Credit card issue on benefits

[clancyblob]

I am a youth worker, and a 19 year-old I work with has just been given a LloydsTSB Classic Credit card after an interview at his local branch. He responded to junk mail through his letterbox. I am very suprised they should do this, as this young man has only �45 or so a week income from benefits. He has been on benefit over a year. He has a moderate learning difficulty and finds reading and writing difficult. He would have struggled through an interview, and it would have been pretty obvious that he was not very bright.. He was given the card with �1000 limit, and hey! suprise suprise he has now spent up to that limit in 3 weeks, on nothing tangible, with no hope of repaying the debt. He is very worried, and feels he was taken advantage of. He says he did not understand what was said to him in the interview, nor what he was signing. Where does he stand regarding this debt? To me it seems bad practice to issue a credit card to someone on benefit, let alone one with �1000credit. The bank had refused him an overdraft earlier this year. I wonder if a referral to the banking ombudsman may be helpful. Anyone got any knowledge or advice in this arena? Thanks

[themas]

1. Make sure he cuts up the card.

2. Look at the Banking Code (download it from - I think - BBA site) & see which bits (if any) the bank may have failed to comply with.

2. Write a complaint letter to the bank (ask them for details of their formal complaints procedure), sending with it a signed authority from him for you to act. Set out all the details you have given here, & as much info as you can get about his learning problems; also refer to any parts of the Baning Code they appear to have breached. Ask for the debt to be written off.

3. They will probably refuse. Once you have exhausted the complaints procedure you can go to the Ombudsman.


You may not succeed but - from what you say - they seem to have been irresponsible in giving the card (a cynic might suspect that the motivation was commission for the adviser) so it is well worth raising.

[themas]

Oh - and if you can't get it written off, he should pay it off at no more than �1 per month, with interest and charges frozen. As he is on benefits they can't expect more, & wouldn't get more if they took him to Court.

[bednobs]

i dont understand how he feels "taken advantage of" now he's spent all the money if he didnt feel it before!

[clancyblob]

Thanks themas, I'll see what I can do.
Bednobs, I can see where you are coming from, but I work with people with learning difficulties, some of whom are very childlike, and will never mature to adult thinking. When it was offered by the bank he thought they would only give him what he could afford to repay. He hasn't a clue what the contract means, he can hardly read. I've looked at it with him.

A similar lad has just had a serious fall and fractured a vertebra and is lucky not to be paralysed. That was 12 days ago. He was sent home and told to rest and gentle walks in the garden for at least 8 weeks. He was out playing football this Tuesday and fell down twice! I have explained over and over that, though he may feel OK, the slightest jarring could paralyse him for good, but he cannot see how that can be as he feels OK. He's like a five year old in many ways. Same as the credit card guy.

[bednobs]

i can see where you are coming from too and it does seem irresponsible of the bank to lend him this money.
i suppose where im coming from is that to try and get him out of this seems the wrong thing to do for me, as he must learn that there are consequesnces to actions. if im being totally honest it sounds like you are making hm into a victim, who was preyed upon by the bank, but he clearly has some access to advocation and if he can hardly read, how did he respond to a letter that came through his door and have the wherewithal to make an appointment at the bank ? maybe he is better at orting thinks out than you think? i know this is not helpful, but it was the first thought that came into my mind, and i just felt i had to put it down.

in a way, he is not unlike any other teenage who discovers the "joys" of credit cards, and dosent have much concept of paying back the "free" money, but in a way perhaps this is a good thing to happen now, so he can, with help from you, make it into a lesson well worth learning for the future about budgeting and credit. He is in a good position having you to help him; i wish i had had someone to help me out in the same way you are helping this young man

[themas]

Bednobs - I agree he could be considered to be irresponsible, but without knowing much more about his personality it is very difficult to make this judgement. I do know that a lot of people with learning and other difficulties are just not capable of learning from their experiences in the way most of us do.

For me, it is completely irresponsible of the bank to give anyone with an income of �45 per week a credit card (assuming, of course, that he gave them the correct figure). Hence my view that the bank should be chased about it. Of course, the trouble is that they never seem to learn from their experiences either!

[clancyblob]

Believe you me, Bedknobs, after 25 years plus in this work I do not lightly "rescue" people from their own messes. As you say, most times I say "There you go! Now what do you plan to do?" and advise them on their options, this can be a lesson well learned. However this is in a different league. He's been paying the minimum (more than he can afford) and I found a bank leaflet illustration saying it'd take him 31 YEARS to pay it off at this rate! Yes he can read the headline of the letter and the broad gist of the offer, but I struggle with the pages of small print and I have degrees etc, so he didn't have a hope. He doesn't understand the concepts in the contract, and I've tried to explain in many ways. He's not some fly streetwise kid. If you met him, you'd see immediately what I mean. And yes, he has access to advocation - me, hence this posting!

[clancyblob]

To close this off, I had long run of correspondence along the lines of Themas's suggestion. They accepted that it was irresponsible to lend him the money, they had not assessed properly, and said they'd refund all fees and charges and charge no interest. He does have to pay the actual sum he spent (about �900) at a nominal rate. I had to deal with about 10 different offices, none seemed to know what the other was doing, and still don't. He hasn't had the refund yet, and has had letters threatening bailiffs months after they accepted that they were in the wrong. It's been like knitting fog.