Our investigation

We considered whether the bank made errors in its lending decisions, whether it communicated clearly, and whether it misled Holly about mortgage protection insurance.  

The bank rejected four restructure applications between 2019 and 2022. Each application showed Holly would have been left with a large monthly shortfall. The bank should have obtained updated financial information as part of assessing the 2019 application, but doing so would not have changed the outcome. The bank assessed each application under its lending policy at the time, and our terms of reference did not allow us to review the bank’s commercial judgment about lending. The hardship letters sent to her broker in 2021 clearly showed repayment relief applied only to the two home loans. There was no evidence the bank told Holly the line of credit was covered, and we found no error in how the bank handled the hardship request. We found examples of poor communication over several years. The bank did not always give clear information about its position, did not provide details about who was managing the account, and arranged an unnecessary lending appointment in 2021. This caused inconvenience to Holly.

We considered whether the bank misled Holly about the need for mortgage protection insurance in 2012. Records were limited because of the amount of time that had passed, but what evidence was available suggested she was already considering increasing her personal insurance cover. We could find nothing to suggest the bank misled her into believing that getting the policy was a requirement for obtaining a loan.

Outcome

We did not uphold Holly’s complaint about the restructure decisions, hardship assistance or mortgage protection insurance. However, we recommended the bank pay her $1,000 compensation for the inconvenience caused by the bank’s poor communication. Holly accepted the offer.