How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Nicola-mod Your Own Question

Nicola-mod, Moderator
Category: Law
Satisfied Customers: 9
Experience:  Moderator
Type Your Law Question Here...
Nicola-mod is online now

I took a bank loan out to buy a business. I didnt proceed with

Customer Question

I took a bank loan out to buy a business. I didnt proceed with the sale as the lease was not as they said it should be. The bank are now saying that this is fraud and want their money paid back that they paid into my account. Is this fraud? I cant see how, as it was in my own name and just because i never actually bought the business and changed my mind i cant see why they are accusing me of fraud.
Submitted: 3 years ago.
Category: Law
Expert:  Alice H replied 3 years ago.
Hello and welcome to Just Answer.

My name is Alex and I'm happy to help with your question today.

Are you going to repay the loan if its not being used for its intended purpose?
Customer: replied 3 years ago.

Yes, I have already made 2 loan repayments towards the loan. the 3rd is due next week.

Expert:  Alice H replied 3 years ago.
I understand. But what have you used the money for?
Customer: replied 3 years ago.

Nothing. It is sitting in my savings account while i look for another business to buy. Is that not legal?

Expert:  Alice H replied 3 years ago.

In simple terms, to prove fraud, the bank would have to establish that, when you applied for the loan, you were (i) dishonest or (ii) made a false statement or (iii) deceived them.

The fact that a business deal fell through does not mean necessarily you were dishonest. However, if there was no business deal and you dishonestly obtained the loan or made a false statement to get it, then you could be liable to repay the full sum even though you are repaying the debt.

So the issue is whether the information you gave the bank to obtain the loan was true. If the information was untrue then they can demand repayment of the full sum. Failure to do so could give them grounds to sue for breach of contract and/or civil fraud or (although this is rare) investigate whether you have committed a criminal offence of fraud.


Customer: replied 3 years ago.

I was not dishonest. I told them that i needed the business loan to proceed with a sale of a business in my own name. They knew i didnt have the keys, and spoke to my lawyer on the day the money was transferred so they knew the business had not been purchased. Nothing untrue was said. So, it cant be fraud can it?

Expert:  Alice H replied 3 years ago.
I agree.

But the money is not being used for the purpose for which it was borrowed so strictly speaking you could still be in breach of loan agreement.

Customer: replied 3 years ago.

In realistic terms though if i continue to make the loan repayments would they really consider trying to pursue a fraud charge against me?

Expert:  Alice H replied 3 years ago.
Yes they could try.

I suppose it really depends on the amount of money involved.

I'm assuming it must be a large sum otherwise they probably wouldn't be interested.

But strictly speaking even if you continue making the repayments you would still be in breach of the agreement if the money has not been used for its intended purpose.

Its difficult to see how this could be fraud but you have to consider whether you options:

1. Repay the entire loan and avoid any further aggravation.

2. Refuse to repay the loan with the possibility of collection activity and/or possible investigations into civil/criminal fraud.

Customer: replied 3 years ago.

It was £32,000.

Do you think i have reason to worry?

I am just going to continue to pay the monthly repayments.

Expert:  Alice H replied 3 years ago.
Unfortunately I can't answer that question because I don't know exactly what the bank's stance is going to be. But if they're already talking about action to recover the money then its probably safe to assume that this is what they'll do.
Expert:  Nicola-mod replied 3 years ago.

Just a quick reminder, there is an unrated answer waiting for you here from the Professional.

If the Expert was helpful, rating their answer as satisfactory transfers your deposit to them – this is how the Expert is compensated. If you still need help with your question, please feel free to reply to the Expert on this question page. You may ask as many follow-up questions on the same question page as you need until you are satisfied.

Thank you,

What Customers are Saying:

  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther

Meet The Experts:

  • Jo C.

    Jo C.


    Satisfied Customers:

    Over 5 years in practice
< Last | Next >
  • Jo C.'s Avatar

    Jo C.


    Satisfied Customers:

    Over 5 years in practice
  • Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    Qualified Solicitor - Please start your question with 'For Ben Jones'
  • Buachaill's Avatar



    Satisfied Customers:

    Barrister 17 years experience
  • Max Lowry's Avatar

    Max Lowry


    Satisfied Customers:

    LLB, 10 years post qualification experience
  • UK_Lawyer's Avatar



    Satisfied Customers:

    I am a qualified solicitor and an expert in UK law.
  • Kasare's Avatar



    Satisfied Customers:

    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • Joshua's Avatar



    Satisfied Customers:

    LL.B (Hons), Higher Prof. Dip. Law & Practice