Credit card debt
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Mr F had a credit card debt of just over $16,000. He had been unwell and was struggling to make payments. He said that he had had a number of discussions with the bank about repaying the debt because he wanted to avoid going bankrupt but there was no formalised repayment agreement in place.
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Mr F complained to BFSO after the bank sold the debt to a debt collection company and the company had threatened legal action against him.
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Mr F’s complaint
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Mr F complained that the bank did not assist him in his difficult financial situation with his credit card debt. He claimed that the bank had known for two years that he was on work cover payments and taking medication for depression. He said that he felt that the bank did not assist him as it should have and did not always return his calls for assistance. He also said that his situation had changed in that he had employment that would enable him to make some extra money and he wanted to make an arrangement to pay off the debt.
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The bank’s response
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Following referral from BFSO, the bank reviewed Mr F’s complaint. On further investigation by the bank, it became clear that it had offered Mr F credit card limit increases that he did not have the capacity to repay. The bank then reviewed his file in accordance with BFSO’s guidelines on maladministration in lending.
To resolve the dispute, the bank repurchased the debt from the company and offered to reduce the credit card debt to $10,000 and put in place a repayment plan of $80 per month with no interest until the debt was cleared. Mr F accepted this outcome.
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