In September the following year, the bank called him about the overpayments, and the following month the bank agreed to let him make a lump sum payment of $13,000 towards the loan, leaving a balance of $5,000 to pay. Elias deposited the $13,000, but the bank did not credit it towards the loan, instead holding the money in the overpayment account until December. When an account statement showed the bank had not done as agreed, and that he was therefore paying more interest, Elias contacted the bank. It said he had yet to sign a “variation agreement” document. However, the bank had not explained this fact to him or sent him the document for signing. A few days later, the paperwork was completed, and the bank subsequently agreed to a pay-out figure that took account of the extra interest he had paid, but Elias remained unhappy with the way he had been treated and complained to us.

Our investigation

Elias had not suffered any financial loss, so we were left to look at the question of compensation for stress and inconvenience. The bank had offered him $150 but increased this amount to $1,000 after we explained our position, which was that the bank should have made clear he had to sign a document formalising their agreement and that it should have received this signed document before requesting the $13,000. Furthermore, it should have taken steps to chase up the whereabouts of the document, and it should not have allowed the money to sit in an overpayment account for two months. Given all the stress these basic failings had caused, we considered the bank’s offer of $150 to be inadequate.

Outcome

Elias accepted the bank’s offer of $1,000.