Message from the Advocate

This case study illustrates the Customer Advocate’s approach to credit listing disputes. A credit listing puts potential lenders on notice that a customer has failed to meet their contractual liabilities. A credit listing may also protect the interests of customers by reducing the likelihood of a borrower obtaining any additional debt that they cannot afford. These disputes are carefully investigated and removal of credit listings is only recommended in limited circumstances, such as where an error has occurred.

A credit repair organisation wrote to the Customer Advocate claiming that their client had been incorrectly credit listed by ANZ and requesting removal of the listing. The credit repair organisation stated that their client, Mr A, had provided a guarantee for his sister’s car loan as she desperately needed a vehicle to retain her employment. Mr A claimed that he was not advised of the effect of providing a guarantee. Mr A stated that his sister had been involved in a car accident and had written off her car, leaving a significant shortfall. He claimed that he was not contacted by ANZ or made aware of any insurance shortfall.

My office investigated this matter and noted that ANZ had financed a vehicle for Mr A’s company (and not in the name of his sister as indicated). Mr A, as company director, had provided a guarantee for the contract and the vehicle was insured in Mr A’s name. Mr A was bankrupt at the time of entering the contract and provided incorrect name, date of birth and address details to ANZ. My office conducted company searches and also obtained a report from Mr A’s Trustee in Bankruptcy. This report indicated that the customer had obtained finance with numerous organisations under 7 different spelling variations of his name and had also continued to act as a company director following his bankruptcy (in contravention of the Corporations Act) and this contravention was reported to ASIC.

I notified the credit repair organisation of the outcome of my investigation, advising that I was satisfied that Mr A had been correctly listed and I would not be recommending removal of the listing.

Mrs B held a joint ANZ Loan Account with her husband. The loan account had been repaid several years earlier and Mrs B claimed that the account should have been closed. The account was not closed and Mr B, who was suffering from mental illness, withdrew funds of approximately $35,000 from the account. Mrs B claimed that the money had been spent by her husband and she had not benefited. Due to his mental illness, Mr B had required hospital treatment and had been unable to work for many years. Mrs B was retirement age and was unable to repay the loan.

Information held showed that the loan had remained open in error. However, a review of the loan account statements indicated that both Mr and Mrs B had received the benefit of the funds drawn from the loan. After careful consideration of the customers’ financial position, it was decided that repaying the loan would place the customers in significant financial hardship. Although the Customer Advocate found that the customers were responsible for repayment of the principal funds without interest, she recommended that ANZ waive the total balance in light of the customers’ difficult circumstances.