Donovan complained that it was unfair for the bank to report him to credit agencies and also to charge him an unarranged overdraft fee. He said the bank “chose to lend” to him by extending an unarranged overdraft to him, and he questioned how the bank could, in these circumstances, report a “missed payment” to credit agencies. He also said the terms and conditions of his line of credit did not say that the bank would report repayments that took him into unarranged overdraft as late or missed.  

Our investigation

We found that Donavon’s line of credit went into unarranged overdraft each month between July 2020 and February 2021 when the bank took out loan repayments. The terms and conditions of his credit facility said he should not let it go above the credit limit, and that the bank could share any information about his use of the facility with “credit reporters”. The bank was therefore entitled to report his credit history to credit agencies. The bank did not “choose to lend” to him when he had insufficient money in his credit facility to cover monthly repayments: rather, it was choosing to allow Donavon to go above his credit limit to avoid declaring him in default of his loan. Finally, the terms and conditions at the time gave the bank the right to charge a monthly unarranged overdraft fee of $5 when the facility was overdrawn by $10 or more. 

Outcome

We did not uphold Donovan’s complaint.