Bank’s communications did not suggest it would delay debt collection until deadline

Categories:

Service problems, Lending,

Summary:

In April 2026, the bank closed Denny’s credit card account and referred his debt of $5,800 to a collection agency. Denny had been in financial difficulty for six months and had missed several minimum repayments. Denny complained that an earlier SMS from the bank had led him to believe he had more time to clear the arrears. He said he would have paid by the earlier deadline if he had known the bank planned to refer the debt earlier. Denny also complained that the bank suspended his internet banking access without warning or explanation.

Published:

October 2026

Our investigation

The SMS said the payment was due by 1 May, but the bank had also separately contacted Denny about the continuing arrears and the possibility of debt collection. The bank’s letters from February included one warning him it might begin debt collection. A later letter that month made a final request for payment and asked Denny to contact the bank urgently. The bank also tried to contact Denny by phone. We found the bank’s communications, taken together, did not suggest it would delay collection action until 1 May.

The bank accepted there was an opportunity to notify Denny before suspending internet banking access and acknowledged it will consider adding customer notice to the bank’s process in these circumstances and offered him $500 in recognition of the inconvenience it had caused him.