Our investigation 

Asher had disclosed expenses, such as child support and gym membership fees, on his loan application form that were not taken into account in the bank’s affordability assessment. The bank said it had reviewed Asher’s transactional history to confirm the figures entered on his application form, but we found his statements showedvarying amounts for weekly board that were more than the amount recorded on his application and used for the bank’s assessment. Also, Asher was regularly using his existing loan to withdraw cash for daily expenses and was over his limit at the time he applied for the top-up. We considered this indicated he could not meet his repayment obligations even before the top-up. The bank’s debt collection team continued to regularly contact him during our investigation seeking to set up a repayment arrangement for the outstanding debt. He found these contacts very stressful, particularly since he was not working at the time. On each occasion, he would tell the collection team we were investigating his case, but it would merely say it had no information about this.

Outcome

The bank agreed to reduce Asher’s loan to the amount he had owed at the time he sought the top-up from $8,100. It also agreed to restructure Asher’s debt to make repayments more affordable. And finally, it offered Asher $2,000 as compensation forthe stress and inconvenience it had caused him by continuing to contact him while we were investigating his complaint. Asher accepted the bank’s offer.