A returned vehicle
Mrs Smith complained that her husband had received a notice to attend an examination hearing at Court in relation to a debt to a finance company. Mrs Smith said that the debt was in relation to a car Mr Smith purchased in July 2006, but the car was returned to the car yard the same day when he discovered something was wrong with it. Mr Smith said that a man at the car yard told him the loan was cancelled. Mr Smith did not believe that he needed to pay the amount stated in the notice he had received from the Court.
FSCL referred the complaint to the finance company’s internal complaints process. Unfortunately the complaint did not resolve and we opened an investigation and asked for some further information about the complaint.
Receipt of information from the finance company
Upon receiving information from the finance company it appeared Mr Smith had returned the original vehicle to the car yard (a Nissan vehicle), but then decided to purchase a Toyota vehicle and a loan was drawn down from the finance company to complete this purchase.
It appeared that Mr Smith then entered into an agreement in 2007 another couple, Mr and Mrs Jones, whereby Mr and Mrs Jones would take possession of the Toyota vehicle and pay the loan, and when the loan was paid, Mr Smith would transfer ownership of the vehicle to Mr and Mrs Jones.
The finance company had amended the loan contract to include Mr and Mrs Jones as co-borrowers, along with Mr Smith.
Payment of the loan
Payments were not regular and in 2009 the finance company applied for a court order against Mr Smith to say that he had to pay the balance of the debt, which by that time sat at around $14,000 (“judgment”).
Mr Smith and Mr and Mrs Jones made irregular payments following judgment. This was the reason the finance company was now seeking an order from the Court that Mr Smith needed to pay a certain amount per week towards the balance of the debt from his income (“attachment order”).
FSCL assists in resolving the complaint
We explained to Mr and Mrs Smith that we could not overturn the 2009 Court judgment. Mr and Mrs Smith said they thought the judgment was issued in error. We said we could not assist further with this and referred Mr and Mrs Smith to their local community law centre. We said that the time for Mr and Mrs Smith to highlight that they thought the judgment was issued in error was probably at the time the application was going through Court in 2009.
We said that we thought the debt needed to be paid by Mr Smith. Mr and Mrs Smith agreed to withdraw their complaint.
The finance company questioned whether we should have opened an investigation of the complaint because it related to events which took place in 2006/2007. We said that the complaint was within our jurisdiction to investigate because it was about enforcement of the debt, which was occurring now.
Lesson to be learned
FSCL does not have the power to overturn any order issued by a Court. Often our investigations will begin from the date of the most recent Court order.
FSCL is required to open an investigation of a complaint received from a complainant which has not resolved through the participant’s internal complaints process, if the complaint is about a financial service and relates to events which occurred after 1 April 2010. We cannot decline to investigate a complaint simply because a complaint may appear to lack merit.
As it transpired, upon opening an investigation of the complaint and seeking further information from the finance company we were able to assist Mr and Mrs Smith to understand that the debt needed to be paid by them. This resulted in an early resolution of the complaint.