My in-laws, Ray and Rosemary, were persuaded by their niece and her husband (Catrine and Neil Halls) to invest £70,000 to start a soft-play business, i-Play in Clydebank.

Bank of Scotland

Neil & Trine Halls

As well as investing their savings, they then had to offer their house as security for a loan for the business from the Bank of Scotland since the Halls had large existing debts.

Rather than being grateful, the Halls were rather unpleasant once the business opened. Ray and Rosemary were effectively bullied out of the business. Neil removed Rosemary’s shares that were promised her and removed Ray as a director. Their solicitor told them that they were breaking Company Law but they dumped their solicitor.

Ray and Rosemary were kept at a distance by the Halls. They were excluded from meetings, decisions and financial details.

Bank of Scotland

Bank of ScotlandThe Bank of Scotland were aware of a breakdown in the relationship between Ray, Rosemary and the Halls. Ray had been excluded from all business activities relating to iPlay including, crucially, financial matters. The Bank of Scotland told Ray and Rosemary that they were key stakeholders in the Business and they would make no changes without informing them.

Despite this, and without informing Ray or Rosemary, the Bank of Scotland gave an overdraft to Mr Halls and iPlay. The overdraft was later extended from £10,000 to £25,000. This was without the consent or knowledge of Ray or Rosemary.

The business inevitably failed. Ray & Rosemary weren’t notified of this. It wasn’t until a whole year after the Bank of Scotland gave the Halls the overdraft when they received a demand to immediately pay back the overdraft in full. An overdraft that they never even knew about. The Bank of Scotland are now trying to take their home off them to pay the debt run up by the Halls.

And Now?

Bank of Scotland

iPlay phoenix company

After getting the overdraft from the Bank of Scotland, the Halls had set up a phoenix company and transferred all iPlay’s assets so they could continue running iPlay in the same premises with no debts. So the business is thriving despite iPlay being officially in liquidation.

Who was the mysterious director of the new business that was set up? Trine Hall’s mother, Anna Allan. Can you also guess who was appointed a director of this new business in October 2015? Yup, Neil Halls.

So Neil Halls running the same play centre in the same venue with the same play frame (which Ray & Rosemary paid for) under the same name! Only no debts because they dumped them. And it’s Ray & Rosemary that are to pay them back.

My thoughts

This is a nightmare come true. Imagine if this happened to you. You intended to help someone out and they respond by getting an overdraft which was secured on your house then running riot with it. The first you know about it is when the bank tell you that you need to pay it back. Horrendous. And all of this happened when Rosemary was fighting cancer.

The Bank of Scotland were irresponsible to give an overdraft to the Halls secured on Ray and Rosemary’s house when they knew that the business relationship had failed – when they knew that the only people remaining at the business were not credit worthy. The Halls weren’t credit worthy. That’s why Ray and Rosemary had to put up their house as security.

Bank of Scotland

Ray and Rosemary

Ray and Rosemary didn’t even know this £10,000 overdraft had been granted.

Given this, it is reasonable that Ray would have concluded that the Bank of Scotland would not give an overdraft to the Halls or, at the very least, would have consulted him further if they were going to grant an overdraft.

In giving an overdraft without consulting him, they placed their home at risk without giving him the opportunity to manage the finances in a way that would allow him to address that risk. It is reasonable to assume that Ray may have taken a different course of action had he realised that additional credit had been secured on his home.

The Bank of Scotland failed in their duty by not offering Ray an opportunity to defend his property from the financial mismanagement of the Halls and iPlay.

The Bank of Scotland claimed they were not permitted to inform Ray and Rosemary about iPlay’s overdraft, but when confronted with a signed letter of permission from iPlay, their Chief Executive finally admitted they could have provided this information but were not ‘obligated’ to do so. The Bank of Scotland had previously required iPlay to provide this letter for the guarantors of the loan to protect their own interests but ignored the fact it should have protected Ray and Rosemary’s interests.

And now the Bank of Scotland want to take Ray and Rosemary’s house. The Halls have to pay nothing.

The Bank of Scotland’s current advertising line? “Decisions well made.” You couldn’t make it up….

How would you react if the bank knocked on your door and told you to repay a £25,000 that they had never told you about?