Bank Company Defaults
1.OVERDRAWN SAVINGS ACCOUNT DEFAULTED
Mrs. L was defaulted by her employee credit union who had allowed her savings account to become overdrawn.
Since the default, Mrs. L had been unable to obtain any credit since that time and despite the account being paid in full several years earlier, her repeated requests to have the default removed was denied.
Mrs. L was referred to Latham Moore who identified a serious breach of the Privacy Act 1988 and Consumer Credit Code 1995.
The bank removed the default and paid Mrs. L compensation.
2.TEENAGER DEFAULTED ON BUSINESS CHEQUE ACCOUNT
Ms. A was 17 and ran a small business in a partnership with her older brother. The business opened a cheque account with her brother’s bank but soon fell into difficulties. Ms A left the business and gave her share in the business to her elder brother who continued on alone. Several months after leaving the business, Ms. A’s brother overdrew the business’s cheque account when a cheque was presented on the account. Despite the account being overdrawn the bank honoured the cheque and then after waiting a few months for the account to be brought back into line the Bank defaulted Ms. A and her brother for leaving the account overdrawn by $220.00.
When Ms. A turned 18 she applied for her first loan to buy a car but was rejected due to the default listing published by the bank several months earlier.
Several years went by but still Ms A could not obtain credit to even buy a mobile phone. Meanwhile her friends were driving around in nice cars and spending money on their credit cards while Ms. A was forced to rely on her friends and family to drive her around and pay cash.
Ms. A contacted Latham Moore after being referred by one of her friends. After an initial assessment, Latham Moore identified 3 major breaches of the Privacy Act 1988 which led to the bank removing the offending default within 7 days of Latham Moore identifying the breach.
3.BANK DEFAULTS CUSTOMER ON LATE MORTGAGE PAYMENT
Mr. and Mrs. D had lived in the same house for 20 years and had had a mortgage with their bank for ten years. For the last few years they had struggled to make ends meet and had regularly defaulted on their monthly repayments due to the wife losing her job.
With the increase in property prices the equity in the family home had doubled. After visiting their local mortgage broker they decided to refinance their home borrowing extra to payout their car loans and credit card debts leaving one easy monthly payment. The mortgage broker had calculated the repayments based on a low interest rate with a conforming lender. However, when the broker submitted the application to the lender he was surprised to learn that Mr. and Mrs. D both had multiple defaults published on their credit files. These included two defaults by their current mortgage provider and a default from a vacuum cleaner company.
The mortgage broker suggested the D’s try a non conforming lender which they did but the interest rate was so high that they would have been in the same situation as they were already in. Unable to come to grips with the situation the D’s declined to take any further action and went back to their old lives struggling to pay their debts.
Several months passed when the broker became a credited representative of Latham Moore who remembered the D’s application and circumstances. After being referred to Latham Moore we were able to identify several breaches of the Privacy Act 1988 on each of the defaults listed on the D’s credit report.
These included the banks failure to serve proper default notices that complied with both the Consumer Credit Code 1995 and Privacy Act 1988. Two months after starting the work all of the defaults were removed leaving the D’s to refinance as they had originally planned.
4.BANK FAILS TO UPDATE DEFAULT INFORMATION WITHIN STATUTORY PERIOD
Mr. F became in default of his personal loan after losing his job. As soon as he was able, Mr. F brought the account up-to-date and with the help of his parents paid the account out in full.
18 months later Mr. F secured a new job as a sales rep and as part of his remuneration received a car allowance of $150.00 per week. However the excitement of securing a new job was soon dampened when he went to his local Holden dealer and was rejected for motor vehicle finance due to a default published on his Baycorp credit report
When the dealerships finance officer contacted Mr. F for an explanation Mr. F was naturally embarrassed as well as frustrated.
However he assured the dealerships finance officer that the default was in fact paid in full sometime previously. Despite this advice the finance officer was unable to persuade his finance company to approve the loan so he tried a second financier. The result was the same but this time the second financier explained that the default was not listed as paid but was in fact recorded with Baycorp’s database as unpaid.
After receiving the news Mr. F paid for a copy of his Baycorp file and discovered he had not only been defaulted by the finance company for the full amount of the loan contract some $8,000 but the account was still listed as unpaid.
While the finance company that published the default against Mr. F quickly marked the default as paid once notified of the error, the publication still incorrectly reported the default as being $8,000 which represented the entire loan amount.
The size of the default precluded any finance company from even considering Mr. F as a customer.
Mr. F was referred to Latham Moore who investigated the matter and identified two breaches of the Privacy Act 1988 and one breach of the Consumer Credit Code 1995. After being contacted, the finance company removed the default after Mr. F agreed to sign confidential terms of settlement.
5.CUSTOMER MAKES ARRANGEMENTS TO DEFER PAYMENT BUT STILL GETS DEFAULTED
Mr. B was a young man who had got into difficulties when he over budgeted by buying an expensive new car. As a result he could not meet all of his monthly commitments.
After seeking assistance from a financial counselor Mr. B followed their advice and asked all of his creditors to either reduce or defer his monthly payments. This proposal was accepted by all of his creditors and after about six months he had sold his car and paid out his main monthly commitments.
18 months later Mr. B received a pay rise and decided to replace his old car with a newer version. However, he was soon to discover that despite his best efforts to act responsibly and preserve his credit rating by deferring his payments 18 months previously, two of his creditors had published defaults against his Baycorp credit report.
The car dealer referred Mr. B to Latham Moore who quickly identified a serious breach of the Consumer Credit Code 1995 and Privacy Act 1988 on both of the defaults published.
Both Credit providers removed their respective listings and entered into confidential terms of settlement but not before paying Mr. B compensation for his stress.