Bank cannot provide signed guarantor loan agreement - is it enforceable?

[BusyBeeBee]

Hello you very helpful, knowledgeable people!

I have a strange issue and I wonder if anyone can offer any advice please?

A year ago Barclays Bank asked me to personally pay back a company overdraft for a now dissolved limited company, stating I was the guarantor. Each time I asked them to provide a copy of the signed overdraft agreement they sent a blank non-signed/dated agreement and just said “it was signed electronically”. It went quiet until 8 weeks ago when they wrote again stating I should repay it as the personal guarantor, or it will go to a debt collector. I wrote again, this time they raised it as a complaint. 8 weeks later (the maximum time to have sorted out a complaint) I received the same non-signed/dated agreement stating “it was signed electronically” and that it is payable.

There is no Docusign Security information, i.e. Certificate of completion, Record Tracking, Signer Events, Dates Stamps, Record of IP address or any Authentication Details.

Is it enforceable?

Many TIA

 

[estwig]

The burning question: Did you sign it?

 

[BusyBeeBee]

I don't remember signing this one, it was 2016.

 

[Mr D]

If they have one signed then it's enforceable. Some banks appear to try it on to get money even if they do not have one.

If it's electronic then surely something should be on it.

Thinking back on dozens of electronic documents I have signed there is something on every one.
Banks not caught up with 21st century?

 

[Lisa Thomas]

I would think they need to prove you signed it electronically.

Have they given a copy with your electronic signature on it?

I had a similar issue a couple of years ago with estate agents who admitted they had no way of proving the electronic signature and it wouldn't be enforceable.

 

[Newchodge]

If you refuse to pay they would have to take you to court where the first thing they would have to do would be to prove that you made a legally binding agreement with them. It doesn't sound as if they can do that.

 

[Paul Kelly ICHYB]

If you signed it, surely you got a copy (before and after) via email?

 

[BusyBeeBee]

Thanks for your input everyone. This forum is so helpful.

The only copy (and saved in my bank online documents section) I have, and have ever had, is the unsigned offer letter. There are no dates or signatures or electronic stamps. I’ve asked for a copy several times and they just keep sending the blank offer letter.

The bank say to contact the Financial Ombudsman if I don’t agree with their decision that I am liable to pay under the personal guarantee but I think i would prefer the court.

Shall I write to the bank again to request releasing the alleged liability and if they don’t to take me to court?

 

[Paul Kelly ICHYB]

The only copy (and saved in my bank online documents section) I have, and have ever had, is the unsigned offer letter.

This is VERY different to what you have said before i.e. blank offer letter.

I am not a solicitor, but, if you accepted the offer by taking the overdraft that might be seen as tacit agreement. Does it mention guarantors?

 

[BusyBeeBee]

It isn’t, the offer letter is the overdraft agreement. It’s not signed by the company or the guarantor.

 

[Paul Kelly ICHYB]

But did you take up the facility this letter offered?

 

[BusyBeeBee]

Personally no, the company and me are different entities. The company has been dissolved. It’s the personal guarantee that is being disputed.

 

[Mr D]

From what I recall in the ones I've seen, a personal guarantee is spelled out. Often on its own sheet of paper.

 

[Paul Kelly ICHYB]

Ok, then. If there is nothing mentioning a PG in the letter and you have not received anything about a PG, you may be in the clear, HOWEVER, I would seek legal advice.

 

[UK Contractor Accountant]

how much was the facility? - there is normally a bank limit on which they insist on PG's.

 

[BusyBeeBee]

£25k but they are claiming £14k. It’s not really the amount, it’s whether it enforceable as the bank is unable to provide a signed PG.

 

[UK Contractor Accountant]

would definitely needed a PG for a £25K facility.

I would be surprised if Barclays cant produce anything to prove its case.

 

[Mr D]

would definitely needed a PG for a £25K facility.

I would be surprised if Barclays cant produce anything to prove its case.

Unless they have lost it.
Or never had it in the first place.

More than once have heard of banks trying it on when they cannot produce the paperwork to back up their claim.

 

[UK Contractor Accountant]

The Statute of Frauds 16772 stipulates that a guarantee must be in writing and signed by the guarantor or a person authorised by it in order to be effective.

Historically, this was to protect against liability attaching to informal communications which may be given without sufficient consideration or expressed ambiguously. Although guarantees are often executed as deeds to overcome any argument about this, recent court decisions have recognised that a series of documents (including emails) is now capable of forming a guarantee.

The name of the guarantor in an email, where there is both an intention that it is a signature and an intention to contract, will constitute a signature for this purpose.3

 

[BusyBeeBee]

So why are they not producing it? Surely they would if they had it and they want £14k. I’ve asked them several times over the last 12 months and each time they provide the same unsigned/undated document. There is no email chain or letter that I am aware of that can be used in court to prove the PG.

 

[UK Contractor Accountant]

Barclays had a habit of burying a short form guarantee in the tiny terms and conditions part of the facility letter.

As you say if they are not producing any evidence to support their claim under the PG then call their bluff and let it go to DCA or court.

 

[Lisa Thomas]

Sounds to me like you may have good grounds to challenge the PG.

 

[mariobucolo]

Hi @BusyBeeBee I have exact the same case, 2016 overdraft to an Ltd directed by me, 19K and now Barclays ask for the entire amount wrote me a letter that there is my PG.

 

[mariobucolo]

@BusyBeeBee I can't message you but I hope you can to stay in touch and fight together.
For the other please, I already read that need a signature in writing but the problem is to understand if - for overdraft - an electronic signature, can be considered valid or not and in any case if there is lack of information to alert about the PG activation.

 

[Gavin Bates]

Hi

I would reply and say they have not provide evidence of it being signed electronically or otherwise and also take it to the financial ombudsman because the bank would have demonstrate that they have been fair. If your correspondence shows that you have asked for confirmation on a signed PG because you don’t remember signing one then the ombudsman won’t be impressed.

it also bus you more time as they won’t pass it to debt collectors if the ombudsman is involved.

Regards

Gavin

 

[MBE2017]

I would also add to Gavins advice above that they do not take any further action regarding the alleged debt since they have not provided any evidence that you are liable.

The courts will take a very dim view if they proceed with anything until such a basic request is satisfied, whether you agree with any such evidence is another matter.

I would recommend talking to a specialist in such law cases, the least any personal guarantee should communicate is what you are guaranteeing, your liability, date, set out as a prescribed document, ie named as such and so on, plus how to take the offer up or reject it. From what you have said so far you might indeed have a decent case, but a lawyer is the next obvious step.

 

[mariobucolo]

@BusyBeeBee that request has already affect your credit score? It's one of my worries.

 

[eteb3]

Statute of Frauds 16772 stipulates that a guarantee must be in writing

Strictly speaking, the agreement itself doesn't have to be in writing (although obvs that will suffice); it's sufficient that there is a written record of the agreement, perhaps after the agreement has been concluded orally or by conduct. But whichever the written document is, it must be signed by the guarantor, or by someone they've authorised:
https://www.legislation.gov.uk/aep/Cha2/29/3/section/IV

Any which way, they can't enforce it without something in writing.

Have you tried a subject access request under GDPR? By law they must hand over all the data they have on you: if they don't turn over a guarantee document, then they can't very well insist they have one, bc that would be admitting they're breaking data protection law.

If you go through the Ombudsman, it looks like you can still go to court if you disagree with their decision: https://www.financial-ombudsman.org.uk/consumers/expect

I don't know, but I don't suppose there are costs awards with the Ombudsman if you lose; but if you lose with the Ombudsman and try in court and lose there, I imagine ignoring the Ombudsman's decision may count against you in a costs award by the court.

 

[mariobucolo]

Hi thanks for the answer, in my case (and I suppose in the same case of who start the discussion) I don't had any contact with anyone in the bank, neither in person or by phone, just apply to the offer of the overdraft as appear online when I browse the statements.
The problem is they can consider the e-signature (identified for example by the pin sentry) good enough to be valid as a PG even was not enough specified during the online application? The Ombudsman and/or the Court can allow to the bank to don't be clear in the proposal, easy to fill online and based only to an e-signature in case of a PG on an overdraft? This is the main point.
thanks a lot.

 

[fisicx]

If that is the case the document they produce will be time stamped with a verified e-signature showing your agreement (you would have had to check an agreement box on the online form).