Bank was clear that separate lending assessment would follow conclusion of repayment plan

Categories:

Advice & information, Vulnerable customers and hardship decisions, Bank decisions, Lending,

Summary:

Rory and his friend, Declan had two home loans and a joint funding account that they used to make loan repayments. After running into financial difficulties in July 2024, their joint funding account became overdrawn. By November, the account was almost $7,000 overdrawn. Rory and Declan applied for hardship assistance, but the bank considered they needed longer-term support. In May 2025, they entered into, and then met, a 12-week repayment plan with the bank. At the end of the 12 weeks, they asked the bank to assess whether it could add the mortgage arrears (now exceeding $30,000) to their loans. The bank declined the application. Rory complained the bank had misled them about the 12-week repayment plan and had repeatedly failed to communicate properly.

Published:

May 2026

Our investigation

In examining how the bank handled their hardship application, we found the bank properly assessed it and provided clear information and explanations regarding relevant considerations and the outcome.

We reviewed the calls and correspondence about the 12-week repayment plan. Rory said the plan was misleading because it did not lead to approval of a loan increase to cover the overdraft. But the calls showed the bank repeatedly explained that a separate lending assessment would still be required at the end of the plan. It also said it would consider affordability, account conduct and equity, adding that approval was not guaranteed.

In looking at the bank’s communication with Rory and Declan, we noted failures including inconsistency in its contact with the pair, and confusion about which team was handling the matter. In addition, it referred Rory for a further home loan assessment that did not appear to be warranted. The bank had recognised these failings and had been refunding the monthly overdraft interest on the joint account from August 2025.