However, the bank did not act on the new loan agreements, and Luther did not make any payments to the bank. After 18 months, the bank repossessed both vehicles. Luther complained that the bank failed to restructure the loan as agreed and asked for the vehicles to be returned and the lending arrangements corrected.

Our investigation

We looked at the communication between the bank, the dealer and Luther and learned the bank had only conditionally approved splitting the single loan into two loans, but had not clearly communicated this fact. Nor had the bank resolved the matter when Luther raised it. However, we considered it unreasonable for Luther to stop making any payments. 

Outcome

The bank offered to restructure the original loan in to two loans at a lower interest rate, resulting in an interest saving of $7,700. It also waived repossession costs of $3,259 and agreed that Luther could retrieve the vehicles. Luther accepted this offer.