Kit complained to us in January 2024 that the bank breached its contract with him when it transferred his lending to another institution. He also complained the bank had reneged on offering the 1.5 per cent discount – an offer he said formed part of his contract with the bank, and thus of the new institution, too. These failures, he said, would cause him to pay a significant amount more in interest.

Our investigation

We examined the terms and conditions of Kit’s loan, as well as the bank's communication about the discounted floating rate. We found the bank was entitled to transfer his loans. We also found the bank had not reneged on its promise regarding the discount, but its communication of that offer had been unclear. The bank had been clear that it would be offering customers a discount to the variable rate at the point that their existing interest rate agreements expired and there was no ability for the customer to move onto another fixed rate period with the bank. The customer would be able to accept the bank’s offer of a discounted variable interest rate at that time. In the circumstances of Kit’s complaint, in the intervening period between the bank announcing its decision in June 2023 and the first of Kit’s fixed rate periods expiring, the bank transferred its obligations under its agreement with Kit to another institution. That institution was not then obligated to make the same offer when its loan came off its fixed rate period in March 2024. We did find that the bank’s communication to Kit in June 2023 was not clear that the discount to the variable rate it would be offering customers when their fixed rate periods expired was subject to change in certain circumstances – such as the bank transferring its rights and obligations under the loan agreement to another party. Nonetheless, any confusion or lack of clarity caused by the bank’s communication was remedied when it advised Kit very clearly in October and November 2023 that there would be no obligation for the different institution to offer any discount to its variable rate when Kit’s existing fixed rate period for one of his loans ended in March 2024. 

In addition, we found Kit suffered no direct financial loss or even any significant stress or inconvenience because of the bank’s unclear communication in June 2023. Had the bank been clear at that time, it was highly unlikely Kit would have chosen to do anything differently at this point. The rates Kit had fixed were significantly lower than market rates at the time, and when the bank did eventually communicate its position clearly, he still chose to remain with his current rates and fixed periods.

Outcome

We did not uphold Kit’s complaint.