The Banking Ombudsman has found a bank to be in breach of the Code of Banking Practice after it failed to provide sufficient information to a customer when giving that customer a mortgage holiday. 

The customer was having difficulties agreeing on what to do with a property that was mortgaged to the bank because of a dispute with a co-owner.  The customer asked the bank for a mortgage holiday while the dispute was resolved.  The bank agreed to the mortgage holiday, but when the customer went to organise a new loan for the property she found that the bank had put a hardship flag on her file which meant that no bank would give her a loan without significant assessment of the application. 

The customer complained to the Banking Ombudsman that the bank had failed to advise her that it would put a hardship flag on her file. The Ombudsman concluded that the bank had failed to communicate clearly and effectively with its customer, by failing to tell her that one of the consequences of accepting the loan holiday would be a hardship flag. 

The bank paid the customer $2,000 compensation for stress and inconvenience and this was accepted by the customer.

If you are having difficulties with your bank it pays to get advice from a professional experienced in this area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.