Parent forged daughters signature to get loan

A friend has been put in a very difficult situation. Their daughter, a student, discovered that there was a bank loan in her name which she knew nothing about. After talking to the bank it came to light that one parent with a failing business took out a loan in her name as their credit rating was so bad. The payments are behind and the interest has mounted up. This is obviously quiet a dispickable thing to do and my friend and daughter are very worried.
The bank have insisted she pays this loan back even though she didn't ask for it. Without getting into a debate about what should happen to the parent can anyone comment on the role of the bank here.?
This was a couple of years ago when taken out. This young girl will have her credit rating damaged by this and she never asked for the loan. Could she take the bank to court for not doing a proper due diligence on giving the loan? I bet if she walked into the bank currently she would probably have to do 2 face to face interviews to get a loan. The bank have refused to let the parent take over the loan because they have such a poor rating. The parent has said they will continue to service the loan...
What can be done here in relation to the bank here to restore her credit rating as surely they cant insist on this as it was illegal to begin with?

The bank have about as much right to get me to repay the loan as they have to get this girl to pay. I wasn't party to a borrowing agreement, and neither was she.

If the bank damages her credit rating, they are doing her a serious wrong, and she would probably have a good case for defamation.

I think she should write a formal letter to the bank stating simply that she never applied for a loan, that she never received money from them, that she accepts no responsibility for any amount owing to the bank, and that she requires them to take her name off all financial records relating to the loan.

It's the bank's problem, not hers.

Has the daughter made it clear to the bank that this was fraud? I know you said in your original post that you don't want to get into what should happen to the parent, but I'm not sure you can completely disentangle the two? I wasn't clear if the daughter is still on friendly terms with the parent who took out the loan and if they are approaching the bank together about the loan with a "let's fix this problem without dwelling on what caused it", while from the bank's point of view they would probably treat a fraud quite differently to what might seem to be a family misunderstanding...

impersonation to get a bank loan

the loan is not the girls, someone has impersonated her and effectively opened a new bank account. how did the bank verify the ID of the loan applicant? must have been female with same 1st and 2nd names perhaps. the gardai may have to be notified and obviously that would be messy from a family viewpoint, but it is fraud/deception or whatever.

Hi Troy

It's a very tough issue, assuming that the child is still on good terms with the mother, assuming it's the mother who took out the loan.

Legally, the bank has no case. As others suggested, she could write to the bank and tell them that the loan is not hers and that they are to confirm this in writing to her. She would also need to make sure that the ICB record is corrected.

In practice, if she reports her mother as having forged her signature to defraud the bank, the bank should call in the Gardai and the mother should be done for forgery and fraud.

It's a tough call and depends on the mother's relationship with the daughter. It's the daughter's credit record vs. a possible jail sentence for the mother.

Forget about blaming the bank for this. They are the victim of the fraud. It is the mother who is to blame.

The bank are aware at this point that it was a forged application. The parent is maintaining someone in the bank told them to do this (whatever). The bank had a full application from the girl with all revelent data needed. I am not saying which parent did this and all are on OK terms. Parents are separated. There may be an opportunity for the parent in question to clear the loan shortly, but there is still the issue of the ICB record. The parent involved is not keen on giving money to banks but rather pay it off bit by bit. This is been addressed.
But where is the bank in this? surely they can be taken to court for giving a loan to a person and insisting on the their daughter paying and have also destroyed their ICB record?

Where is the bank in this?

They have lent money based on a forged application and they should report it to the Gardai.

The daughter can insist that they take her name off the loan application and clear her ICB record. No need to sue them. Just tell the bank to do so and go to the Ombudsman if they don't.

She really needs to talk to the bank again. She is perfectly entitled to insist that the banks change their records and fix up her ICB record. They have absolutely no right to insist that the daughter pays back the loan. She was the victim of identity theft.

They might be able to arrange something to avoid the Guards getting called in but the parent who committed the fraud needs to be involved. If relations are good (I would disown them), is there a way that the Daughter or non-offending parent will guarantee the loan under the other parents name (if as you say, they are willing to pay it back)? The bank will want to get their money back so might be willing to do a deal.

Your friends daughter needs to look after herself.

It's one parent that done this. The girl can look after her self, but she knew nothing about this until she seen something online a few months ago while studying out of the country. She doesn't want to see the parent get into trouble with the law but wants her name cleared.

Is there not an onus on the bank to make sure applications are genuine? why are they still wanting to deal with her knowning what they know now? I know the fact that the parent is bankrupt is probably on their minds but still.

Troy McClure said:

Is there not an onus on the bank to make sure applications are genuine? why are they still wanting to deal with her knowning what they know now? I know the fact that the parent is bankrupt is probably on their minds but still.

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The bank will correct the fraud but you can't just expect them not to call in the Guards. I am not sure why they are insisting she honours the loan. Is it because she is refusing to admit that one of her parents committed identity fraud on her? As Brendan says, the bank is the victim as much as the daughter.

Troy McClure said:

She doesn't want to see the parent get into trouble with the law but wants her name cleared.

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Her only option that will achieve both of these goals is to get the parent to clear the loan asap. She may still have some credit rating issues about missed payments, but her record will also show that the loan was cleared.

The girl does not have a real problem in the financial world. All she needs to do is stand her ground with the bank and insist that they act correctly.

There might be a bank official with a problem if, as has been suggested, the forged application was made with some degree of connivance. That might explain why the bank is taking the line that the girl should pay up: to concede otherwise might land a bank official in trouble.

Let's be blunt: she has a family problem to resolve. Not my business nor, I think, that of AAM. But she needs to deal with the fact that a parent who would land her in such a pickle.

Troy McClure said:

It's one parent that done this. The girl can look after her self, but she knew nothing about this until she seen something online a few months ago while studying out of the country. She doesn't want to see the parent get into trouble with the law but wants her name cleared.

Is there not an onus on the bank to make sure applications are genuine? why are they still wanting to deal with her knowning what they know now? I know the fact that the parent is bankrupt is probably on their minds but still.

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I have a feeling your friend is the parent who has defrauded the child seen as you won't hear of them taking any responsibility. The bank though they may have slipped up with security checks or something they have not defrauded anyone, it's the parents fault. They need to take responsibility. Sue the bank? No the bank needs to sue the parent and so does the child.

Complainer said:

Her only option that will achieve both of these goals is to get the parent to clear the loan asap. She may still have some credit rating issues about missed payments, but her record will also show that the loan was cleared.

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Paying off a loan early doesn't necessarily haev a positive impact on your credit history. I have paid off a number of loans early (i.e. after 12 or 18 months rather than 60 months) which were for getting me through college. When i moved back to Ireland i went to get a car loan form AIB, and they said no, even though i pointed out my earlier repayments.

Also got turned down for a mortgage with AIB as i had one missed payment on a loan while i was away (genuinely forgotten about it). I tried to argue the case that i had repaid all this money early but they wouldn't have it. Paying early (i've heard) can actually negatively impact your rating in the eyes of a bank as they ultimately lose money from the interest you are no longer paying.

Isn't proof of ID required when taking out a loan? If it was, then she should be asking to get a copy of all documentation relating to the request / granting of the loan.

If photo id was required, and is not on file, then escalate the issue to the bank.

Let the bank deal with the fraudulent parents.