Case Notes
Search results
Debt listing - wrong account credited with funds - failure by customer to update contact details - bank’s obligation to detail complaints process - bank branch refusal to discuss accounts with customer
Mr and Mrs Z opened a credit card account with their bank and made a deposit of $1,000 to the account in anticipation of a trip to Australia.
Unknown to Mr and Mrs Z the bank officer made a mistake when they lodged the $1,000 and credited it to their transaction account instead of to the credit card account. While Mr and Mrs Z were in Australia, transactions totalling $839.57 were debited to their credit card account.
Mr and Mrs Z decided to stay in Australia and withdrew all their funds from the bank, leaving an overdrawn balance on their transaction account of just under their overdraft limit of $500. Mr and Mrs Z did not advise the bank of their new contact address and all statements sent to their last known address were returned to the bank. After several months and a number of unsuccessful attempts to trace Mr and Mrs Z, the bank closed both accounts and the debts were sent for collection. The debt relating to the overdraft on their transaction account was listed.
Some months later, Mr and Mrs Z discovered the debt listing against their names and immediately tried to contact their bank branch, without success. Telephone calls to the bank’s call centre were transferred to branch staff who refused to talk with them because the accounts were closed. They were referred to the collection agent. They wrote to the branch manager disputing the credit card debt, but received no reply. It was only after they contacted my office that Mr and Mrs Z found out that the listing against their names did not relate to the credit card debt which they were disputing, but to the overdraft on their other account with the bank.
Once it became clear that the credit card debt was incurred because of an error when the deposit of $1,000 was paid into the wrong account, the bank agreed to reverse all the interest and collection costs charged to the credit card account and to pay Mr and Mrs Z $300 to acknowledge the inconvenience caused by the mistake.
So far as the other debt was concerned, I found that the bank’s decision to refer the debt for collection and have the debt listed was not unreasonable, given Mr and Mrs Z’s failure to give the bank up to date contact details. I was not in a position to recommend that the debt be recalled from the collection agency or that the listing against their names should be removed.
However, I was most concerned about the lack of assistance provided at branch level when Mr and Mrs Z attempted to make contact to get information about the debt. They received neither assistance nor the information they sought, and at no point were they directed to the bank’s internal complaints process or told about their right to complain to my office. The bank’s repeated failure to give Mr and Mrs Z information on how to make a complaint was a breach of the Code of Banking Practice. The bank’s failure to reply to Mr and Mrs Z’s requests for information it held about them was a breach of its obligations under the Privacy Act.
Taking into account the frustration and inconvenience experienced by Mr and Mrs Z while trying to access information about the debt listed against them, I concluded that an award of compensation of $1,500 for inconvenience was justifiable. This was accepted, both by the bank and by Mr and Mrs Z, and the complaint was settled on this basis.