Customer wrong in his recollection about call to discuss interest rates

Categories:
Early repayment charges,
Summary:
Bartholomew had a one-year, fixed-interest loan, and in July 2021 he called the bank to ask about moving to a longer-term, fixed-interest loan. He said the staff member told him he would have to pay a $3,000 early repayment recovery fee if he broke his existing fixed-rate term. He later learned he would not have had to pay such a fee and he complained to us in early 2024 that the bank's incorrect advice caused him to miss out on significant savings through lower interest payments.
Published:
December 2024

Our investigation

We reviewed the staff member’s notes of the conversation. The notes described a conversation about the possibility of Bartholomew’s moving to lower rates. At the time of the conversation, the bank’s rates were higher than the rate Bartholomew was committed to, and the staff member pointed out this fact. The staff member recorded that Bartholomew decided not to pursue the matter any further.

The calculation to determine whether a customer must pay an early repayment recovery fee is a complex one – and certainly, not one that a frontline staff member could perform on the spot. It requires the use of an internal digital tool to determine the applicability of such a fee. We found no record in the bank's systems of any use of that tool in relation to Bartholomew's loan.

We therefore found the bank had not misled Bartholomew, and that Bartholomew had suffered no financial loss.

Outcome

We did not uphold Bartholomew's complaint.

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