to it.

I
n the meantime I had to find some way to pay for the essentials, primarily food and the debt on my car as I was lucky enough to be renting from an old friend prepared to wait for the rent until whenever housing benefit came through. So I went to my bank for advice.

I had limped into the bank with my arm in a sling and fully declared everything I knew about the health issues I had. I was asking for advice on what the best course of action would be between my sick pay finishing and my benefits starting. I had absolutely no income, and as it was the local bank of my branch they had accessed my accounts and had that information in front of them.

I was in such a state both physically and mentally that when the 'personal banker' repeatedly insisted that the best course of action would be to take out a personal loan I believed her. The idea that the advice might be biased towards sales figures and not in my best interests simply never occurred to me.

So, when the advisor repeatedly told me that it would be cheapest for me to take out a £12, 000 loan I believed her. Plus insurance of course. I declared my (very visible) existing health issue and asked if I could be insured. I believed the repeated assurance that as I'd declared my health conditions I would be fully covered by the insurance if for any reason I could not repay the loan. The total, including insurance, turned out to be something like £18, 000 but I would not know that until much later.

It took over four months for my benefits to come through. The irony being that on the day I was diagnosed I found out I was entitled to high rate mobility allowance, back dated to before I took out the loan.

Of course I couldn't pay the loan back. The repayments were around £250 a month. I carried on making the monthly payments for something like a year, having no idea it was possible to access any debt advice. Loan payments meant I literally couldn't afford to eat. So I didn't. I somehow got through a winter where I was quite literally starving and freezing.

It was Star who helped me. She put me in touch with a debt management charity and sent her parents round with a car boot load of food and basic essentials. I am in no doubt that their actions saved my life. The debt management charity were disgusted at what was, of course, a missold loan. Turns out it wasn't unusual for that to happen to people on benefits, particularly those with disabilities. They helped me deal with the bank and set up a token payment each month.

I accept fully that it was my responsibility for taking out the loan and being so stupid. However, I cannot help but blame a bank for pressuring someone so visibly vulnerable into taking such a significant loan whilst fully aware that person had absolutely no income. Oh, and of course the insurance didn't pay out. They refused on the grounds I had a pre-existing condition despite my being able to prove I hadn't known I had the condition at the time.

6 comments:

CalumCarr said...

Hi

Earlier this week I left the words below as a comment on a post about US issues but I think they are relevant here.

"where there is money there is greed

where there is greed there is exploitation

where there is exploitation the poor lose

where the poor lose we must fight
"

transfattyacid said...

This is a very common experience.

It shouldn't be but it is.

As is only finding out later that you were entitled to benefits that were never mentioned at the time, meaning that you find yourself in hardship, simply for being ill.

Anonymous said...

The term BSS was around when you were at university, and the idea is older than me- university students realise even less than others of their age how little they know of the world. These people really exist- and an able bodied person is disproportionately likely to meet them compared to genuine cases as the disabled don't go out so much. I've met many over the last ten years thanks to a wayward daughter and they are remarkably like your relative- they were brought up to believe that they needed to make no effort for themselves and had no obligations to others. When they find it isn't so they throw a kiddy fit and take it out on the nearest target.
However when(if) Your relative grows up he will have a degree and a decent chance of making a living- when these poor sods grow up they've no qualifications, no references, and likely a criminal record. Add to that the ludicrous marginal rate of tax for anyone trying to get off benefits and they're trapped.
Solutions aren't easy, but removing the poverty trap would at least provide an escape route, and it would help if they were not lied to in the first place.
Oh and I believe that sympathy and help for the genuinely disabled would increase if we weren't supporting so many overgrown children.

On another topic "The covenant" blew me away. You sure can write. I've nothing intelligent to say on that save best wishes, which is pathetically inadequate.

Pat

Jim said...

I got caught out by loan insurance. Recently I wrote to the lender and cancelled the insurance policy. I thought that they would fight it, but I got £900 back almost immediately.

Banks can be harsh indeed.

J

Vi said...

Absolutely ridiculous! I tell you what helped me when I left my husband with these sort of issues, was the CAB. Taught me a lot.

Lil Jimmy said...

I have been there with no "tide over" money and the bureaucracy mind boggling and I might be there again in a few weeks. I can feel your anguish from here.