better banking

Case - 48614

2016 - 2017

Lending

Non-property lending

Ms K was in New Zealand on a working holiday.

Her employer wanted to extend her working holiday visa so she could work for the company for longer, as she was an excellent employee.   Her job required a car and her employer offered to pay her extra if she had her own. Ms K approached the bank about a loan and was initially declined because she was a new customer. She re-applied for the loan a while later and the bank approved it noting her high income and low expenses, her temporary visa and the application to extend it.

Ms K’s situation took a dramatic turn for the worst when her employer restructured her position and other life events affected her ability to pay the loan. She had spent up to her credit card limit and also had an overdraft.  When her bank demanded repayment of her loan, she complained to us as she questioned whether the bank should have lent her the money in the first place.

We reviewed Ms K’s file. We told Ms K the key point was that the obligations on the bank regarding whether or not to lend her money was at the point of her application for the loan. We noted that at that point there did not appear to be any red flags about the impending difficulties.

She explained that her situation had improved, she was grateful for a third party looking over her file and she did not want to progress the complaint any further. The case was closed on that basis.