Suki said the bank subsequently reversed two loan repayments and cancelled a “force payment” function on the loan without notice, resulting in her arrears increasing. (The “force payment” function takes a home loan payment from the funding account, even when the balance of the funding account is insufficient to cover the payment).  In September, the bank gave Suki a backdated repayment holiday, thereby clearing the arrears but also causing the loan balance to increase more than she had expected.

After the backdated repayment holiday was applied to the loan, the bank failed to take any repayments in October, an omission Suki believed was connected with the way the repayment holiday was implemented. In November, repayments resumed, but with a new reference number, a change that led Suki to believe the bank had set up a new payment authority without her knowledge. Suki complained that the bank’s actions and inadequate communication had caused her significant stress and inconvenience.

Our investigation

We reviewed the bank’s call notes and found the staff member’s communication fell short. The staff member had questioned Suki’s spending habits in an insensitive manner. The bank had ignored Suki’s request that this person never call her again. It had also reversed transactions and cancelled the force payment function without notice. All in all, the bank’s communication had been poor. Also, the bank deducted nearly $280 a fortnight too much after the repayment holiday ended, causing three payments to be dishonoured and the payment deduction authority to be cancelled. When the bank set up a new authority in November, it inevitably used a new reference number, but dismissed Suki’s numerous – and justified – inquiries about the change. Her arrears grew, along with her stress. 

Outcome

We recommended compensation for stress and inconvenience of $2,500, the refunding of a small amount of interest, and the capitalising of most of her $3,800 arrears to her loan. Suki accepted this.