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Debt – summary instalment order – bank failed to acknowledge – card stopped – automatic payment not reinstated
Mrs N was in financial difficulty, and approached a budget advisor for help. She was advised to apply to the court for a summary instalment order. This scheme allows both debtors and creditors to request District Courts to issue orders requiring debtors to pay off their debts. At the discretion of the court, such debts may be paid of in full or in instalments. If debtors apply for such orders in relation to themselves, this can help them to pay off their debts at a rate which they can sustain. The court granted Mrs N a summary instalment order including two debts which she owed to her bank.
Mrs N sent the necessary documentation to the bank’s head office, and then, on its recommendation, forwarded it to her branch. When she faxed her documentation to the branch and did not receive a reply, she telephoned the branch, and was told by a staff member that she had sent the wrong documentation. She could not understand this, as the documentation had been provided by the court and had also been accepted by other creditors. She made an appointment to meet the staff member in question, but when she arrived at the branch office she was told that he was too busy to meet her. The branch manager was also unavailable. Later the staff member telephoned Mrs N and repeated that she had provided the wrong documentation, but said he had spoken to someone from the court, which would send the correct documentation. When the staff member was unable to explain to Mrs N’s satisfaction why her documentation was unacceptable to the bank, she telephoned the court, which advised her that the bank had not accepted the documents because they had been faxed, and had not been submitted as originals.
When Mrs N then supplied the branch with the original documents she heard nothing further from her bank. One week later she discovered that her ATM card had been blocked. The bank also neglected to reinstate an automatic payment for Mrs N’s rent, as a consequence of which her rent was not paid. In breach of the summary instalment order requiring the bank to stop deducting loan repayments from her account, it continued to make these deductions. The bank also closed her account, without prior notice. These incidents caused Mrs N considerable frustration and distress, not to speak of financial inconvenience.
Mrs N immediately returned to her budget advisor, who contacted the bank on her behalf. The bank eventually agreed, after a discussion with the budget advisor, to reopen Mrs N’s account for a further two weeks, to allow her to make alternative banking arrangements.
When Mrs N initially approached my office without, as is required, first taking her complaint through the bank’s internal complaints procedure, I referred it to the bank for consideration. The bank investigated Mrs N’s complaint and apologised to her. As part of the routine follow-up process, my office later wrote to Mrs N to find out whether she was satisfied with the bank’s resolution of her complaint. When it was discovered that she wanted to take the matter further I began my investigation.
The bank then reconsidered its position and offered Mrs N a further apology, in addition to $2,000, written off against her debt to it, in compensation for the inconvenience she had suffered as a result of its actions. When Mrs N accepted the settlement offer, I discontinued my investigation of her complaint.