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But it’s been years!

In 2017, Maia borrowed $30,000 from a lender to buy a new car. Around a year after buying the car, Maia became ill and was no longer able to work. Maia surrendered the car to the lender in early 2020 because she could no longer afford her loan payments. The lender sold Maia’s car at auction and reduced Maia’s loan balance by the sale price.

The lender rang Maia shortly after the car had been sold. Maia remembered the lender telling her that her loan was closed now that the car had been sold, and she did not have to make any further payments. Maia told us that she had not heard from the lender since that phone call.

In early 2023, Maia received a call from the lender. The lender told Maia that there was still over $10,000 remaining on her loan balance. The lender followed up with an email to Maia, which said that they had been sending letters to Maia’s previous address to notify her that the loan was still outstanding.

Maia said that she had not received the lender’s letters, and that the lender had not tried to contact her since 2020, when she had surrendered the car.

Maia complained to FSCL in November 2023.


Maia said that she should not have to pay the amount remaining on her loan balance, because the lender told her that she did not owe anything further when she surrendered her car and had not contacted Maia about the debt in over three years.

The lender said that they were within their rights to pursue Maia for the debt, because six years had not yet elapsed since the car was surrendered. The lender said that they had never abandoned their right to pursue Maia’s debt.


We looked at Maia’s loan contract and copies of the lender’s letters to Maia.

We explained to Maia that the lender was entitled to pursue her debt, because it had only been three years since she surrendered the car. We told Maia she was responsible for keeping her contact details up to date on her account with the lender, so that the lender  knew how to contact her.

We also thought that it was highly unlikely that the lender told Maia that her debt would be cleared once the car was sold, and there was nothing to support that this was the case.

Though the lender could have made more effort to contact Maia, they had not breached their legal obligations to her.


The lender made a goodwill offer to settle Maia’s complaint. The lender agreed to reduce Maia’s loan balance by $5,000 and allow Maia to repay the debt at a reduced rate.

We encouraged Maia to accept the lender’s settlement offer. We thought that it was a fair and reasonable offer in the circumstances. Maia accepted the lender’s offer, and her complaint was resolved.

Insights for consumers

If you have taken out a loan to buy a car, your debt will not be cleared if you surrender the car to the lender and they sell it auction. Although the lender will stop charging interest and fees, you will still have to pay any loan debt still owing after the car is sold.