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Billmccallum
Unfortunately, too many people rushed to get loans under EFG, but if anyone actually took the time to read the detail, they would have seen this, although probably not as clearly put.
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efg loan default
- Thread starter jaypum
- Start date
Unfortunately, too many people rushed to get loans under EFG, but if anyone actually took the time to read the detail, they would have seen this, although probably not as clearly put.
"Very well put Alan, this should make things clear for those who have been confused.
Unfortunately, too many people rushed to get loans under EFG, but if anyone actually took the time to read the detail, they would have seen this, although probably not as clearly put"
Not in my case..never heard of an EFG happy with overdraft and pg against it...have the assets to more than match the overdraft couldn't see the problem...it was the bank who suggested that we use the EFG to part pay off the overdraft...met with accountant and bank manager who explained how it would work particularly in relation to the 25% personal liability cap which would be paid for by the 2% premium ( amounting to nearly £20k over the loan period ) so on the basis of that meeting was happy for the bank to proceed with the EFG loan...didn't think anymore about it until they tried to take a charge on my house to keep the rest of the overdraft.
I'm happy perfectly happy to be liable for every penny I borrow fairly but when i'm told something that's not right and its going to cost me over £20k for no reason that makes me not so happy. The banks may use "Caveat Emptor" as a get out but when you're sold something face to face with a witness and take it to be true...aren't you supposed to trust your bank manager?
Unfortunately, too many people rushed to get loans under EFG, but if anyone actually took the time to read the detail, they would have seen this, although probably not as clearly put"
Not in my case..never heard of an EFG happy with overdraft and pg against it...have the assets to more than match the overdraft couldn't see the problem...it was the bank who suggested that we use the EFG to part pay off the overdraft...met with accountant and bank manager who explained how it would work particularly in relation to the 25% personal liability cap which would be paid for by the 2% premium ( amounting to nearly £20k over the loan period ) so on the basis of that meeting was happy for the bank to proceed with the EFG loan...didn't think anymore about it until they tried to take a charge on my house to keep the rest of the overdraft.
I'm happy perfectly happy to be liable for every penny I borrow fairly but when i'm told something that's not right and its going to cost me over £20k for no reason that makes me not so happy. The banks may use "Caveat Emptor" as a get out but when you're sold something face to face with a witness and take it to be true...aren't you supposed to trust your bank manager?
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I think the point is that many people relied on what their banker was telling them and either didn't read or really go into the detail of the small print. This is an observation, not a criticism: you should be able to rely on representations made by your bank's staff, and the courts have been fairly willing over the years to find in favour of clients who have been mis-sold products or improperly induced to sign documentation highly prejudicial to them. The banks have been made to pay recently in certain other situations where they failed to exercise adequate professionalism or in some cases, it appears, actively or negligently misled customers, forged documentation etc. I also think that many professional advisers, including accountants, fell into the trap of believing the guarantee was in favour of the borrower's liability, rather than the lender's shortfall.
Under the Small Firms Loan Guarantee Scheme, which the EFG scheme replaced, the guarantee actually operated on the same basis. I quote from the SFLG Annual Report 2006-7, published by BIS' predecessor, BERR:
What remains is the question of what people should do if they consider they were misled by their bank when giving a guarantee in respect of an EFG-backed loan. The legal technicalities are too many and too complicated to be argued here however if sufficient numbers are sufficiently aggrieved, one would have thought they could find a lawyer prepared to take on a test case on the back of which they could all hitch a ride.
Under the Small Firms Loan Guarantee Scheme, which the EFG scheme replaced, the guarantee actually operated on the same basis. I quote from the SFLG Annual Report 2006-7, published by BIS' predecessor, BERR:
"Under the terms of the guarantee, if the borrower of an SFLG-backed loan defaults on its obligations to the lender then under the terms of the guarantee the lender is entitled to claim a proportion of the amount lost [my italics] from BERR."
It is my recollection (which I believe this bears out) that even under the SFLGS the guarantee only ever extended to the shortfall suffered by the bank.
What remains is the question of what people should do if they consider they were misled by their bank when giving a guarantee in respect of an EFG-backed loan. The legal technicalities are too many and too complicated to be argued here however if sufficient numbers are sufficiently aggrieved, one would have thought they could find a lawyer prepared to take on a test case on the back of which they could all hitch a ride.
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Well put Alan,
google a web page from Peter Ibbetson who in part 2 of his Q & A on securing bank loans and as the web page states reports directly to Stephen Hester.
Interesting that even the man who reports to the head of the RBS when asked about security by Robert Copping he replied "We generally ask for a 25% guarantee on that basis. Many other banks will ask for a 100% directors guarantee. We think 25% is normally enough"
This is right at then time I was stupid enough to listen to the bank over the EFG loan. It seems their belief regarding security is only to take a charge for 25% as implying that the other 75% is guaranteed and not as suggested that the borrower is fully liable...very confusing isn't it and maybe not quite so cut and dry.
We should instigate a class action over the use of the EFG loan and how it was sold the loan is either guaranteed or it isn't..no grey area's.
Is their any good lawyers that are willing to take the case on I wonder or are they all tied up in the lucrative libor swap claims that are about to hit the banks?
google a web page from Peter Ibbetson who in part 2 of his Q & A on securing bank loans and as the web page states reports directly to Stephen Hester.
Interesting that even the man who reports to the head of the RBS when asked about security by Robert Copping he replied "We generally ask for a 25% guarantee on that basis. Many other banks will ask for a 100% directors guarantee. We think 25% is normally enough"
This is right at then time I was stupid enough to listen to the bank over the EFG loan. It seems their belief regarding security is only to take a charge for 25% as implying that the other 75% is guaranteed and not as suggested that the borrower is fully liable...very confusing isn't it and maybe not quite so cut and dry.
We should instigate a class action over the use of the EFG loan and how it was sold the loan is either guaranteed or it isn't..no grey area's.
Is their any good lawyers that are willing to take the case on I wonder or are they all tied up in the lucrative libor swap claims that are about to hit the banks?
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Alan,
I've taken an extract off a letter from my bank....if anyone out there could advise how they read it that would be great....This is a paragraph taken off a bank headed paper explaining the current guarantee's.
I've taken an extract off a letter from my bank....if anyone out there could advise how they read it that would be great....This is a paragraph taken off a bank headed paper explaining the current guarantee's.
Take a guarantee to cover the 25% element of the EFO loan. However having checked with
my legal department on this point, they advised me that this has to be a £142,000 Guarantee
in order to match the loan amount balance at the date of the amendment. This requirement
apparently is so as not to prejudice the government's position. Clearly we can only call
upon the non EFG backed part of this loan under this guarantee in a default situation.
Whilst the guarantee would be for £142,000, your liability to the Bank would be 25% of the
EFG loan balance.my legal department on this point, they advised me that this has to be a £142,000 Guarantee
in order to match the loan amount balance at the date of the amendment. This requirement
apparently is so as not to prejudice the government's position. Clearly we can only call
upon the non EFG backed part of this loan under this guarantee in a default situation.
Whilst the guarantee would be for £142,000, your liability to the Bank would be 25% of the
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businessfunding
I am generally unsympathetic to those who sign guarantees and try to wriggle out of them but I do believe that the EFG situation was grossly miss-sold.
By way of explanation rather than excuse, it was misrepresented by Government who launched the scheme in a blaze of publicity than mired it with red tape and caveats - a topic I covered some time ago in this blog post.
If you have received promises in writing there is a realistic chance that the bank will roll over just to save themselves embarrassment though it still boils down to the all-important rule - RTFC!
By way of explanation rather than excuse, it was misrepresented by Government who launched the scheme in a blaze of publicity than mired it with red tape and caveats - a topic I covered some time ago in this blog post.
If you have received promises in writing there is a realistic chance that the bank will roll over just to save themselves embarrassment though it still boils down to the all-important rule - RTFC!
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If you have received promises in writing there is a realistic chance that the bank will roll over just to save themselves embarrassment though it still boils down to the all-important rule - RTFC!
Thanks, not sure what RTFC means but would presume something like read the full contract or something similar. Interesting with the swap scandal the term sophisticated and unsophisticated makes a big play.
I've got my contracts for the loan but nowhere does it mention the DTI guarantee other than in the securities schedule alongside my pg and debenture.
I'm not trying to get out of any pg's just don't like getting conned.
I was told how it would work by by bank manager in front of my accountant...once signed up was transferred to another bank manager who wanted to reorganise my pg's as i had one inplace for the overdraft for £245k however the loan was only for £150k. The extract was taken from the second manager who wanted to also get a charge on our home for the remaining overdraft. One person explaining how it would works at the bank is one thing but someone else reinforcing the belief in writting a number of months later should help my case....not with the bank though i've taken my complaint to the highest level had an MP involved lots of writing evidence the bank don't want to know....yet but i wont give up on it.
ps we haven't defaulted on the loan its all up to date we have work ahead of us just got the bit between my teeth over the miss selling
Thanks, not sure what RTFC means but would presume something like read the full contract or something similar. Interesting with the swap scandal the term sophisticated and unsophisticated makes a big play.
I've got my contracts for the loan but nowhere does it mention the DTI guarantee other than in the securities schedule alongside my pg and debenture.
I'm not trying to get out of any pg's just don't like getting conned.
I was told how it would work by by bank manager in front of my accountant...once signed up was transferred to another bank manager who wanted to reorganise my pg's as i had one inplace for the overdraft for £245k however the loan was only for £150k. The extract was taken from the second manager who wanted to also get a charge on our home for the remaining overdraft. One person explaining how it would works at the bank is one thing but someone else reinforcing the belief in writting a number of months later should help my case....not with the bank though i've taken my complaint to the highest level had an MP involved lots of writing evidence the bank don't want to know....yet but i wont give up on it.
ps we haven't defaulted on the loan its all up to date we have work ahead of us just got the bit between my teeth over the miss selling
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Bricklayer, the letter from your bank clearly confirms to me that they simply didn't (don't?) understand how the EFG loan works. To say:
is obviously nonsense on any sensible construction of the EFG terms. This is borne out by the comments made in the first part of Peter Ibbetson's reply to the question about the 25% not covered by the guarantee.
On a technical point, although they are frequently used in the USA, "class actions" in English law are rare and there are limitations as to when they can be used: my understanding is that what usually happens is that one person with a representative claim takes action, often supported by others with similar claims who contribute towards the costs; and if successful, the remainder simply make claims against the defendant who caves in and settles. I am not sure who bears the risk for adverse costs in a US class action but generally the claimant and the claimant only is on risk in England.
There is a solicitor called Clare Kaudeur who sometimes posts here under the name Clarkmans. I understand Clare has advised on a number of these matters. Here is a link to her website - I know she'd be happy to offer some free initial advice.
"Clearly we can only call upon the non EFG backed part of this loan under this guarantee in a default situation. Whilst the guarantee would be for £142,000, your liability to the Bank would be 25% of the EFG loan balance."
On a technical point, although they are frequently used in the USA, "class actions" in English law are rare and there are limitations as to when they can be used: my understanding is that what usually happens is that one person with a representative claim takes action, often supported by others with similar claims who contribute towards the costs; and if successful, the remainder simply make claims against the defendant who caves in and settles. I am not sure who bears the risk for adverse costs in a US class action but generally the claimant and the claimant only is on risk in England.
There is a solicitor called Clare Kaudeur who sometimes posts here under the name Clarkmans. I understand Clare has advised on a number of these matters. Here is a link to her website - I know she'd be happy to offer some free initial advice.
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The original premise of the EFG was to encourage banks to lend in situations where they were comfortable with the business but insufficient security was available.
They cannot take charges on the family home under the scheme.
Ultimately, it depends what type of security you are talking.
Thanks for the reply kickstartbtm,
At the time of the EFG both myself and my wife were directors of the business with circa £180k equity in our main house. We also own a second property with circa £170 equity in it....my bank manager told me when I sent in our A & L statement once he saw the second property to remove it as with it on we wouldn't qualify for the EFG. I didn't benefit from the EFG all that happened was our overdraft was part paid off and then reduced we never saw any cash come into the account.
They cannot take charges on the family home under the scheme.
Ultimately, it depends what type of security you are talking.
Thanks for the reply kickstartbtm,
At the time of the EFG both myself and my wife were directors of the business with circa £180k equity in our main house. We also own a second property with circa £170 equity in it....my bank manager told me when I sent in our A & L statement once he saw the second property to remove it as with it on we wouldn't qualify for the EFG. I didn't benefit from the EFG all that happened was our overdraft was part paid off and then reduced we never saw any cash come into the account.
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Hi guys. Really interested in the debate that has been going on, not least of which is because I too have an EFG loan. Started my business in 2011 with an EFG loan of £30,000 with 12 months repayment holiday (having put in another £30K myself). Repayments started a year later with an overall term of five years including the repayment holiday period. Fortunately, I am not yet in danger of winding up the business, however I may be bringing a different view to the table - NOT SURE???
My understanding is that whilst I am the sole Director, a company is a separate legal entity as declared in law (Salomen v Salomen and Co Ltd 1878?). Therefore, as a Director I am not personally liable for the companies debts (depending on whether my Directorship is limited by shares or guarantee etc). This is why banks require personal guarantees - to tie you in to the debt. Therefore, surely my liability is determined by the guarantee rather than any other means.
When the bank explained the EFG scheme to me (NatWest) it was under the impression that I was only liable for 25% of the original amount - i.e. I would be liable for the first £7,500, and they would come to me first for up to that amount irrespective of the outstanding amount - i.e. if £8,000 was outstanding I would have to pay £7,500, but if £4,000 was outstanding that would be the amount relied upon. As such the £7,500 was written into my guarantee. I cannot therefore see how the bank can come back to me for anything more than this amount!! If I am right, then surely what is important is whether the guarantee is limited or not?
Any thoughts
My understanding is that whilst I am the sole Director, a company is a separate legal entity as declared in law (Salomen v Salomen and Co Ltd 1878?). Therefore, as a Director I am not personally liable for the companies debts (depending on whether my Directorship is limited by shares or guarantee etc). This is why banks require personal guarantees - to tie you in to the debt. Therefore, surely my liability is determined by the guarantee rather than any other means.
When the bank explained the EFG scheme to me (NatWest) it was under the impression that I was only liable for 25% of the original amount - i.e. I would be liable for the first £7,500, and they would come to me first for up to that amount irrespective of the outstanding amount - i.e. if £8,000 was outstanding I would have to pay £7,500, but if £4,000 was outstanding that would be the amount relied upon. As such the £7,500 was written into my guarantee. I cannot therefore see how the bank can come back to me for anything more than this amount!! If I am right, then surely what is important is whether the guarantee is limited or not?
Any thoughts
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businessfunding
If your guarantee stipulates £7500 then that is the limit of your personal liability (just guessing but it will probably state plus costs and charges). So yes, you are right. Most people signed open guarantees in the belief that they would only be called on for 25% of the balance. Which was never the case but was often misrepresented.
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From the government's documentation surrounding EFG not only was it unsuitable where the borrower had assets, it would be forbidden. It was quite clear that EFG was only applicable if the only thing stopping the bank from issuing a normal loan was the borrower's lack of security.
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From the government's documentation surrounding EFG not only was it unsuitable where the borrower had assets, it would be forbidden. It was quite clear that EFG was only applicable if the only thing stopping the bank from issuing a normal loan was the borrower's lack of security.
Interesting point Tom,
what if the bank knowing you had assets to cover the loan then asked you to remove it off your A & L statement so you would qualify for the EFG?
So not only was it miss sold they also asked us to lie on the application?
Interesting point Tom,
what if the bank knowing you had assets to cover the loan then asked you to remove it off your A & L statement so you would qualify for the EFG?
So not only was it miss sold they also asked us to lie on the application?
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Post,
as a member of the Institute of Directors on the LinkedIn message board the following discussion was started:-
If anyone's interested in sending Lawrence your experiences please private message me for his pa's contact details. The interesting thing here is the BIS have a big input in the EFG use.
Hi All,
I'd like to introduce myself as the Serial Entrepreneur in Residence at the Department for Business, Innovation and Skills. I was also named the IOD's Overall Director of the Year in Oct 2012.
As part of my role at BIS, I have been asked by the Secretary of State for Business Innovation and Skills to pull together a paper on how to improve access to finance. As part of this, I am looking at the data provided by banks- such as the statistic 9 in 10 applications are successful- as well as the banks' treatment of businesses and the lending conditions they impose. It has been suggested statistics have been distorted by the fact that a large number of businesses are put off before even applying for finance.
I'd be interested to hear your experiences, especially the treatment you have received by the banks and your views. I am happy to maintain anonymity, feel free to message me directly if you would prefer.
Kind regards,
Lawrence Tomlinson
as a member of the Institute of Directors on the LinkedIn message board the following discussion was started:-
If anyone's interested in sending Lawrence your experiences please private message me for his pa's contact details. The interesting thing here is the BIS have a big input in the EFG use.
Hi All,
I'd like to introduce myself as the Serial Entrepreneur in Residence at the Department for Business, Innovation and Skills. I was also named the IOD's Overall Director of the Year in Oct 2012.
As part of my role at BIS, I have been asked by the Secretary of State for Business Innovation and Skills to pull together a paper on how to improve access to finance. As part of this, I am looking at the data provided by banks- such as the statistic 9 in 10 applications are successful- as well as the banks' treatment of businesses and the lending conditions they impose. It has been suggested statistics have been distorted by the fact that a large number of businesses are put off before even applying for finance.
I'd be interested to hear your experiences, especially the treatment you have received by the banks and your views. I am happy to maintain anonymity, feel free to message me directly if you would prefer.
Kind regards,
Lawrence Tomlinson
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It would be fraud for them to ask you to do it, and fraud for you to agree. (lay opinion, I'm not a lawyer)
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It would be fraud for them to ask you to do it, and fraud for you to agree. (lay opinion, I'm not a lawyer) Yesterday 19:59It would be fraud for them to ask you to do it, and fraud for you to agree. (lay opinion, I'm not a lawyer) Yesterday 19:59It would be fraud for them to ask you to do it, and fraud for you to agree. (lay opinion, I'm not a lawyer)
Bingo Tom
However the term fraud "In criminal law, fraud is intentional deception made for personal gain"
Who was to gain from the fraud cetainly not me as all the bank did was convert the used funds from my overdraft into a loan. I was hapy with the overdraft and i'd signed a pg for the full amount. I sent an A & L liability to the bank via email with my full assets then a few days later at the request of the bank (by mobile) i sent another A & L with the assets on that they wanted to enable me to qualify for the loan. All the paperwork from that point was done by the bank so they had the choice of which A & L statement to use.
By proving fraud not only is it miss selling it could be covered under the Fraudulent Misrepresentation Act 1967 as the bank knowingly sold me a product that was unsuitable for my needs in a reckless act.
When questioning the bank over the manager requesting us to withhold an asset the bank said the asset was "in fact held in my wife name due to a recent death" which was crap and i've had them apologise in writing for their "oversight" by doing so they've admitted the fact that i was asked to withold an asset.
Tom at one stage early on in my complaint i was going to go to the police station to hand myself in over the fraud as i was that worried.
A barrister has now been appointed as i believe i have enough information in writing to go to court and let them decide.
As in many previous posts the use of the EFG by the banks has been heavily mis sold in relation to the government guarantee and what the directors would be personally liable for in the event of a default...not the business but the director who may have signed a historic pg which the bank has held onto.
Bingo Tom
However the term fraud "In criminal law, fraud is intentional deception made for personal gain"
Who was to gain from the fraud cetainly not me as all the bank did was convert the used funds from my overdraft into a loan. I was hapy with the overdraft and i'd signed a pg for the full amount. I sent an A & L liability to the bank via email with my full assets then a few days later at the request of the bank (by mobile) i sent another A & L with the assets on that they wanted to enable me to qualify for the loan. All the paperwork from that point was done by the bank so they had the choice of which A & L statement to use.
By proving fraud not only is it miss selling it could be covered under the Fraudulent Misrepresentation Act 1967 as the bank knowingly sold me a product that was unsuitable for my needs in a reckless act.
When questioning the bank over the manager requesting us to withhold an asset the bank said the asset was "in fact held in my wife name due to a recent death" which was crap and i've had them apologise in writing for their "oversight" by doing so they've admitted the fact that i was asked to withold an asset.
Tom at one stage early on in my complaint i was going to go to the police station to hand myself in over the fraud as i was that worried.
A barrister has now been appointed as i believe i have enough information in writing to go to court and let them decide.
As in many previous posts the use of the EFG by the banks has been heavily mis sold in relation to the government guarantee and what the directors would be personally liable for in the event of a default...not the business but the director who may have signed a historic pg which the bank has held onto.
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Kickstartbtm,
Id like to introduce myself as the Serial Entrepreneur in Residence at the Department for Business,
Kind regards,
Lawrence Tomlinson.
As a Memeber of the Institute Of Directors i have access to the Members only group on LinkedIn his introduction was pasted off the group however i take it you don't have access to this group just google him his net worth is only around £550m or google his name and put BIS alongside it.
Its no good people who post on this board doing nothing against the banks then complaining sometimes you have to take direct action...this may be one of those routes?? If someone from the BIS asks for experiences isn't it best to tell them whats been going on?
I posted this to help people if they choose to take it up so be it but i can assure you its for real
Id like to introduce myself as the Serial Entrepreneur in Residence at the Department for Business,
Kind regards,
Lawrence Tomlinson.
As a Memeber of the Institute Of Directors i have access to the Members only group on LinkedIn his introduction was pasted off the group however i take it you don't have access to this group just google him his net worth is only around £550m or google his name and put BIS alongside it.
Its no good people who post on this board doing nothing against the banks then complaining sometimes you have to take direct action...this may be one of those routes?? If someone from the BIS asks for experiences isn't it best to tell them whats been going on?
I posted this to help people if they choose to take it up so be it but i can assure you its for real
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Just had this email off Larwence's pa.
"Many thanks for sending me the details,
Please accept my apologies sooner, for some reason it went into my junk emails so i've only just seen it. Lawrence and I will look through this carefully and turn it into an anonymised case study.
Do you happen to know anyone else who has had similar experiences with the EFG? We've now heard a couple of stories so wondering if a pattern is emerging?
Kind regards
Fiona."
Well post is there a pattern emerging?
If you want to do something now may be the time...singular instances mean nothing multiple instances will get people to sit up and listen.
"Many thanks for sending me the details,
Please accept my apologies sooner, for some reason it went into my junk emails so i've only just seen it. Lawrence and I will look through this carefully and turn it into an anonymised case study.
Do you happen to know anyone else who has had similar experiences with the EFG? We've now heard a couple of stories so wondering if a pattern is emerging?
Kind regards
Fiona."
Well post is there a pattern emerging?
If you want to do something now may be the time...singular instances mean nothing multiple instances will get people to sit up and listen.
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Hello I am writing as I have never experienced or witnessed anything like that at the moment regardng Lloyds bank and the way they have behaved with regards to my husbands EFg loan.
He started a business, genuinely beliveving and committing to it but it did not work. He had taken an EFg for £30000 and was advised by 2 bank managers, who I might add visited his business for a little free fishing, that his liabilty was 25%. They also said it did not affect our home and that is why EFG was different for lending to small business at that time.
He has tried relentlessly to negotiate payments of approximately £300 each month, with a view to paying the entire amount borrowed but clearly over a longer time frame as he had then returned to paid employment. The bank closed the accounts and refused to accept any offer he made and he could not make payments of any kind with no access.
I have just found that the banks solicitors took him to court and he now has a CCJ. He did not know that this was happening. He was advised by the bank solicitors that it could be a course of action, as was pursuing our home but not that it was happening. He attempted to make the first payment as instructed and could not obtain the bank details from anyone as to where he should pay this. He tried to make 3 payments into account details he had. All bounced back. He finally managed to make the payment on the 11th June. As it turned out, due to the orchestrated delay he has now received a variation order demanding 7k forthwith. A family member has offered to help with this but I am nervous as to what we will receive next if we pay and will we lose the house if we dont. We have tried to sell the huose and currently I live in it as I have to commute 3 hours to work. We only own this 1 house.
The thing with this that I find absolutely despicable is that he is working hard and has is not in any way trying to avoid repayment.
I understand that if the bank exhaust all options then they can reclaim 75% from the government but this is wrong. Lloyds is supported by the taxpayer. As a taxpayer my husband is trying to take the responsibilty and pay back.
He also tried to preserve his credit rating in order that as a family mortgages remained an option.
I can see the physical effects of ill health now and it is wholly attributed to the bank opting for an unreasonable and aggressive stance in my opinion. I work as a health professional and am seeing this more and more.
He was advised his home being repossessed was prohibited under the terms or he could have taken a secured loan on it .
And if the terms of the loan could be 3 - 10 years. I do not understand why the loan payment schedule could not have been realigned to fit this with the offer he made of repayment.
How can issuing a CCJ against a working family man be benefical.
I dont want to sound dramatic but he has offered to pay and it is my feeling that this is a strategy used by the bank and which is unlikely to be an isolated case. Be aware. I am interested to see if Lawrence Tomlison has any input as I am sure that if this problem is not addressed small business and normal people will become more fearful of borrowing from what appear to be unscrupulous lenders due to the potential fall out.
Nothing is worth your health.
He started a business, genuinely beliveving and committing to it but it did not work. He had taken an EFg for £30000 and was advised by 2 bank managers, who I might add visited his business for a little free fishing, that his liabilty was 25%. They also said it did not affect our home and that is why EFG was different for lending to small business at that time.
He has tried relentlessly to negotiate payments of approximately £300 each month, with a view to paying the entire amount borrowed but clearly over a longer time frame as he had then returned to paid employment. The bank closed the accounts and refused to accept any offer he made and he could not make payments of any kind with no access.
I have just found that the banks solicitors took him to court and he now has a CCJ. He did not know that this was happening. He was advised by the bank solicitors that it could be a course of action, as was pursuing our home but not that it was happening. He attempted to make the first payment as instructed and could not obtain the bank details from anyone as to where he should pay this. He tried to make 3 payments into account details he had. All bounced back. He finally managed to make the payment on the 11th June. As it turned out, due to the orchestrated delay he has now received a variation order demanding 7k forthwith. A family member has offered to help with this but I am nervous as to what we will receive next if we pay and will we lose the house if we dont. We have tried to sell the huose and currently I live in it as I have to commute 3 hours to work. We only own this 1 house.
The thing with this that I find absolutely despicable is that he is working hard and has is not in any way trying to avoid repayment.
I understand that if the bank exhaust all options then they can reclaim 75% from the government but this is wrong. Lloyds is supported by the taxpayer. As a taxpayer my husband is trying to take the responsibilty and pay back.
He also tried to preserve his credit rating in order that as a family mortgages remained an option.
I can see the physical effects of ill health now and it is wholly attributed to the bank opting for an unreasonable and aggressive stance in my opinion. I work as a health professional and am seeing this more and more.
He was advised his home being repossessed was prohibited under the terms or he could have taken a secured loan on it .
And if the terms of the loan could be 3 - 10 years. I do not understand why the loan payment schedule could not have been realigned to fit this with the offer he made of repayment.
How can issuing a CCJ against a working family man be benefical.
I dont want to sound dramatic but he has offered to pay and it is my feeling that this is a strategy used by the bank and which is unlikely to be an isolated case. Be aware. I am interested to see if Lawrence Tomlison has any input as I am sure that if this problem is not addressed small business and normal people will become more fearful of borrowing from what appear to be unscrupulous lenders due to the potential fall out.
Nothing is worth your health.
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Hi I am in agreement with all on here that The EFG was strongly miss sold. I had a company and took out an EFG loan on the advice from our bank manager that it was our only option three of us signed a guarantee for the full amount (which was substantial) When I questioned our bank manager about the guarantee he said in front of one of my business partners that it was only incase one of us or the company did something fraudulent. This naively seemed like a reasonable answer and considering i had invested around £250k of my own money and about three years unpaid at the time into the business we didnt seem to have any other option.
The bank closed our account in 2011 and have been chasing me for the money ever since, I have been to the Financial Ombudsman and they have ruled against me. It has however bought me over a year of time so far and I am about to appeal which they have told me I am entitled to do, I would advise anyone who is being chased about an EFG loan miss selling to do the same. They monitor number of complaints of a certain type and may be in a position to raise the profile of this unjust practice, they I think were involved with the instigation of banks being forced to repay millions for miss selling of insurance on credit cards and loans ( I think). I also heard on the news recently that Lloyds our bank at the time has over 110,000 complaints cases being handled by the Financial Ombudsman the next nearest bank has around 80,000 cases. These are i am sure not all EFG cases but many will be so please contact them it is an easy process. first of all write a letter to your bank headed "Complaint" tell them why you are complaining for instance you feel you were miss sold the loan put as much detail in as you can, names dates etc what was said and why you felt that you were only liable for 25%. At the end of the letter ask them what your referral rights are under their complaints procedure and the Financial Ombudsman.
I would like to hear from anyone who is further down the road than me and what kind of settlement they made or at what stage the bank gave up? if they did.
Please feel free to private msg me if you have an efg loan that the bank have recalled and you feel you were miss sold. I would like to site as many cases as possible in my appeal to the ombudsman.
Apologies if I have rambled!
Kind regards DH
The bank closed our account in 2011 and have been chasing me for the money ever since, I have been to the Financial Ombudsman and they have ruled against me. It has however bought me over a year of time so far and I am about to appeal which they have told me I am entitled to do, I would advise anyone who is being chased about an EFG loan miss selling to do the same. They monitor number of complaints of a certain type and may be in a position to raise the profile of this unjust practice, they I think were involved with the instigation of banks being forced to repay millions for miss selling of insurance on credit cards and loans ( I think). I also heard on the news recently that Lloyds our bank at the time has over 110,000 complaints cases being handled by the Financial Ombudsman the next nearest bank has around 80,000 cases. These are i am sure not all EFG cases but many will be so please contact them it is an easy process. first of all write a letter to your bank headed "Complaint" tell them why you are complaining for instance you feel you were miss sold the loan put as much detail in as you can, names dates etc what was said and why you felt that you were only liable for 25%. At the end of the letter ask them what your referral rights are under their complaints procedure and the Financial Ombudsman.
I would like to hear from anyone who is further down the road than me and what kind of settlement they made or at what stage the bank gave up? if they did.
Please feel free to private msg me if you have an efg loan that the bank have recalled and you feel you were miss sold. I would like to site as many cases as possible in my appeal to the ombudsman.
Apologies if I have rambled!
Kind regards DH
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This is one reason why I think the banks are so aggressive, ta a look at www dot gov dot uk fwd slash government fwd slash
uploads fs system fs uploads fs attachment_data fs file fs 85761 fs 13-600-economic-evaluation-of-the-efg-scheme.pdf
this is a lengthy doc promoting the success of the EFG but the graph and text on this page show that of loans from 2009 to jan 2012.
" The estimated nominal gross default cost of the EFG loans drawn down in 2009 that did
not survive until January 2012 is £104.2m, with government exposure to 75 per cent of this
amount being £78.1m, but capped at £65.3m.51"
so the banks are around 13 mil down already on that basis.
uploads fs system fs uploads fs attachment_data fs file fs 85761 fs 13-600-economic-evaluation-of-the-efg-scheme.pdf
this is a lengthy doc promoting the success of the EFG but the graph and text on this page show that of loans from 2009 to jan 2012.
" The estimated nominal gross default cost of the EFG loans drawn down in 2009 that did
not survive until January 2012 is £104.2m, with government exposure to 75 per cent of this
amount being £78.1m, but capped at £65.3m.51"
so the banks are around 13 mil down already on that basis.
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Many thanks for your replies it is somewhat reassuring, sadly, to know that it wasnt only us that believed and trusted the bank managers having been customers for over 20 years.
We have registered complaints with both the Ombudsman and the bank but Lloyds have always been extremely evasive, never responding or passing us from one department to another with no result, something which forms part of the complaint and which I understand is common practice for them.
I understand too that they want to recoup the money, as it appears that the quicker they demonstrate this the more viable the potential sale of Lloyds becomes. And if they claim they have exhausted all avenues the government repay some shortfall so there is much to be gained from the aggressive stance.
However, I still dont see how it can be right.
To let you know he did engage with Clare Kardeur for advice as mentioned in a previous post but she must be extremely busy as he never obtained any timely response. It did cost £300 400.
We wish anyone in this position the best of luck and the more that come forward then hopefully the more likely some redress may be. We never expected this situation from the advice received at the outset. And I apologise for going on.
Note the Article in the Telegraph on 1st Aug re Lawrence Tomlinson
We have registered complaints with both the Ombudsman and the bank but Lloyds have always been extremely evasive, never responding or passing us from one department to another with no result, something which forms part of the complaint and which I understand is common practice for them.
I understand too that they want to recoup the money, as it appears that the quicker they demonstrate this the more viable the potential sale of Lloyds becomes. And if they claim they have exhausted all avenues the government repay some shortfall so there is much to be gained from the aggressive stance.
However, I still dont see how it can be right.
- They missold the product in the first place and then ignored every effort made to reach agreement to repay the money at an affordable amount.
- They proceeded to take court action after the solicitor threatened that unless my husband signed a form to pay £500 each month they were pursuing the house, and which we were told they could not do. He signed that form and they were then successful in obtaining a CCJ despite him always offering to repay the full amount over time. He then received a further judgement as they demanded a further 7k or enforcement was the next step. The fact they threatened him regarding the house to me is just unethical.
To let you know he did engage with Clare Kardeur for advice as mentioned in a previous post but she must be extremely busy as he never obtained any timely response. It did cost £300 400.
We wish anyone in this position the best of luck and the more that come forward then hopefully the more likely some redress may be. We never expected this situation from the advice received at the outset. And I apologise for going on.
Note the Article in the Telegraph on 1st Aug re Lawrence Tomlinson
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thanks havehadenough for your post...i missed the Telegraph article but i notice kickstartm hasn't been back on.
As a contributor to the report that he handed to the BIS i'm particularly happy about the comments.
So much so that the bank want to meet with me to discuss a resolution to my complaint against them.
If enough people come out it will force a review i'd urge everyone here to contact Ian Griffiths from the Guardian to give him your experiences as he's about to do an article on the EFG.
As a contributor to the report that he handed to the BIS i'm particularly happy about the comments.
So much so that the bank want to meet with me to discuss a resolution to my complaint against them.
If enough people come out it will force a review i'd urge everyone here to contact Ian Griffiths from the Guardian to give him your experiences as he's about to do an article on the EFG.
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sorry for not replying with this sooner,just thought i would let you guys know the outcome of my situation if you guys are interested.
after arguing my case, the bank conceeded that whilst it was possible i may have been mislead the contract was clear ,however they agreed to reducing my liability to 25% of the outstanding balance which amounted to £11,250 . I then countered with an offer of £5150 and have now setteled.
it does show that taking a stance can and often does work.
for me it has taken a big chunk out of mine and my familys life but we can finally move forward and put this nightmare behind us.
great thread for those people who are only trying their best to earn a crust and are being shafted by the banks.
gla .
regards tzz
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Well done twozuluzulu,
its good to see a positive resolution...which bank were you with?
I dont think that the banks would want any mis selling of the EFG's to get to court.
In the case of the sawps the banks arte holding fact finding meetings to see who has a case against the banks if they find they have they are more likely to do a deal before it gets to court. Only the weak cases have got to court too date as once one wins it sets the precident as in the ppi case and look how much that cost the banks!!
I've had a meeting with my bank and awaiting their response before i decide on my next course of action.
its good to see a positive resolution...which bank were you with?
I dont think that the banks would want any mis selling of the EFG's to get to court.
In the case of the sawps the banks arte holding fact finding meetings to see who has a case against the banks if they find they have they are more likely to do a deal before it gets to court. Only the weak cases have got to court too date as once one wins it sets the precident as in the ppi case and look how much that cost the banks!!
I've had a meeting with my bank and awaiting their response before i decide on my next course of action.
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Hello,
its really good to hear regarding positive outcomes. I've been revisiting old paperwork and what seems interesting to me is that the papers presented to the courts do not seem to indicate that the loan is underwritten by the goernemnt but clearly state it as a business loan per se.
I also found papers that the bank maangers got me to sign (11 days after I had had my baby who was present) that clearly indicate the loan was apparently mine and my husbands. Yet the subsequent paperwork was all issued in his name.
Never at any point had we indicated that I was involved in the business as he was a sole trader.
I feel duped as if I hadnt signed maybe they wouldn't have ben able to pursue him to the point of ill health.
Also if the loan was based on the terms of the EFG is this government legislated or individual bank legislated as massive discrepancies between banks resolutio are now appearing. If one settles and one pursues CCJs for loans adminsitered under the same scheme and the same principles.
its really good to hear regarding positive outcomes. I've been revisiting old paperwork and what seems interesting to me is that the papers presented to the courts do not seem to indicate that the loan is underwritten by the goernemnt but clearly state it as a business loan per se.
I also found papers that the bank maangers got me to sign (11 days after I had had my baby who was present) that clearly indicate the loan was apparently mine and my husbands. Yet the subsequent paperwork was all issued in his name.
Never at any point had we indicated that I was involved in the business as he was a sole trader.
I feel duped as if I hadnt signed maybe they wouldn't have ben able to pursue him to the point of ill health.
Also if the loan was based on the terms of the EFG is this government legislated or individual bank legislated as massive discrepancies between banks resolutio are now appearing. If one settles and one pursues CCJs for loans adminsitered under the same scheme and the same principles.
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Well done Twozuluzulu
As said already it is good to hear of a rightful outcome I am in touch with both Bricklayer and Havehadenough ( although I've been v busy lately so need to catch up with them) I am gathering information/ people for Ian Griffiths a journalist for the Guardian who are in the same situation with the banks regarding the EFG. He is going to publish a story later in the year re the mis selling of the loan and I think it would be good if you would allow your experience to be part of it. We hope to generate much interest through the article and get more people to come forward so the banks have to listen. Would you be interested?
Regard David Hunt
As said already it is good to hear of a rightful outcome I am in touch with both Bricklayer and Havehadenough ( although I've been v busy lately so need to catch up with them) I am gathering information/ people for Ian Griffiths a journalist for the Guardian who are in the same situation with the banks regarding the EFG. He is going to publish a story later in the year re the mis selling of the loan and I think it would be good if you would allow your experience to be part of it. We hope to generate much interest through the article and get more people to come forward so the banks have to listen. Would you be interested?
Regard David Hunt
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I was missold an EFG by Lloyds TSB Eastern Branch. they told me that the security I provided was for 20% of the loan and that the Gov would guarantee 80% (sic). They took over 5 months to provide the loan which was too late to save the company now they are refusing to claim from the Gov and are coming after me for the 100% of the loan. I want to complain about this did you, if so with what result?
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Re: URN 09/1594 "Early Stage Assessment of the Impact of the Enterprise Finance Guarantee (EFG) On Recipient Firms" (2009
Re: The "Economic Evaluation of the Enterprise Finance Guarantee (EFG) scheme. February 2013"
These two reports show that 64% of the businesses that were successful in obtaining an EFG loan in 2009 (that were not aware of the EFG scheme prior to approaching their lender) didn't have the terms or consequences of the EFG explained to them properly. They were not told that they would be 100% liable for the loan.
Read together, they show that at least 30% of businesses were not told that they would be 100% liable for the loan. That's 30% of a sample of 385 or 115.
In fact it's much worse than that because page 21 of the 2009 report shows that at least 53% of businesses were already aware of the EFG scheme prior to approaching their lender. Hence 47% or 181 were ignorant of the EFG scheme.
Thus it is reasonable to assume that 115 businesses out of the 181 that were ignorant of the EFG prior to approaching their lender were not told that they would be 100% liable for the loan. i.e. 64%.
30% represents about 2,000 businesses out of 7,000 businesses (the exact number for September 2009 is not specified) that received EFG funding in 2009.
Page 31 of the 2013 Report says that 7 out of ten businesses were told that they were 100% liable by the banks/lenders. That means that 30% complained that they were not. Presumably those that were not aware represented were part of the 47% who knew nothing about the EFG scheme prior to approaching their lender. 47% of 385 businesses that were interviewed is 180 businesses.
Page 2, paragraph 1 of the 2009 Report - 37 accredited lenders provided EFG backed loans to 7,100 businesses up to 16th December 2009
Page 5, paragraph 3 of the 2009 Report - interviews were drawn from companies that received an EFG loan between the 1st March 2009 and the 3rd September 2009.
Page 5, paragraph 5 of the 2009 Report - 385 businesses interviewed as part of the survey between September and early October 2009 - The businesses are representative of all businesses up until the start of September 2009.
I thought that you and your members might be interested in the 2 attachments. Those that have been bitten are not just the unfortunate few.
Re: The "Economic Evaluation of the Enterprise Finance Guarantee (EFG) scheme. February 2013"
These two reports show that 64% of the businesses that were successful in obtaining an EFG loan in 2009 (that were not aware of the EFG scheme prior to approaching their lender) didn't have the terms or consequences of the EFG explained to them properly. They were not told that they would be 100% liable for the loan.
Read together, they show that at least 30% of businesses were not told that they would be 100% liable for the loan. That's 30% of a sample of 385 or 115.
In fact it's much worse than that because page 21 of the 2009 report shows that at least 53% of businesses were already aware of the EFG scheme prior to approaching their lender. Hence 47% or 181 were ignorant of the EFG scheme.
Thus it is reasonable to assume that 115 businesses out of the 181 that were ignorant of the EFG prior to approaching their lender were not told that they would be 100% liable for the loan. i.e. 64%.
30% represents about 2,000 businesses out of 7,000 businesses (the exact number for September 2009 is not specified) that received EFG funding in 2009.
Page 31 of the 2013 Report says that 7 out of ten businesses were told that they were 100% liable by the banks/lenders. That means that 30% complained that they were not. Presumably those that were not aware represented were part of the 47% who knew nothing about the EFG scheme prior to approaching their lender. 47% of 385 businesses that were interviewed is 180 businesses.
Page 2, paragraph 1 of the 2009 Report - 37 accredited lenders provided EFG backed loans to 7,100 businesses up to 16th December 2009
Page 5, paragraph 3 of the 2009 Report - interviews were drawn from companies that received an EFG loan between the 1st March 2009 and the 3rd September 2009.
Page 5, paragraph 5 of the 2009 Report - 385 businesses interviewed as part of the survey between September and early October 2009 - The businesses are representative of all businesses up until the start of September 2009.
I thought that you and your members might be interested in the 2 attachments. Those that have been bitten are not just the unfortunate few.
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Morning Andrewb1,
more good information over the EFG miss selling.
My advice is raise as much of your profile to anyone who's got an interest be it the CfEL, the BIS the banks your local MP, the press etc.
I'm still waiting for Ian Griffiths from the Guardian to publish my story but the more people who raise it the better.
The FOS are toothless as they will not change policy and would probably rule in favour of the banks but it may be worth a try?
Try to get the best legal advice you can get but i wouldn't advise on any of the ones who are suggested on this board but if you do make sure you have your credit card handy as they wont speak to you unless they've been paid...no free initial advice!!?
I've sent emails to Panorama, Watchdog and Dispatches so that may be worth a try to see if they take up our stories?
Did the bank ask for a full pg or any security on your house?
Thanks
Bricklayer
more good information over the EFG miss selling.
My advice is raise as much of your profile to anyone who's got an interest be it the CfEL, the BIS the banks your local MP, the press etc.
I'm still waiting for Ian Griffiths from the Guardian to publish my story but the more people who raise it the better.
The FOS are toothless as they will not change policy and would probably rule in favour of the banks but it may be worth a try?
Try to get the best legal advice you can get but i wouldn't advise on any of the ones who are suggested on this board but if you do make sure you have your credit card handy as they wont speak to you unless they've been paid...no free initial advice!!?
I've sent emails to Panorama, Watchdog and Dispatches so that may be worth a try to see if they take up our stories?
Did the bank ask for a full pg or any security on your house?
Thanks
Bricklayer
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I am caught in this EFG turmoil, my understanding of the product was that I was only liable for 25% of the outstanding loan .... now after the business fails I am being persued for the full amount
The HSBC website still indictes the loan is 75% backed by the government ... in itself miss leading I will push on with my complaint and fight in court if needed , any good solicitors or support gratefully accepted
The HSBC website still indictes the loan is 75% backed by the government ... in itself miss leading I will push on with my complaint and fight in court if needed , any good solicitors or support gratefully accepted
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Hello id99999uk,
welcome to the board,
I've lived and breathed this scandal for the last nearly two years. We are still trading and up to date with the premiums and loan repayments so you may ask what's the problem?
Sometimes you have to stand up on a principal and say I've been taken the piss out of so someone's going to pay as in our case they have nearly destroyed our business by taking off all our facilities after the loan was drawn down...a government backed loan designed to help enterprises...yeh right!
Get 10 bankers in a room and ask them to explain the EFG and you'll get 10 different answers..its like Chinese whispers regarding the 25% guarantee..heavily sold that you'd only be liable for 25% as you pay a premium to cover the guarantee..in reality we make you bankrupt first then we collect on our guarantee.
You pay a insurance premium to cover you if you need it then it doesn't payout..hang on isn't this like PPI. Only this one involves the banks and the government.
The best thing to do is raise your profile...email your MP email the BIS, the CfEL, email the press, obtain any legal advice..research the internet do anything but nothing
Keep us informed
Bricklayer
welcome to the board,
I've lived and breathed this scandal for the last nearly two years. We are still trading and up to date with the premiums and loan repayments so you may ask what's the problem?
Sometimes you have to stand up on a principal and say I've been taken the piss out of so someone's going to pay as in our case they have nearly destroyed our business by taking off all our facilities after the loan was drawn down...a government backed loan designed to help enterprises...yeh right!
Get 10 bankers in a room and ask them to explain the EFG and you'll get 10 different answers..its like Chinese whispers regarding the 25% guarantee..heavily sold that you'd only be liable for 25% as you pay a premium to cover the guarantee..in reality we make you bankrupt first then we collect on our guarantee.
You pay a insurance premium to cover you if you need it then it doesn't payout..hang on isn't this like PPI. Only this one involves the banks and the government.
The best thing to do is raise your profile...email your MP email the BIS, the CfEL, email the press, obtain any legal advice..research the internet do anything but nothing
Keep us informed
Bricklayer
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