In one of my Fireside Chat Videos I raised the point of how many business owners with Bounce Back Loans were unaware of the Pay As You Grow Options, and it appears, as the following case highlights, some Lenders are not very forthcoming with the details of those Forbearance Options put in place by Rishi Sunak.
But as you will see, once Complex Law got involved, Lloyds Bank finally decided to do the decent thing.
Overview of the Case
Miss S approached Lloyds for a Bounce Back Loan (BBL) to support her business, utilising her existing personal accounts for her business transactions.
After initial discussions with the bank and a completed application, Lloyds approved a loan of £35,500 on 1 June 2020, which was disbursed a few days later.
However, years later the company defaulted on the loan, leaving Miss S in a dire financial position. The sudden default was attributed to missed payments, but Lloyds never informed Miss S of the PAYG options, leaving the company with adverse credit history and being insolvent,
The bank’s decision not to reinstate the loan following the default when Miss S raised the issue of the PAYG left Miss S without the necessary funds to maintain her business operations or personal commitments, leading to significant financial and emotional distress.
Lloyds’ actions severely impacted Miss S, leading to a breakdown and a diagnosis of Post-Traumatic Stress Disorder. Despite the devastating consequences, the bank initially offered only a modest gesture of goodwill.
After Miss S escalated her complaint to us, we highlighted the vulnerabilities of our client at the time and why Lloyds did not do enough to educate our client of their options, Lloyds then offered to write off the outstanding debt but also compensate Miss S adequately for the distress caused.
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