The bank told her it would consider consolidating all of her external debts into her home loan, but it changed its mind after valuing Maeve’s property and finding it was worth less than expected. Instead, the bank offered to pay off all her external debts and not seek repayment of those debts, or her current home loan arrears, thereby making it affordable for her to resume loan repayments. This arrangement would last until she sold her home, at which point the bank would take money from the sale proceeds to cover the external debts and loan arrears.

Our investigation

We found the bank had clearly explained to Maeve how the arrangement would work including that it would advise credit reporting agencies of her loan defaults. However, we also found the bank had failed to pay off one of Maeve’s external debts, which Maeve had continued to pay off herself, despite struggling to meet her loan repayments. The bank offered her $1,200 to cover all her payments towards that debt, along with $800 for the stress and inconvenience the bank’s error had caused.

Outcome

Maeve accepted the bank's offer of $2,000.