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A small problem leads to a big complaint

Claire and Robert are the trustees of a commercial trust. In her capacity as a trustee, Claire borrowed money from a finance company to buy a car. Claire had almost repaid the loan when, as the result of a bank glitch, one loan payment was dishonoured.

Within a few days of the payment not going through, Claire and Robert realised and made a manual deposit. Unbeknown to them, they omitted the reference number from the manual deposit. As a result, the finance company could not locate the payment, and its automated system issued a pre-possession notice for the car. When Robert called the finance company he was told it could not discuss the loan with him because he was not the borrower.

The next payment was made on time, but because the finance company was unable to locate the manual payment, the account was still in arrears. The finance company issued another pre-possession notice.

At this point, Claire emailed the finance company and explained that they had made a manual payment. The finance company replied that it was unable to locate the payment and asked for confirmation from Claire’s bank. Claire sent through her bank statement, but there was insufficient information to locate the payment. The finance company asked for more precise information. At this point Robert decided to repay the loan in full because the matter was causing Claire considerable stress.

Robert said the finance company was being unreasonable and complained to FSCL. We referred the complaint to the finance company’s internal complaints process. A senior manager became involved and the missing payment was located. The finance company confirmed that the loan had been repaid in full and the security released, but did not apologise for the events giving rise to the complaint.

Robert did not accept that the complaint was resolved and referred the complaint back to us. 



Robert considered the finance company had completely over-reacted. They had missed one payment as the result of a bank error. Instead of calling and asking what had happened, the finance company had immediately issued a pre-possession notice. Robert explained that Claire had been very sick for most of the year and was in hospital when the first pre-possession notice arrived, which was why he had made contact. As a joint trustee of the borrower, Robert felt the finance company should have been prepared to speak to him. Robert said the whole event had been extremely stressful and caused by the finance company.

The finance company said the manual payment came through with only partial information, –  the loan reference number was missing – and it could not immediately identify which account the money belonged to. However, the finance company reviewed the complaint again and agreed it could do better.

The finance company provided a full explanation, apologised, and offered Claire and Robert $500 as an acknowledgement of the stress they had experienced. Robert did not accept the offer, saying it was insufficient to recognise the stress the finance company had caused Claire in particular. Robert again asked for our view.



Our role is to return Claire and Robert, as much as possible, to the situation they were in before the event complained about occurred. In this case, Claire and Robert had not suffered a direct loss, but we agreed compensation for stress and inconvenience was appropriate. Compensation is not designed as a punishment, instead the focus is on the consequences for the people involved. We must look objectively at what has happened and give our view as to what would be a reasonable amount of compensation.

We asked the finance company whether it would be prepared to increase the compensation offered. The finance company agreed to increase the amount to $750. In our view, this was a reasonable settlement offer.

The finance company was not responsible for the missed payment, however, it could have communicated better. The way the finance company responded caused Claire and Robert considerable stress, especially considering Claire’s ill health.



We encouraged Robert to accept the settlement offer. He reluctantly agreed and the matter was resolved.


Insights for participants

Communication is key to your relationship with your clients. If the finance company had:

  • called Claire as soon as the payment was dishonoured
  • written a polite covering letter with the pre-possession notice
  • explained that the information provided about the transaction indicated the reference number was likely missing, and
  • apologised after locating the payment

the complaint would probably have been avoided without the need to escalate to FSCL.