No contract with MBNA & high debt - options?

Father

Hi Folks

Long time lurker and first time poster - hopefully you can help me with a quandry.

My son has just finished college, is currently unemployed and will probably (and very unfortunately imo) be going to Australia in the summer in search of better times.

He has c. €10k in education debt on a MBNA credit card and I'm hassling him to close it before he goes. I've offered to give him €5k (it's all I can spare) and am telling him to write to MBNA requesting a settlement and offering them a 'take it or leave it' choice. To be honest he wants to just go and let them write pointlessly to him here.

Anyway it has now transpired that he applied for the credit card online while in college (2006) and the card arrived without him having to actually sign anything. I work in a Bank (not this kind of area) and can't understand how the card issued without money laundering compliance (and a signature) but he is positive this is what happened. Apparently he also let on during he submission that he was working (hence the €10k limit) and wasn't asked for any bank statements or payslips etc etc. He said he and his mates had been drinking a few beers when they tried the application "for the craic". The card arriving was a complete surprise the following week.

Now I know that he spent the cash and should morally pay it back but the fact remains we are not a wealthy family - the €5k is all I have. My son wants to.....

1) Write to them asking for a copy of his contract
2) Assuming they can't provide one - tell them to remove their product from his ICB as they had no right / contract to put him him there
3) Cancel the DD and basically tell them to get stuffed

My concerns are

1) Will they chase him legally? Can they with no contract?
2) Would it be better to offer the €5k and outline the alternative and see what they do?
3) While they have no contract, if it went to Court my son would have to admit he spent the cash and I don't want him to face a large legal bill aswell as fines etc etc

Any other advice guys?

Thanks very much for your help.

Random

this is not a legal opinion

personally i think youre in cloud cuckoo land there if you think you can void 10k of debt because you say there was no written contract
using the card is acceptance of the t&c which would have been sent out with it

(i got mbna cards back in the day with just a phone call too)

chris85

Are you sure nothing was sent out to be signed and returned before the card was issued. How sure is your son of this.

Also the fact he said he was working meant he actually lied on the application. Not good at all. The fact the bank accepted his word is up to them.

I would find out if they have a copy of credit agreement before anything is done. he would have had to sent in proof of ID and address (no way around this), maybe the agreement was signed and returned with this.

Also morally if he doesnt pay this not a good thing really. I dont agree with banks attitudes but if he got it he should pay it back. I wont argue about morals but its my opinion on it.

Technically if they cant provide a contract they could still pursue through the courts and if they can show he got use of the money he may still be done for it and legals fees added. Its a possibility. They dont need to provide a copy of the contract when proceed to court. Its up to you to defend on the basis of no contract being in place. Could be costly.

Random

mbna did not ask for proof of id or proof of address a few years ago when giving out cards. i know this for a fact because i got one as did another person i know. a 10 min phone call and the card came out in the post 3/4 days later.

chris85

Random wrote: »

mbna did not ask for proof of id or proof of address a few years ago when giving out cards. i know this for a fact because i got one as did another person i know. a 10 min phone call and the card came out in the post 3/4 days later.

Wow thats a bit lax alright. Was the regulator aware of this? It is required by law to satisfy anti money laundering legislation.

Random

chris85 wrote: »

Wow thats a bit lax alright. Was the regulator aware of this? It is required by law to satisfy anti money laundering legislation.

i dont know if the law has been updated recently or what but i certainly didnt tell the regulator - i was happy with my credit and wouldnt dare question it for fear id have lost it

Father

Thanks for the replies so far. He's going anyway and all he can pay is €5k so I dunno after that - morals aside.

I might ring the CC recovery section in my own bank in the morning and see how they would deal with it.......

wmpdd3

from dealing with mbna personally and working out a payment plan for a similar amount, i think they would accept the 5000, they asked me if i had any savings at all i wanted to offer to close my account.

i didnt forward proof of id and utility bills when i opened my account with mbna, like i did with other banks.

Marcusm

Father wrote: »

Hi Folks

Long time lurker and first time poster - hopefully you can help me with a quandry.

My son has just finished college, is currently unemployed and will probably (and very unfortunately imo) be going to Australia in the summer in search of better times.

He has c. €10k in education debt on a MBNA credit card and I'm hassling him to close it before he goes. I've offered to give him €5k (it's all I can spare) and am telling him to write to MBNA requesting a settlement and offering them a 'take it or leave it' choice. To be honest he wants to just go and let them write pointlessly to him here.

Anyway it has now transpired that he applied for the credit card online while in college (2006) and the card arrived without him having to actually sign anything. I work in a Bank (not this kind of area) and can't understand how the card issued without money laundering compliance (and a signature) but he is positive this is what happened. Apparently he also let on during he submission that he was working (hence the €10k limit) and wasn't asked for any bank statements or payslips etc etc. He said he and his mates had been drinking a few beers when they tried the application "for the craic". The card arriving was a complete surprise the following week.

Now I know that he spent the cash and should morally pay it back but the fact remains we are not a wealthy family - the €5k is all I have. My son wants to.....

1) Write to them asking for a copy of his contract
2) Assuming they can't provide one - tell them to remove their product from his ICB as they had no right / contract to put him him there
3) Cancel the DD and basically tell them to get stuffed

My concerns are

1) Will they chase him legally? Can they with no contract?
2) Would it be better to offer the €5k and outline the alternative and see what they do?
3) While they have no contract, if it went to Court my son would have to admit he spent the cash and I don't want him to face a large legal bill aswell as fines etc etc

Any other advice guys?

Thanks very much for your help.

It's your 5k, not his. Personally, I would have him open the discussion with MBNA without discussing the 5k and inquire as to what they want to do based on his intention to emigrate. Keep the 5k in your back pocket until you establish how they want to play it. Separately, it would be worthwhile explaining to your son that lying on credit applications may be an offence (Criminal Justice (Theft and Fraud Offences) Act 2001)) and that it might be worth pondering on this in future.

If MBNA agrees to write off or substantially write off the debt, I think you'd need to come down on your son pretty heavily to make sure that he didn't try it again.

dudara

The simple fact is that your son knowingly spent €10,000 on the credit card. That indicates acceptance on his part of the T&Cs.

Things were very different back in 2005/2006 when it came to banks & financial institutes. As far as I remember, the code of conduct was only put in place around 2006-2007, so things were laxer before then.

Your best course of action here out of all the options you've listed is to contact MBNA and offer the €5k to settle the debt in full. Hopefully they might accept the write off. And then I've give your son a good clip around the ear for causing you this bother.

daheff

you should not pay MBNA on your sons behalf. Give him a clip around the ear and a kick up the backside. tell him to send money home australia every month to pay off the debt.


if he thinks he can just walk away from this debt, he'll prob try to do the same whenever hes leaving australia.

glic71rods46t0

It appears that your son has a very bad attitude.
As a parent I think you should instil a sense of responsibility in your son.
He spent the money and now seems intent to walk away without paying. MBNA will probably go for judgement and your son may have problems upon his return from Australia when he wants to settle down and get a house etc.
Credit is now a scarce commodity and those who demonstrate an unwillingness to accept their responsibilities when time get tough will pay for it in the long term.
I expect to see a thread here in 3 - 4 years time saying "Son refused a mortgage" due to some petty little credit card debt from years ago, which he only took out to put himself through college (cue the emotional tears) and now the nasty banks won't just let bygones be bygones.
A lot of finance co's are now pursuing defaulters in Australia and Canada via debt collection agencies.

Get your son to "man up" and get a payment plan that he can service from Australia

Savman

Father wrote:

the card arrived without him having to actually sign anything.

He signed the back of the card, right?

Weak, weak defence.

Father

Christ, I don't know. Maybe I'll tell him he's on his own and let him do it his way. He'll leave and probably settle with them for whatever he can afford after a couple of months working in Oz.

He's not going to need a mortgage for 5 - 10 years minimum so hopefully it'll have fallen off the ICB by then (5 year timeframe right?).

I probably didn't explain it as well as I should have - he is very stressed about all this - the debt relates primarily to him writing MBNA cheques to the landlord for rent etc - not booze and/or holidays. He has sworn to himself he'll never get personal debt again. It's a lesson I wish we could all learn when we're in our early 20s!

chris85

Father wrote: »

Christ, I don't know. Maybe I'll tell him he's on his own and let him do it his way. He'll leave and probably settle with them for whatever he can afford after a couple of months working in Oz.

He's not going to need a mortgage for 5 - 10 years minimum so hopefully it'll have fallen off the ICB by then (5 year timeframe right?).

I probably didn't explain it as well as I should have - he is very stressed about all this - the debt relates primarily to him writing MBNA cheques to the landlord for rent etc - not booze and/or holidays. He has sworn to himself he'll never get personal debt again. It's a lesson I wish we could all learn when we're in our early 20s!

He paid rent with it, thats bad! He is obviously not great with finances at all if he is paying rent with his CC. He should pay it all back. He may learn a lesson from it.

Doest matter if it wasnt holidays or the booze its all the same, he was funding a lifestyle which he couldnt afford. Personally i would let him battle this himself. Bailing him out teaches a bad lesson. If you do give him money I would put a strict agreement in place for him to pay you back. Make sure of that.

xxlauraxxox

wish my dad would step in and pay off my debts instead i got a very scary talking to about how i had ****ed up my credit rating and who i was gunna found it hard to get a mortgage!!!!!i rang the company and set up a plan i could afford and than if there was an extra 50 or 60 i could afford at the end the month id pay that off 2.all he has to do is get on the fone nd sort out a plan with them and they are more than happy to talk cus his willing to settle

Rabidlamb

yr0j9h7bawd18v wrote: »

A lot of finance co's are now pursuing defaulters in Australia and Canada via debt collection agencies.

Total & utter balderdash, your scaremongering makes me suspicious.

Nonoperational

It's probably doable to come to an agreement with them to pay off a set amount each month. If you want to help, pay a few of these until he gets sorted in Aus. When he gets a job he can wire home the required €350 a month or whatever they agree and hopefully he'll have a decent job in Aus and it won't hurt him too much. That way he has taken responsibility for the debt but it shouldn't interfere with him too much.

If you want to help a bit more you could pay half the monthly repayments or something like that. €10k may seem now like a very large debt but it's still very manageable.

Xcellor

phew. 10k. That's a lot of unsecured debt...

Don't pay it for him. Let him send money home. Stay completely out of this. You are not responsible legally speaking for the money he owes. I share the opinions of some that you should give him a kick up the arse though.