Bank made reasonable efforts to contact customer before repossessing car

Categories:

Bank decisions, Lending,

Summary:

Bruce complained that in October and November 2025, when his business loan was in arrears, the bank repossessed the car secured against the loan without giving him a real opportunity to prevent repossession. He said he did not understand from the bank’s communication that repossession was imminent. He was also unaware the bank was sending formal notices to an old postal address. He said a car salesperson told him he could use a tax refund to reduce the loan and he believed the refund would automatically lower the balance. He said this misunderstanding contributed to the arrears.

Published:

April 2026

Our investigation

We looked at the loan agreement and found it showed the increased scheduled payment in the third month of the loan term.

We reviewed the bank’s contact with Bruce between May and October 2025. The bank sent repeated letters, texts and emails about the arrears, and also made several phone calls to him about the same matter. It sent two statutory enforcement notices to the postal address recorded for his company, as required by law. It was Bruce’s responsibility to keep his details up to date.

Bruce paid part of the arrears in August and said he would pay the balance by 20 September, but did not. The bank emailed him on 23 September, then again on 30 September, asking when the arrears would be paid and advising that it would issue a repossession warning notice if the account remained overdue. Bruce did not reply or make a payment.

The statutory notice issued on 24 September gave a deadline of 14 October to pay the arrears. The bank issued a repossession warrant on 20 October after the deadline passed.

Bruce told us the repossession agent mentioned using a locksmith to access the garage, which caused him stress. We understood why this reference was upsetting. However, it was reasonable for the agent to talk about options for accessing the car and the agent did wait for someone to return home so there was no forced entry.

We found the bank followed the correct process and made reasonable efforts to contact Bruce before taking enforcement action.