Bank’s poor communication largely responsible for customer missing last loan repayment

Categories:
Direct debits,
Summary:
In November 2023, Ashton’s bank announced it would stop offering retail banking services in New Zealand and had sold its customers’ home loans to another bank. It contacted Ashton to say he would need to talk to the other bank if he wanted his loan repayments to continue being directly debited from his account. Ashton duly contacted the other bank and set up a direct debit from a different account. Several months later, Ashton discovered he had missed the final payment before the loan was transferred to his new bank and was in arrears. He complained to his former bank that it should have alerted him to the fact he had a final payment owing, but it maintained he was responsible for ensuring he made repayments on time.
Published:
August 2024

Our investigation

In examining the bank's correspondence with Ashton, we found he had been clear he wanted repayments to come from a new account, and the bank should have told him he would need to make his next payment manually before setting a direct debit with the new bank. Its failure to do so made it at least partly responsible for the missed payment. Ashton had incurred a penalty of less than $10, but his dealings with the bank had been frustrating inconvenient. 

Outcome

The bank offered Ashton $400 in recognition of the inconvenience it had caused, and he accepted the offer.

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