Bank Error in Your Favour

T.C.

Client takes out a bank loan for £200K. A year later the bank gives the client another loan for £100K, somehow linked to the first. The loan repayments are taken for both loans. How legal is it for the client to keep the second loan when this was not asked for, no paperwork given for it, nothing signed, nothing secured etc etc? Opinions or links welcome.

deanshepherd

Is it in their favour?

You seem to indicate that the client is now making repayments for both loans and presumably paying additional interest for the privilege.

If they really want the loan then I'd probably advise them to get the bank to 'just fax over the loan paperwork so they have it for their records'.

Otherwise they would be up the creek without a paddle if they spend the £100k and then the bank realise their error a few weeks later.

T.C.

Thanks. I will get them to contact their bank to either create the necessary paperwork or sort out the mess.