Banks ... are exasperating!

Sometimes people are frustratingly silly and sometimes they completely surprise you with their stupidity.  Yesterday was a case in point ...

As some readers will know, I assist my Inn (one of the professional associations for barristers that I am a member of) and yesterday I was asked to speak to a student member of the Inn about her financial position.

In essence, having completed her courses, she found that she was unable to obtain a training position as a barrister and she has been finding it difficult to obtain a training position in the legal profession at all - and given the straightened times that we live in, that should not surprise people.

She had borrowed the money to pay for her courses from one of our biggest banks as a professional development loan and over the last 8 months or so she has been finding it impossible to discuss the matter with the bank because she simply finds that no one will talk to her or renegotiate the loan in anything like a sensible manner.  During that time she has made over 200 applications for positions that she is qualified for - or for which she is more than qualified for - without success ... or sufficient luck.

Earlier this month, she received a 'final demand' before the matter was to be 'handed over' to debt collectors or solicitors.  Her income is what she receives by way of Job Seekers' Allowance and her rent is paid by way of Housing Benefit.  She told me that she had no assets or savings of substance (about £100).  The demand from her bank was to repay the £23,000 that she had paid in full within 18 days 'or else'.

Now, I suspect that there are many people in this sort of position, so I thought that we would talk to someone at the bank and see what could be done.  We explained to the person that we spoke to that she had no assets and that her income was limited to JSA and that she would afford to pay £15 per month until such time as her financial position changed - and I listened in astonishment as I was told that there was 'nothing that the Bank would do'. 

I explained that the consequence of taking proceedings against her may well be to reduce or even eliminate her prospects of becoming a lawyer (as a result of professional rules of conduct) and I was told that while the person we were speaking to was aware that she was trying everything that she could there was nothing that could be done.

In the end I asked whether the Bank's position was that unless she repaid the entire loan sum (£23,000 odd) - then the bank was unwilling to discuss or negotiate any deal or repayment plan of any sort.  I was surprised to be told that it was.  I asked the Bank's employee to tell me where someone in my colleague's position would raise that money - to be told that the Bank wasn't in a position to advise!  I asked whether there was anyone at the Bank that I could speak to in any department about the matter - to be told that there wasn't, and that, in any event, the answer wouldn't change!  I explained that refusing to negotiate was on the face of it unreasonable - to be told that that was the position the Bank would adopt having sent out a 'final demand'.

I then asked for confirmation of the Bank's position - and was told something slightly different - that unless the arrears (which I was told was a little over £2,000) were paid by the deadline  - then the Bank's position was unchanged.  I explained that I as prepared to give my colleague a witness statement to explain what had been told to me and that I understood that it may have legal consequences - to be told that the Bank's position was unchanged and unyielding!

I simply don't understand it - let's assume that the worst happens: from what I know, the Bank will incur charges (legal and procedural) which will be added to the debt - and never recovered.  The debt will never be recovered.  The interest never recovered.  Sadly, by student colleague may find her ability to continue her development as a lawyer barred or severely impeded - with no benefit to the Bank or its shareholders.  Were the Bank to accept her offer to pay what she can, then the Bank may well eventually (and assuming that there is an economic recovery, probably will) recover its loan in full as her circumstances change.  Why is this Bank so blind?  Why so unyielding?  I shall write to its Chairman and complain!