Our investigation

We found the bank made errors in the construction loan agreement, including listing all four parties as borrowers, instead of listing two as guarantors, and incorrectly stating the loan would be drawn in one lump sum. These errors caused a delay of about a week in settling the loan. We also found the bank did not act on Joey’s later request to change the repayment account in a timely way, although it corrected the resulting overdraft.

Joey and Teresa’s mortgage adviser told them the sustainable energy loan would be drawn down as required. The bank told the mortgage adviser the loan had to be drawn down in one lump sum, and offered to extend the final drawing down date. The adviser did not follow up with the bank or seek further instructions. We found the bank acted in line with the signed agreement when it drew down the loan in full.

The bank delayed responding to information requests from our office, and did not provide all relevant documents early in the complaint process. We found the bank did not handle the complaint in a timely way.

Outcome

The bank and Joey and Teresa agreed with our recommendation, and the bank paid them $700 compensation.