Lola complained that, but for the bank's advice in early 2021, she would have sold her house and got a good price. Instead, she had been forced to live in a home that had deteriorated to the point of being unsafe, requiring significant roof and electrical repairs.

Our investigation

We found no evidence the bank had advised Lola against selling her home, or otherwise prevented her from selling it. Rather, the bank’s records showed that in early 2021 she made clear she wanted to keep the property and had a five-year plan to fix it and get out of arrears. However, we found the bank took no action on her loan application, lodged in July 2021, for nearly five months and failed to update her about its progress – in breach of its obligation to communicate with Lola clearly and effectively. Although undoubtedly stressful for Lola, this failing made no difference to her situation because she lacked the income to meet the terms of the extra lending. Lola believed the bank could have approved the lending on interest-only terms, but it had no obligation to do so, and could lend to her only if satisfied she could afford it over the life of the loan. Furthermore, in 2023, the bank approved lending for urgent roof repairs on an exceptional basis.

Outcome

The bank offered $1,000 compensation in recognition of the stress and inconvenience caused by the delay in processing her loan application. Lola accepted the offer.