A few months later, when Naomi missed a repayment, the bank referred her credit card debt to a debt collector, listed a default on her credit file, and closed her bank accounts. Naomi complained that the bank had not properly considered her hardship request. The bank said she was ineligible for help because she was already in arrears and was applying to withdraw money from KiwiSaver on hardship grounds.

Our investigation

We pointed out to the bank that the Credit Contracts and Consumer Finance Act 2003 requires lenders to consider requests for help on the grounds of unforeseen hardship, provided the customer is no more than two months in arrears. Naomi was only six weeks in arrears. Her KiwiSaver hardship application was irrelevant. We also suggested to the bank’s communication and response to Naomi’s concerns was inadequate.  The bank then agreed to remove the default listing, refund the collection fees, and reduce the debt by $2,500 in recognition of stress and inconvenience.

Outcome

Naomi accepted the offer.