2015 - 2016

Lending

Property lending

Mr T had two companies – ABC Ltd and XYZ Ltd. Both companies had loans with Mr T’s bank which he provided personal guarantees for. ABC Ltd got into financial difficulties and closed. A few years later, the bank advised Mr T it would release him from his guarantee for ABC Ltd and wrote off its outstanding debt.

A couple of years later Mr T lodged a complaint with the Commerce Commission about the sale of swap rates to XYZ Ltd by his bank. The Commerce Commission negotiated an agreement for the bank to pay compensation to him and other affected customers. However, the bank wanted to set-off the payment to XYZ Ltd against ABC Ltd’s written off debt. This meant that Mr T wouldn’t get any of the compensation money.

Mr T complained to the bank and the Commerce Commission that this was unfair because the bank had written of ABC Ltd’s debt and released him from the guarantee. But they both said bank was allowed to do this under the terms of the agreement between the bank and the Commerce Commission. Mr T then asked our office to consider his complaint. We were unable to investigate because our rules say we cannot consider a matter which has already been before another independent complaints body. We suggested he seek independent legal advice.