Mother took out loan in daughter's name with her own contact details

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VOOVOO

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Hi,
I'm seeking advice on behalf of my partner. She applied for her credit report recently with a future mortgage application in mind. To her dismay, it showed a defaulted loan from when she was approx 18 years old. (She is now her in her thirties)

When she was 18, her Mother arranged for her to take out a loan at the local bank for the purposes of paying for a siblings medical bills. Although legally an adult of course, she was very young at the time, in 1st year of university and did not fully understand the financial implications of this.
Her mother arranged the appointment with a woman in the bank that she knew and my partners understanding is that her Mother was going to repay the loan in full herself with no involvement from my partner needed.

It seems that initially these repayments were all made in full by her Mother but at some point, the repayments stopped.
Years went by and my partner had moved out. The phone number on file by the bank for the loan in credit report is her mothers and so my partner never got any phone calls from the bank about it. Her Mother did not pass on any of the postal correspondence from either the bank or subsequently, the debt collection agency. All of this correspondence was disposed of.

Obviously, this is a sensitive topic. There's a personal/family dimension which is one side of it (Clearly what her Mother has done is wrong though I do think her actions were originally in good faith and that she was probably too embarassed to tell my partner she had defaulted on the loan etc)

Leaving the personal/ethical issues aside, what's the best action for my partner to take now? She needs to repay this loan to clear her credit report so that she can get (and us) can get a mortgage.
However, I feel somewhat annoyed on my partners behalf that the bank did not do more to protect her in this case. From what I've read, there is limited legal basis for any duty of care by a lender towards a borrower but from an ethical and regualatory perspective, I feel they should have done more here. I feel this was borderline financial abuse that the bank ought to be looking out for.

The bank official (who was friendly with her Mother) likely knew the true purpose of the loan was for the Mother and not the 18 year old and they also should never have recorded the mothers phone number as the contact details for the loan. Both her mother and my partner had seperate bank accounts with this bank so they would have or ought to have known that the phone number was her Mothers. Even the fact that the debt collection agency was phoning her Mother until recently about my partners loan seems like a significant GDPR issue.

Obviously my partner has learnt her lesson here but is there any point in broaching this with the bank and seeking to negotiate a settlement of the loan? Would the central bank or ombudsman be of any help?
 
VOOVOO said:
Even the fact that the debt collection agency was phoning her Mother until recently about my partners loan seems like a significant GDPR issue.
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Forget GDPR or going after the bank here. They were simply using the details that your partner was complicit in providing for the very purposes they were being used (albeit she did so under the influence of her mother). If you want to claim financial abuse, is your partner willing to take a case against her mother?
 
Please please do not mention GDPR. It has absolutely nothing whatsoever to do with the issue and will simply prevent anyone trying to assist you in getting the problem sorted.

Only person to be annoyed with here is the mother. So forget getting annoyed at anyone or anything else. Yep, banks did this from time to time. There was a day that a hand shake would get you a loan and the bank manger would fill the details in themselves. (I actually got my first mortgage that way!!) Thankfully things have changed.

If the amount due is not too much and you have it available, be prepared to pay it off immediately. But first look to have a meeting with the branch the loan was taken out in and give them the details as above. Make sure the meeting is documented and follow it up with a summary of what was discussed and also ask that a note is put on the record regarding the nature of the way the loan was hidden from your partner and that it is confirmed repayments were previously made by and the phone contact details were of a different person to the account holder and due to this the account holder did not know of the issue.

Immediate payment of the balance and these notes combined with an otherwise unblemished credit record should see that institution provide a mortgage as they should shoulder some blame.


But just don't mention GDPR or try and blame the bank official. - You can mention the fact that they were known to her mother and let the person dealing with you come to their own conclusion.
 
Leo said:
Forget GDPR or going after the bank here. They were simply using the details that your partner was complicit in providing for the very purposes they were being used (albeit she did so under the influence of her mother). If you want to claim financial abuse, is your partner willing to take a case against her mother?
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Fair enough. Sorry, I probably should have been clearer that of course my partner is ultimately responsible for this situation.

However, I do think the bank still bears a portion of responsibility but maybe I'm wrong about that. All of the paperwork seems to have been handled by her Mother and the bank official who she was friendly with. She certainly never provided her mother's phone number. She doesn't even recall ever signing anything. (Though presumably she must have at some point.)
 
DannyBoyD said:
How much is remaining on the loan and can the parent pay it?
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The balance is relatively small. <10k approx.

But no, the parent is not in a position to repay it unfortunately. She is now retired and separated with very limited means.
 
VOOVOO said:
Fair enough. Sorry, I probably should have been clearer that of course my partner is ultimately responsible for this situation.

However, I do think the bank still bears a portion of responsibility but maybe I'm wrong about that. All of the paperwork seems to have been handled by her Mother and the bank official who she was friendly with. She certainly never provided her mother's phone number. She doesn't even recall ever signing anything. (Though presumably she must have at some point.)
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Yeah, the problem you have is that your partner either filled in those details and signed it, or her mother filled it in before she signed it. Either way, it sounds unlikely there there is any culpability on the bank's behalf here. If you were to contact the bank to suggest they should have done more, your partner's mother might end up subject to investigation regarding coercion or fraud.
 
VOOVOO said:
The balance is relatively small. <10k approx.

But no, the parent is not in a position to repay it unfortunately. She is now retired and separated with very limited means.
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In that case, and given that you want to take out a mortgage in the future, you might be as well to bite the bullet and clear it.

Can't say I'm impressed with parent; but thats beyond your control at this point.

Am I right in saying the credit history clears in 5 years?
 
Yes. If the loan is paid in full today, the debt no longer exists, and record of it will drop off in 5 years time.

Recommend clearing the loan, and putting a note on the Central Credit Register saying that:

1) The loan was taken out on behalf of a relative.
2) Contact details were that of the relative.
3) The relative partially repaid the loan, and then stopped making payments, and failed to inform the borrower.
4) As soon as the borrower became aware of the situation, the borrower repaid the loan in full.

If the above happens, some lenders may advance a mortgage 2 years after the loan is repaid in full, assuming an otherwise clear Central Credit Register report.
 
VOOVOO said:
However, I do think the bank still bears a portion of responsibility but maybe I'm wrong about that.
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I think you are right about that, however !

peemac said:
Immediate payment of the balance and these notes combined with an otherwise unblemished credit record should see that institution provide a mortgage as they should shoulder some blame.
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This is excellent advice.
 
VOOVOO said:
When she was 18, her Mother arranged for her to take out a loan at the local bank for the purposes of paying for a siblings medical bills. Although legally an adult of course, she was very young at the time, in 1st year of university and did not fully understand the financial implications of this.
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What was the advantage of adding an 18-year-old with no regular income to the loan application? It doesn’t make much sense either for the lender to have sought it or your mother to offer it.

It’s possible that your partner is mistaken about this and is was more involved in the loan application than she remembers.

Otherwise the advice in this thread is very good.
 
Could be that the mum had already defaulted on another loan maybe? The 18 year old had a clean record I guess, or no bad record at least.
 
I'm conscious that this was a Celtic Tiger loan when the banks were throwing money at people and proper procedures were not always being followed, especially by staff who had been told they now worked in "retail" and were incentivised to sell.

However 2 things here to bear in mind, the mother quite probably committed fraud in that she took out a loan in another persons name and then defaulted on it and secondly, it is odd that a loan was given for the reason in question to a student with no history or financial means. Did the mother act as guarantor?

GDPR is irrelevant since the Mother probably committed fraud when she signed the forms. The reason for the loan is also odd, "Medical bills", this isn't the US.

Is the friend still employed at the bank

To be honest, short of going to the Gardai and pressing charges, it may be that your partner has to suck this one up until such time as the credit history is cleansed.
 
thedaddyman said:
The reason for the loan is also odd, "Medical bills
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Indeed; but it sounds more virtuous.

OP do you know what the initial loan amount was?

I also think, whilst not starting a family war, parent should come clean about the whole mess.

Offspring could start by saying they are clearing the loan accepting that parent can no longer do so, but they would like a better understanding of what was happening in the family at the time.
 
Way before Celtic Tiger my mother helped 2 of us get a loan from AIB bank in order to go as students to the USA to work for the summer. It would be quite a common thing. But mother had to sign as guarantor. I remember telling her that it was important we repaid the loans and that was not enough, that she should go in an cancel the guarantee when the loans were repaid, as otherwise she would be forever liable for us. That's how tricky the banks were. Not sure if she ever did.

Clearly the mother was in a sticky wicket, needing the money to pay medical bills and OP's partner was an easy way to get the loan. Not sure that they were naive, more they were helping their mother, remember in the past it was difficult to get credit, can only see a mother doing this for serious stuff. So I think the blame game is pointless, especially as it's clear the mother has not done well.

What I find odd is that the loan remains so long on the credit record. Is there not a statute of limitations on this. The bank passed it to debt collectors, they have given up, so surely time works it's magic.
 
I remember doing the opposite, mum borrowed so I could fund a working trip to Germany, I repaid it.

It was from the credit union and mum insisted I started saving with them as soon as I got back. Still have that account and occasionally I drop a few euros into it. It’s my replace white good fund! Been called on a few times.

Medical bills may well have been dental. Very little on the public back then, that hasn’t changed much,
 
Did the daughter actually sign the documentation?

If my father took out a loan in my name and faked my signature, I would not be responsible for the loan.

But assuming that the daughter did actually sign for the loan, then she has to pay it back.

I am sure that the fund which bought the loan would accept a settlement, but then it would stay on her credit report for 5 years.
So if you want to take out a mortgage, clear the loan now.

You might still get a mortgage from Bank of Ireland or Finance Ireland who are more flexible on cases where there is a blip on the credit record.

Mortgage Rates - Finance Ireland

www.financeireland.ie www.financeireland.ie

It would be handy to have some sort of "official" record of the loan being for your mother, but I can't really see how you would get this. Would the manager who was friendly with your mother give you something on the bank's headed notepaper? I doubt it as that might incriminate them.

But you could lodge a complaint with the bank which issued the loan.

I have just discovered that this loan has not been repaid and I was not informed.
When I was just 18 my mother arranged an appointment for me to meet the Manager of the x branch, Ms. A. Y., with whom she was friendly.
The Manager knew full well that this loan was for my mother and not for me. In fact, she may well have suggested it as a way for my mother to get a loan. She put my mother's contact details on the loan including her address and her mobile number.
My mother made the initial repayments but then stopped without informing me as she always thought it was "her" loan.
Because you used my mother's contact details, I was never notified that the loan was in arrears.
Now 15 years later I discover that the loan is unpaid.
I have now repaid that loan to clean up my credit record.
But I hold the bank responsible for issuing the loan under false pretences and under the circumstances, I would call on you to repay me €7,894 which I had to pay Cabot to clear the loan.
Alternatively, I will make a complaint to the Ombudsman seeking the same payment and compensation for the damage done to my credit record.

The bank will reply officially and you could then use both these letters to support any future application for a mortgage. I still don't think you will get one, but it wouldn't do any harm.
 
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VOOVOO said:
I'm seeking advice on behalf of my partner. She applied for her credit report recently with a future mortgage application in mind.
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Is it possible for you to get a mortgage on your own without your partner's assistance?

if you get married, you won't be able to get a mortgage on your own, but if you are not married, your partner's record is irrelevant.
 
VOOVOO said:
She applied for her credit report recently with a future mortgage application in mind.
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This is a little bit unusual. Was your partner suspicious that she might have a bad credit record? I suspect that she did know that there was a problem and just buried her head in the sand. And just hoped that the defaulted loan would disappear.
 
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