Bank wrong to have repossessed vehicle after agreeing to repayment arrangement

Categories:

Vulnerable customers and hardship decisions, Bank decisions, Lending,

Summary:

In July 2025, Amir’s vehicle was repossessed by the bank after he fell behind on loan repayments. Amir said he had already made a repayment arrangement through the bank’s mobile app. He said he used the vehicle for work and had to get another vehicle. He also said the bank took too long to acknowledge its mistake. The bank later accepted the arrangement existed, but said Amir could have taken back the vehicle when it offered to return it and waive repossession costs and interest. In the meantime, the bank had sold the vehicle, leaving a shortfall of $13,000 owing. Amir complained that the bank’s offer was inadequate, that he should not be liable for the shortfall, and be compensated for the financial loss and distress caused by the wrongful repossession, and the delay in acknowledging the bank’s error.

Published:

July 2026

Our investigation

Since the bank did not dispute it had incorrectly repossessed Amir’s vehicle, our task was to consider the impact of the wrongful repossession and how to put Amir back in the position he had been in before the bank acted as it did. We did not think the bank’s proposed solution after realising its error about the repayment arrangement was reasonable. It agreed to not hold Amir liable for the $13,000 shortfall and also offered him $500 for the stress and inconvenience caused by its error and by its handling of his complaint.