Case Notes
Search results
Credit card debt – payment arrangement – payments missed – default listing with credit reference agency – no grounds to remove listing
Mr B and his wife had three credit cards with overdue amounts owing on each. While working in Australia, Mr B was made redundant and fell behind in his repayments. Both he and his wife notified the bank on several occasions that they were unable to meet their repayments. The bank agreed to freeze interest on the cards in return for a payment arrangement.
While Mr and Mrs B made several payments under the arrangement, their difficult financial circumstances led to several payments being missed. The bank wrote to Mr B, asking him to contact it immediately to discuss repayment of the debt. The bank advised Mr B that, if it received no response from him, his name could be listed with a credit reference agency, thus “affecting [his] ability to obtain credit …”. The bank wrote to Mr B on several more occasions, alerting him to the possibility of a credit listing and/or possible legal action to recover the debt.
Several months later, Mr and Mrs B wanted to arrange a mortgage to purchase a block of land. The loan application was declined after a credit check revealed that Mr B’s name was listed with a credit reference agency. Mr B complained to the bank that he had not been informed of the listing, indicating that he wanted the listing removed so the land purchase could proceed. He advised the bank that he and his wife’s financial position had improved, and that they would be able to repay the credit card debt once the mortgage had been approved.
The bank declined to remove the credit listing, and provided Mr B with written evidence of occasions when it had warned him that this might occur. Mr B was not satisfied with the bank’s response, and the complaint was referred to my office.
After investigation, I found that the bank had formally advised Mr B on several occasions that he might be listed with a credit agency if his debts remained unpaid. Mr B had had signed a credit card application form forming the basis of the contract between him and the bank. This form contained terms allowing the bank to list him as a debtor in certain defined circumstances. Although Mr B did his best to keep the bank informed of his financial situation and of his intention to pay off the debt, the bank was entitled to act under its contract to enforce the collection of the debt.
I recommended that the complaint be withdrawn. When Mr B failed to respond, no further action was taken.