Bank failings lead customer to believe her credit rating had been lowered

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Bank failings lead customer to believe her credit rating had been lowered

Categories:

Concerns about lending decisions,

Summary:

Peggy and her husband had a home loan through a family trust. When they separated, Peggy asked the bank about a mortgage holiday. However, the bank failed to follow up on her request, and in September and October 2024, two home loan repayments were reversed because of insufficient funds in her account. The bank told Peggy this would affect her credit rating. Peggy said her husband was financially abusing her, and that the bank should have referred her to the special care team earlier. She also said the bank should have nominated one person as her point of contact to help sort out her financially complex situation. In addition, she said the bank’s suggestion of putting a block on their accounts or setting up a business account to protect her financially did not meet her needs. The bank offered Peggy $1,500 in recognition of its failure to get back to her about a mortgage holiday, and for the stress it had caused her.

Published:

May 2025

Our investigation

We considered the bank appropriately applied its policy on referring her to a special care team. A separation is not in itself grounds for such a referral. However, matters changed after a repayment bounced a second time and the conversations with Peggy changed. The bank staff then offered to make a referral.

We also considered the bank offered – and explained – the usual range of options for protecting her account. However, on checking Peggy's credit record, we discovered it was not affected by the missed mortgage repayments because it was the trust that had the mortgage with the bank. The bank had given Peggy incorrect information and caused her considerable stress. Peggy had relied on what the bank told her about her credit rating, and her lawyer had used this in separation negotiations, undermining her credibility during the negotiations. The bank increased its offer to $5,000.