Forget toxic loans, say hello to financing toxic habits. In the UK, there is a bank that will help you get your daily fix of illegal drugs. Last October, an 18 year old heroin addict walked into the Nat West Bank, pleading for a $100 loan. In any normal society, a heroin addict would be politely shown the door by a 250lb security guard. However, in the UK, an addict, with no income, can get an unsecured loan for almost $2500. Moreover, they can spend in on drugs.
Here is the shocking story, which first appeared in the London times.
In October last year Hannah Mayne walked into the local branch of NatWest Bank and asked for an overdraft of £50. Although she was an unemployed teenager whose only income was from benefits, the man behind the counter said that would be no problem. In fact, she could have £1,200 if she wanted. Ten minutes later Hannah walked out with £850 in cash in her pocket and the facility to access £350 more. Three weeks after that she took a heroin overdose. She had spent every penny of NatWest’s money on drugs.
Taken on its own, the irresponsible way in which a bank will lend to a young person with no discernible way of paying it back these days is a worrying enough story. As the high street banks recently announced record profits, the Office of Fair Trading is demanding new rules to outlaw reckless lending. But what makes this case worse — much worse — is that the bank had been told by Hannah herself that she was a drug addict. Hannah’s mother, Kate, an interior designer who specialises in historical buildings, had persuaded her to do the responsible thing by cutting off her money supply for drugs. Together she and Hannah, then 18, visited her local branch in Brighton and asked it to stop giving her credit — by credit card or overdraft — because she was a drug abuser and would only rack up debts to feed her habit. The member of staff there listened sympathetically and wrote the details into her file. Kate and Hannah remember her turning the computer screen around and showing them what she had written.
But several months later, frantically trying to placate a dealer to whom she owed money, a dishevelled Hannah went to a NatWest branch again to chance her arm in pleading for £50 to offer him as an interim payment. She was, she says, amazed when the offer came back to lend her 24 times that amount. “I didn’t really understand when they said ‘You can have the money in your hand today’,” she says. “I was in there only five or ten minutes.” Anxious to get out of Brighton, she and a fellow addict disappeared to Birmingham together. While she was away her mother opened her bank statement and saw to her horror that Hannah was £1,199.97 overdrawn. Kate phoned the branch and told it in tears that the agreement not to give Hannah any more credit had been broken. “If she overdoses, I will hold NatWest responsible,” she said.
A few days later that is precisely what happened. The hospital in Birmingham called Kate and said that Hannah was in intensive care. If her friend hadn’t found her in the hostel, she would have died. The branch told Kate it could find no information about Hannah’s condition on her file because the computer would wipe off any notes after a certain period of time.
Hannah recovered, but that was by no means the end of her problems. It transpired that Natwest was charging Hannah £40 a month for the overdraft. Her entire income comprises £70 a week income support and £160 a month disability allowance. Kate urged her to apply for a special loan to pay it back but, in one of the strange anomalies of modern banking, she was told that she didn’t qualify because “her income is from benefits”. So, asked her mother, she qualified for the £1,200 overdraft while on benefits but not for a loan to pay that debt back? Yes, said the bank. This baffling — and, in Kate’s view, immoral — contrariness is one of the main reasons that she has decided to speak out about Hannah’s problems and the way in which the system generally, ranging from drugs support projects to the NHS, thwarts families trying to cope with a child on drugs. NatWest in effect, and irresponsibly, bankrolled her daughter’s overdose, she says. It offered a compromise deal in which it would waive the bank charges and Hannah could pay it off at £30 a month. The Maynes refused on principle since they maintained that it was the bank’s fault for having given out the money in the first place.
Here is the shocking story, which first appeared in the London times.
In October last year Hannah Mayne walked into the local branch of NatWest Bank and asked for an overdraft of £50. Although she was an unemployed teenager whose only income was from benefits, the man behind the counter said that would be no problem. In fact, she could have £1,200 if she wanted. Ten minutes later Hannah walked out with £850 in cash in her pocket and the facility to access £350 more. Three weeks after that she took a heroin overdose. She had spent every penny of NatWest’s money on drugs.
Taken on its own, the irresponsible way in which a bank will lend to a young person with no discernible way of paying it back these days is a worrying enough story. As the high street banks recently announced record profits, the Office of Fair Trading is demanding new rules to outlaw reckless lending. But what makes this case worse — much worse — is that the bank had been told by Hannah herself that she was a drug addict. Hannah’s mother, Kate, an interior designer who specialises in historical buildings, had persuaded her to do the responsible thing by cutting off her money supply for drugs. Together she and Hannah, then 18, visited her local branch in Brighton and asked it to stop giving her credit — by credit card or overdraft — because she was a drug abuser and would only rack up debts to feed her habit. The member of staff there listened sympathetically and wrote the details into her file. Kate and Hannah remember her turning the computer screen around and showing them what she had written.
But several months later, frantically trying to placate a dealer to whom she owed money, a dishevelled Hannah went to a NatWest branch again to chance her arm in pleading for £50 to offer him as an interim payment. She was, she says, amazed when the offer came back to lend her 24 times that amount. “I didn’t really understand when they said ‘You can have the money in your hand today’,” she says. “I was in there only five or ten minutes.” Anxious to get out of Brighton, she and a fellow addict disappeared to Birmingham together. While she was away her mother opened her bank statement and saw to her horror that Hannah was £1,199.97 overdrawn. Kate phoned the branch and told it in tears that the agreement not to give Hannah any more credit had been broken. “If she overdoses, I will hold NatWest responsible,” she said.
A few days later that is precisely what happened. The hospital in Birmingham called Kate and said that Hannah was in intensive care. If her friend hadn’t found her in the hostel, she would have died. The branch told Kate it could find no information about Hannah’s condition on her file because the computer would wipe off any notes after a certain period of time.
Hannah recovered, but that was by no means the end of her problems. It transpired that Natwest was charging Hannah £40 a month for the overdraft. Her entire income comprises £70 a week income support and £160 a month disability allowance. Kate urged her to apply for a special loan to pay it back but, in one of the strange anomalies of modern banking, she was told that she didn’t qualify because “her income is from benefits”. So, asked her mother, she qualified for the £1,200 overdraft while on benefits but not for a loan to pay that debt back? Yes, said the bank. This baffling — and, in Kate’s view, immoral — contrariness is one of the main reasons that she has decided to speak out about Hannah’s problems and the way in which the system generally, ranging from drugs support projects to the NHS, thwarts families trying to cope with a child on drugs. NatWest in effect, and irresponsibly, bankrolled her daughter’s overdose, she says. It offered a compromise deal in which it would waive the bank charges and Hannah could pay it off at £30 a month. The Maynes refused on principle since they maintained that it was the bank’s fault for having given out the money in the first place.
That is a shock story. What was the bank thinking, when it gave out that overdraft?
ReplyDeleteIt just goes to prove how socially irresponsible capital is. Banks will finance anything so long as it thinks it can turn a profit.
ReplyDeletehttp://mortgagesundressed.com/2007/04/23/from-fraud-to-value/
ReplyDeleteGed,
ReplyDeleteCan you do something about that photo, it is vile.