Philip complained that the bank delayed its refinancing offer until a month before the first loan expired, which he said was oppressive and unreasonable. He said the delay was deliberate and left insufficient time to refinance elsewhere. He also said the loan acceptance fee was excessive and sought a refund of half the amount.  

Our investigation

The Credit Contracts and Consumer Finance Act 2003 defines “oppressive” as conduct that is harsh, unjustly burdensome, unconscionable or in breach of reasonable standards of practice – a high threshold. In addition, the Code of Banking practice requires a bank to treat a customer reasonably and communicate clearly and effectively.

The company’s first loan was for a fixed 12-month term, and the bank was under no obligation to renew it or offer another loan on similar terms. The bank was entitled to use its commercial judgment in setting the terms of any new offer. It was Philip’s choice whether to accept or reject the offer. The new offer included higher fees and interest rates, but this did not amount to oppressive or unreasonable conduct.

The bank’s indicative offer in October was followed by a revised offer in November, which Philip accepted. The bank acted reasonably and communicated clearly, thereby meeting its obligations in this respect under the code. Although Philip wanted an earlier offer to allow time to refinance elsewhere, we found no breach of duty or obligation by the bank. He could have approached other lenders at any time before or during his discussions with the bank.

Outcome

We did not uphold Philip’s complaint.