Loan decision not related to customer’s age or disability

Categories:
Concerns about lending decisions
Summary:
Laila wanted an extension to her home loan. She was in her 50’s and experienced difficulties with mobility as well as a mental health condition, caused by injuries. Despite this, she made several appointments at her local branch – and got herself to those meetings – to obtain the information she needed about applying for an extension. Laila found the service she received during these visits to be unsatisfactory. She complained to the bank that staff had treated her rudely and sent her documents she couldn’t read. She also considered the bank’s decision to decline her lending request was discriminatory because it was based on her age and disability. She did not find the bank’s response satisfactory and asked us to investigate.
Published:
May 2020

Our investigation

We found no evidence the bank’s decision was discriminatory. On the contrary, the bank gave us documents showing that Laila’s income, after deducting expenses, could not support the extra lending she sought. The documents showed it had been prepared to lend her a lesser amount, based on those figures. We therefore considered the bank had declined her application on the grounds she could not afford to service a bigger loan, not because of her age or disability. This was a commercial and responsible decision, and one the bank was entitled to make.

However, we found that the bank’s communication with Laila could have been better. The bank had agreed to a communication plan when dealing with Laila after she had informed the bank of her disability. As part of the plan, the bank had agreed to email Laila a summary of the conversation of any lending appointment so she had a written record of the meeting. After one such appointment, the bank did not send her a summary of the conversation, and Laila had a substantially different recollection of what transpired compared to that set out in the bank’s notes. We believed the bank could have prevented this confusion by sticking to the agreed communication plan. We suggested the bank consider making a goodwill gesture in recognition of this fact. The bank offered $250 for the error.

Outcome

Laila accepted the offer.

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