Maddison and her husband later applied for a loan at another bank. It approved their joint application without requiring that her husband's name be added to the title. Maddison complained to her previous bank that it had wrongly declined her applications, delaying work on her property and incurring legal costs of $1,500 in moving banks. The bank reviewed her applications and confirmed she did not have enough income to meet its affordability criteria. However, it acknowledged it had wrongly advised her that her husband needed to be on the title in order to be a co-borrower. It offered her $2,500, but she remained unhappy and complained to us.

Our investigation

Banks are under no general obligation to lend money to customers, and their decisions about whether to lend are usually a matter of commercial judgement – something we do not have the power to investigate. We can, however, investigate administrative errors in the lending application process. When considering the applications in Maddison’s name alone, the bank had to be satisfied she could afford the lending on just her income, even if her husband guaranteed the lending. We found the bank's offer of $2,500 was fair and reasonable compensation for its wrongdoing in relation to the fourth top-up: it covered Maddison’s costs and gave her compensation of $1,000 in recognition of the stress and inconvenience it had caused.

Outcome

Maddison did not accept the bank's offer and said she would take the bank to court.