Bank properly considered hardship extension request before rejecting it

Categories:

Vulnerable customers and hardship decisions, Lending,

Summary:

In August 2021, Harry obtained a $1.3 million loan from the bank to buy his former partner’s share in their home. In August 2023, he told the bank he was struggling to keep up with repayment and asked for help. The bank approved a three-month deferral of repayments. When this ended in November 2023, Harry asked for an extension, but the bank refused, saying he had not supplied the necessary information. Harry disputed this, saying he had provided the documents. He did not keep up regular repayments after that, and the bank began a mortgagee sale.

Published:

February 2026

Harry complained that the bank refused to consider his request for hardship assistance beyond three months. He said the bank failed to properly assess his request for an extension despite it receiving the required documents, he said the bank did not offer restructuring or other support options after the hardship period ended. He also said the bank unfairly escalated enforcement action – in breach of its legal obligations – and did not fairly consider his offer to pay a lump sum towards the arrears.

Our investigation

We found the bank met its obligations under the Credit Contracts and Consumer Finance Act 2003 and the Responsible Lending Code when it approved the initial hardship application in September 2023. It assessed the application based on the information Harry supplied, and it also explained the limits of its assistance. In response to the second hardship application, the bank requested updated documents, including rates information, an employment contract, a budgeting sheet, and bank statements. The bank sent Harry reminders and set a deadline of 7 December 2023 to respond. On 14 December, the bank declined the application, saying it had not received the documents. Harry said he sent the documents on 29 November and again on 14 and 16 December. In February 2024, the bank asked Harry to forward the emails, but he did not do so. Instead, he proposed a repayment plan, which the bank accepted. However, he did not maintain the arrangement, and the bank eventually began recovery action. In support of the dispute, he later provided printed and scanned copies of these emails, but the bank’s internal searches found no record of receiving them. Harry said his email account was compromised in August 2024, and he could not provide us with electronic copies. He did not respond to our requests for documentation confirming the identity theft or screenshots of his email history.

We found the bank did not receive the requested documents at the time. He did not provide the bank with the printed and scanned copies of his hardship responses, even when it made it clear to Harry in February 2024 that it had not received them. It received this information only in September 2025, during our investigation. We found the bank gave proper consideration to the hardship extension request, and that it worked in a reasonable manner with Harry to come to an arrangement to clear the arrears.