Couple suffered no direct loss over house sale debt

Suspending debt recovery action,
In 2012, William and Kath agreed to pay the bank $150 a fortnight to repay a $65,000 shortfall from selling their house. In January 2021, they still owed $45,000 and wrote to the bank to complain about its response to their financial situation, stating they found its repayment terms unethical and intimidating, and they were considering bankruptcy if they could not reach an agreement about the debt.
April 2022

They asked it to accept $9,000 in full and final settlement of their debt. However, their complaint went unanswered for two months because of administrative errors at the bank. Eventually the bank considered their request and agreed to settle the debt for $9,000 and entered into an agreement to that effect. However, William and Kath remained dissatisfied with the bank's handling of their debt and the subsequent administrative errors and sought further compensation for this. The bank offered them $2,000, which they did not accept, saying they had suffered a loss of more than $40,000 as a result of the bank's harsh repayment terms and management of the debt. They asked us to investigate.

Our investigation

Our rules provide that we can decline to consider a complaint if the customer has not suffered a direct financial loss or significant inconvenience. In the case of William and Kath, the bank had written off $36,000 owed to it and offered compensation of $2,000 – putting them in the position of not being liable for $38,000 of debt they owed to the bank. To consider the complaint we needed to be satisfied the alleged wrongdoing had caused them direct loss and inconvenience in excess of $38,000 and we were not satisfied this was the case.  We noted that most of the $40,000 William and Kath alleged they had lost related to lost opportunity, not direct financial loss.


We declined to consider their complaint further.

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