FSCL helps the parties reach a fair outcome

In July 2021, Kevin’s financial adviser instructed his lender to fix his home loan interest rate at 3.34% for two years. Almost a year later in June 2022, Kevin noticed his repayments increased significantly. He contacted the lender to find out what happened, and discovered the interest rate had not been fixed.

Kevin complained to the lender that they failed to follow his financial adviser’s instructions. The lender noted the rate had increased on other occasions since July 2021, and asked why Kevin had not raised his concerns sooner. He explained this was because the letters about the increase had been sent to an old address. Kevin tried to keep up with the increased payments, but soon fell behind.

The lender offered to reduce Kevin’s interest rate to 4.09%, backdated to February 2022. Kevin wasn’t satisfied with this offer. It left him worse off that if the rate had been fixed in July 2021, so he complained to FSCL.


We contacted the lender to ask for the information we needed to investigate the complaint. In response, the lender said they would like to make a new settlement offer.

The lender’s new offer was to fix the interest rate at 3.34% for two years from the date of the original instruction, and to refund $16,295.80 to Kevin’s loan account. Fixing the interest rate at the level Kevin had requested was a good step. But both Kevin and FSCL still had concerns about the fairness of this offer.

Kevin asked what would happen with the extra money he had paid the lender trying to keep up with the higher interest rate. Although he had fallen behind, he had paid some amounts over and above what would have been needed if the rate was fixed at 3.34%. He thought this should be refunded to his bank account rather than applied to the loan.

We agreed with Kevin that the extra amounts he had paid should be refunded to his bank account. We also noted there were some default and payment reversal fees that had been charged due to the rate not being fixed. We said the lender should reverse these fees.


After considering Kevin and FSCL’s comments, the lender increased the total settlement offer to $19,884.01. This would be split in the following way:

  • $15,440.97 to repay loan arrears, including the default and payment reversal fees
  • $4,443.04 to be paid to Kevin’s bank account for extra payments he had made trying to keep up with the higher interest rate.

Kevin accepted the lender’s updated offer in resolution of his complaint.

Insights for consumers

Even when a financial service provider agrees to settle a complaint, FSCL can still help if you don’t think the offer is fair. If we think the offer is already fair, we will explain the reasons why. But in cases like this one, we can help to ensure the outcome puts you back in the right position.