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Fraudulent finance company employee


The story

Jessie regularly borrowed money from a finance company and had built up a good relationship with one of the lending officers, Louise.  Jessie arranged a new $500 loan with Louise.


Some months later, at around the time the $500 loan was due to be repaid, Louise came to Jessie’s home in tears.  Louise confessed that she had signed a fraudulent loan application for a further $500 in Jessie’s name and taken the money.  Louise begged Jessie not to tell the finance company, and agreed to make the payments into Jessie’s bank account if Jessie continued to repay the loan.  Jessie felt sorry for Louise and agreed.  Louise made a couple of payments, but stopped paying and it was clear to Jessie that Louise was not going to repay the loan.


Jessie complained to the finance company about Louise’s actions but the finance company did not believe her. Jessie referred the complaint to FSCL and fully repaid Louise’s loan because she was worried about incurring a default with the finance company.



Jessie considered the finance company ought to be responsible for the actions of its employee, Louise.  The finance company said it had reviewed all the information it had about the lending, and could not find any evidence of the fraud.  Louise had left the finance company’s employment and so was unable to provide any further explanation.


FSCL’s review

From the information provided by the finance company, we were unable to identify how the fraud was committed.  As Jessie had made a complaint with the police we suggested she refer the complaint back to us at the conclusion of the police investigation.


The police successfully prosecuted Louise for fraud.  Louise admitted the fraud and agreed to repay the money to Jessie.  However Jessie considered the finance company should be responsible for the actions of its employee, Louise, which had caused her considerable stress, and additional costs of $52.10 that were not included in the amount awarded by the court.



We suggested, and the finance company agreed to cover the additional costs, and paid Jessie $250 for the stress she had experienced as a result of Louise’s actions.  Jessie accepted the settlement offered and the complaint was resolved.

Had Louise not repaid all of the loan money to Jessie, the finance company would have had to compensate Jessie for the full amount of the loan that had been fraudulently obtained.