He said his inability to get further fixed rate loans through the bank meant he would be exposed to higher interest rates when he refinanced with another bank. Also, the bank had failed to properly compensate him for the consequences of its decision, and in so doing breached its obligation to treat customers fairly and reasonably. 

Our investigation

The loan agreement between Wren and the bank contained no obligation to accept any future applications for fixed rate loans, so its decision not to accept applications beyond September 2023 breached no contractual obligation to him. The bank had never promised Wren it would continue to accept fixed rate applications. The bank certainly had an obligation to treat customers fairly and reasonably, as required under the Code of Banking Practice, but what is fair and reasonable depends on the circumstances of each case. There was nothing inherently unfair or unreasonable about the bank’s decision, which was purely a matter of commercial judgement. Nonetheless, it had taken steps to ease the impact of its decision on affected customers. First, it said it would offer Wren floating rate loans from September 2023 through to July 2026 when the last of his loans expired. It would also discount the floating rate by 1.5 per cent. In addition, it would waive any early break fee or other associated refinancing fees should he choose to refinance with another bank. In the circumstances, we were satisfied the bank had met its obligation to treat Wren fairly and reasonably.

Outcome

We did not uphold Wren’s complaint.