Bank lost loan agreement. Do I need to repay it?

Enigma365

Hi,

I took out a student loan with Ulster Bank in 2002.

The loan agreement stipulated that I had to start re-paying the principal 6 months after graduating from College. However I received numerous demands for payment prior to this date. Upon contacting them, they admitted that the branch had misplaced the loan agreement and they had no idea when I was to start paying it.

Anyway to cut a long story short, I have been repaying the loan sporadically over the past year (I've been living abroad). I missed last months payment however and they phoned me today. I decided I had better sort the mess out once and for all, and I stated that I would not repay any more of the loan until they provided me with a copy of my loan agreement, (as I really have no way of verifying if they are charging me the right interest etc. otherwise).

The guy was evasive in answering and said he would put in a request for a copy of the agreement to be sent to me but said that I had to make a payment immediately. He got quite upset and kept mentioning debt collectors everytime I said I would not make a payment until I received a copy of my loan agreement.

Anyway I told him Id make a payment next week but I've been researching since, and under UK law at least, it seems that if the bank does not provide a copy of the loan agreement, they are breaking the law, and furthermore the loan is unenforceable. Does anyone know if the same is true under Irish law?

I don't really have any moral right to avoid repaying the money but at the same time, I have legal rights and they have treated me like **** (demanding payments before they were due, closing my current account without warning, threatening me with legal action even though Ive been making payments)

Advice?

Toots

Your next step should be to contact the Financial Ombudsman. In the meantime, keep paying your loan, that way if the credit agreement is found and it turns out you're in the wrong, at least you won't be in arrears. Do you not have the copy of the loan agreement you would have gotten when you initially took out the loan?

I'd urge anyone posting on this thread to familiarise themselves with the charter before posting. If anyone offers advice on how to get out of loans without paying, they will be infracted.

Enigma365

Do you not have the copy of the loan agreement you would have gotten when you initially took out the loan?

No, it was 7 years ago and I was a 19 year old student. I probably had it for little more than a week.

They actually got me to come in and sign a new repayment agreement two years ago, right before I moved to the UK. This agreement required me to make a monthly direct debit payment on a set date. The first of these payments came out, but they then returned it and stopped the direct debits. It turns out the new agreement I had signed had not been filled out correctly on their side, or had been lost again(I'm not sure which).

Anyway as I was now living in the UK and my bank statements were going to my old address, I did not realise that anything was amiss for a few months. I had assumed my monthly payments were automatically going out as agreed. The first I came to know about it was when they closed my current account. I tried to explain that I had signed a repayment agreement with them, but they claimed no knowledge of it.

Since then Ive been making payments on a fairly regular basis, based on a verbal agreement with them. However there is no legal repayment agreement in place, as the person on the phone confirmed yesterday.

I guess I need to contact the financial ombudsman, which I will do today.

If anyone offers advice on how to get out of loans without paying, they will be infracted.

I appreciate your responding to my post but surely people can offer their opinion, as long as they do not suggest illegal behaviour?

Toots

Enigma365 wrote: »

No, it was 7 years ago and I was a 19 year old student. I probably had it for little more than a week.

They actually got me to come in and sign a new repayment agreement two years ago, right before I moved to the UK. This agreement required me to make a monthly direct debit payment on a set date. The first of these payments came out, but they then returned it and stopped the direct debits. It turns out the new agreement I had signed had not been filled out correctly on their side, or had been lost again(I'm not sure which).

Anyway as I was now living in the UK and my bank statements were going to my old address, I did not realise that anything was amiss for a few months. I had assumed my monthly payments were automatically going out as agreed. The first I came to know about it was when they closed my current account. I tried to explain that I had signed a repayment agreement with them, but they claimed no knowledge of it.

Since then Ive been making payments on a fairly regular basis, based on a verbal agreement with them. However there is no legal repayment agreement in place, as the person on the phone confirmed yesterday.

I guess I need to contact the financial ombudsman, which I will do today.

I think you should probably give UB head office a call, if you haven't already, before you contact the ombudsman. They usually ask that you try to resolve the issue with the bank before they get involved. You could give the Financial Regulator a call too and see have they got any advice to offer you. They might not be able to help, but it'd be worth a shot.

I appreciate your responding to my post but surely people can offer their opinion, as long as they do not suggest illegal behaviour?

Did you get a copy of the second agreement you signed? There's a few posters here who work in UB who might be able to give more advice on this. However, I'd say the odds of you not having to pay back that loan in some way, shape or form are between slim and none. It's clear that the money was borrowed, however the questionmark lies over the repayment schedule. I would be very skeptical of anyone coming on here saying that it's now perfectly OK to not pay the loan back. As I said, if anyone has any constructive useful advice to offer on the situation, that is fine, but anyone who comes on posting advice on how to 'do' the bank out of the loan is going against the charter of the forum.

dazberry

Enigma365 wrote: »

I guess I need to contact the financial ombudsman, which I will do today.

Really what you need to do submit a written complaint, and its up to UB to address this in a given timeframe.

http://www.ulsterbank.ie/roi/personal/generic/complain.ashx
http://www.financialombudsman.ie/making-a-complaint/

When should you seek help from the Ombudsman?

If you have followed the internal complaints procedures of your financial service provider and you are still not satisfied the Financial Services Ombudsman may investigate a complaint about.

D.

stepbar

The bank may not be able to legally enforce repayment of the debt without a legal agreement. However because it's a contract you are still legally liable - http://tutor2u.net/law/notes/contract-elements.html. The danger is if the case came in front of a judge, he may throw it out and force the bank to write off the debt. I do know of many cases where the bank has just written off the debt because a CCA could not be found.

Toots

stepbar wrote: »

The danger is if the case came in front of a judge, he may throw it out and force the bank to write off the debt.

If that happened would the OP's credit rating be affected seeing as the debt had to be written off?

seamus

Toots* wrote: »

If that happened would the OP's credit rating be affected seeing as the debt had to be written off?

The bank can still remark to the ICB that he failed to make a repayment on a loan. The striking out of the loan may not appear on the ICB report. As someone else has said, just because he lost his loan agreement and the bank can't find it, doesn't suddenly make the debt nor the contract "go away". He's already admitted that he took a loan, ergo a contract exists and he is aware of this fact.

Enigma365

He's already admitted that he took a loan, ergo a contract exists and he is aware of this fact.

It does raise questions over how much I owe, how much interest I should be paying and what my repayment schedule should be, though. Right?

I am going to submit a written request for the original loan agreement.

In the meantime, until there is repayment agreement in place, then it is not technically possible for me to go into arrears, right? I may just wait to continue payments until I hear back from them.

The bank may not be able to legally enforce repayment of the debt without a legal agreement. However because it's a contract you are still legally liable. The danger is if the case came in front of a judge, he may throw it out and force the bank to write off the debt. I do know of many cases where the bank has just written off the debt because a CCA could not be found.

Yes, from what Ive read on the internet, in the UK at least, when the loan agreement is lost by the bank, it is up to a judge to decide if the loan is enforceable, and in most cases the judge decides that it is not enforceable even if it is clear the loan exists. It seems that mostly, the bank offers to settle for a lower amount with the customer or else writes off the debt completely. Of course I fully realise that Irish law may be completely different to UK law but it's probably similar.

Anyway, I took out the loan and temptations aside, I do have a moral obligation to repay

However the bank has treated me incredibly badly this entire time, first (probably) losing my original agreement, then asking me to come to sign a second agreement five years later(which I was happy to do), then losing this second agreement and finally, denying any knowledge of it. They have rarely been apologetic, they have simply threatened me and made me out to be a liar whenever I mentioned the second agreement. I don't mind that they made a succession of mistakes but I mind that they made the mistakes but still treated me like I was the one in the wrong.

In summary, is no agreement is forthcoming, then I will probably just tell them that I am going to repay the principal in full, without interest, as there is no way to ascertain how much, if any, interest was agreed to be paid. Thoughts?

The bank can still remark to the ICB that he failed to make a repayment on a loan.

Could they put it on my UK credit record? I will make sure they agree to not put any bad credit rating on my record before paying off the loan.

seamus

Enigma365 wrote: »

In summary, is no agreement is forthcoming, then I will probably just tell them that I am going to repay the principal in full, without interest, as there is no way to ascertain how much, if any, interest was agreed to be paid. Thoughts?

Sounds reasonable to me. Without the loan agreement, they have no way of knowing the period of the loan, how long is left in that period and what interest rate was applied. Therefore the interest canont be calculated.

Could they put it on my UK credit record?

Not if it's a loan from a bank in Ireland.

Toots

Send in the request by registered post, and keep a copy. AFAIK, they'll have 30 days to respond to you.

In the meantime, until there is repayment agreement in place, then it is not technically possible for me to go into arrears, right? I may just wait to continue payments until I hear back from them.

I suppose technically this is true, however in the event that they do locate the loan agreement, and it turns out you're in arrears, you should be prepared to clear them as quickly as possible, for your own benefit. If it's a loan with an Irish bank, it won't show up on the UK equivalent of the ICB. I'd also send in a letter of complaint into the customer care department detailing your experiences.

Enigma365

Send in the request by registered post, and keep a copy. AFAIK, they'll have 30 days to respond to you.

I sent them a letter today by registered post. Highlights below.

I am writing to request a copy of the original loan agreement for the loan account: #xxxxxxxxx with the branch sort code #xxxxxx. I would also like a complete breakdown containing the original loan figure, the total amount that has been paid towards this loan to date and what Ulster Bank believes remains the amount due.

This loan was originally taken out several years ago and due to several acts of serious incompetence by Ulster Bank, has dragged on unresolved to date. I will not go into these problems in detail as they are so numerous and detailed that I will likely be filing a separate complaint.

Until I receive a copy of this agreement, I will be making no further payment towards this loan. As nobody at Ulster Bank can tell me what the agreed, written-contracted payment schedule is, I do not believe it is technically possible for me to go into arrears, as one cannot be late making a payment for which there is no known payment date.

As soon as the loan agreement is forthcoming, I will resume making payments immediately to clear off the loan.

In the unlikely event that no signed loan agreement is forthcoming, the enforceability of the loan, as well as the interest payable, if any, may come into question.
Please note that in order to keep all communication documented, I am only prepared to communicate by written letter and will not discuss this matter by phone.

What galls me is the last time I spoke to them on the phone on Monday. The guy was being really annoyingly agressive hassling me for an immediate card payment. I said I wanted a copy of the loan agreement and would make a payment immediately upon receiving it. He got really upset everytime I said this and kept threatening that if I did that it would possibly go to debt collectors as I am "severely in arrears". It is worth bearing in mind that I have made regular monthly payments from December to May, without gaps, and he was considering me "severely in arrears" because I hadn't paid anything in June.

Moreover, in the same conversation, he stated that there was no repayment agreement set up for the loan. It only clicked afterwards that he was berating me for being in arrears even though he knew no repayment agreement was in place. Those two things seem completely contradictory.

It is their whole attitude of rudeness and bullying, when they are the ones that have caused this whole mess and given me a massive headache for the past number of years, that has me so adament that I'm going to make sure they lose out something from this. I've known about the original lost agreement for over two years and never considered anything but repaying the loan and interest in full, but enough is enough. Maybe they will learn to treat their customers better next time they mess up.

Of course they may find the original agreement and the whole thing will be moot, but I doubt it.

RoadKillTs

I think you are right to complain but I don't think you should stop making payments.
If you stop making payments you are still breaking a contract and possibly damaging your credit report.

unclebill98

The best thing to do is contact the bank with whom you took the loan out with.

Make an app and clearly lay out in that app what the issue is. Ask for a concern ref number. They may forward this on.

As soon as the bank open this concern there internal system's make sure that the branch follow proper time frames in getting back to you. You should receive an ack letter from them stating your problem and giving you a pre agreed time frame, chosen the bank on when they'll get back to you. They'll also lay out how there going to deal with this. After a max of 10 days you'll get another response with an update or a resolution of the problem.

If and only when they give you their Final response should you bother going to the Ombsman with the problem. Cause they'll make you go that far any how.

I've heard of cases of no CCA that the debt gets wiped, but there cases where loans are drawn payment are never made and it goes from there. You situation is totally differant.

As for not know the payment arrangements or the term of the loan may not be of any use. You agreed back before you left the country to pay a certain amount per month.
You'll be expected to keep payments up until the matter is resolved.

The only thing you remember is that the loan was not meant to start repayments 6 months after you finished college, but you can't remember much else, could it be that the term and amount are correct and you've forgot? Most student loans are granted and must be cleared during the summer months before the next year. The students only have to meet interest repayments on the loan. The term of loans to students very rarley last to 5 years. Which could indicate that your correct.

Also, if your case is with the CMS dept, all those calls are recorded. So if you felt treathen by someone on the phone, then complain about that too and someone will listen to that call. The person making the call and you are fully aware of the call being recorded.