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Lender fails to check affordability of loans...
The Insurance and Financial Services Ombudsman has upheld a complaint from a borrower that the lender had not been responsible when advancing further credit.
The borrower obtained a credit card with a $3,000 limit. Over the years he increased the limit to $17,300.
The lender did not undertake sufficient checks on the borrower’s financial state because he had been made unemployed and could not afford to pay back the credit obtained.
The outstanding balance on the credit card was wiped and the card was cancelled as a lender cannot recover a debt if they have not made reasonable checks on a borrower’s ability to pay without undue hardship.
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