Bank’s use of email an acceptable way to communicate loan switch

Categories:

Service problems, Lending,

Summary:

Spencer had a loan with his bank, which announced in June 2023 that it intended stopping retail banking activities in New Zealand but would nonetheless honour all existing contractual agreements with customers. In October, it told Spencer it would transfer his loan to another bank, which would take on the loan subject to all existing contractual commitments.

Published:

November 2024

Spencer, who was based overseas at the time, became aware of the change only on the day after his loan was transferred to the other institution. He had received emails from the bank but had not noticed them. Spencer complained that the use of email for such an important change was inappropriate. He also complained that the transfer was a breach of the bank’s contract with him because the new institution did not offer internet banking services to customers outside New Zealand and Australia.

Our investigation

We reviewed the bank's communications with Spencer and were satisfied it was appropriate for the bank to have communicated the change by email. We also reviewed the terms and conditions of Spencer’s loan contract and found it did not oblige the new bank to provide internet banking access to Spencer.