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Miscommunication causes complaint

When Kelly fell into arrears on her credit card account, she received two letters from the credit card provider (the provider) asking her to deposit money into her account. Kelly explained that around this time she experienced a personal trauma and simply forgot to clear the arrears.

About six weeks later Kelly received two more letters from her provider about the arrears, warning that the account would be closed. Both letters had been incorrectly addressed, meaning Kelly did not receive the letters until after her account had been closed. The personal trauma had also affected Kelly financially so by now she could not afford to clear the arrears and accepted the provider’s action of closing her account was reasonable.

Kelly then received another letter from the provider, correctly addressed on this occasion, advising that the debt had been referred to an external collection agency. Kelly considered the provider’s referral to an external collection agency unreasonable. Not only would it increase Kelly’s debt, but it would ruin her credit rating. Kelly said that if the provider intended referring the debt to an external collection agency, they should have told her.

When Kelly complained to the provider, they responded that it would be illegal for them to alter what was otherwise a correct debt listing. However, the provider would withdraw the debt from the collection agency and enter into a repayment agreement with Kelly. The provider asked Kelly to sign a settlement agreement acknowledging that she would not make any future claims about the provider. Kelly did not accept the provider’s response and complained to FSCL.


While Kelly was pleased that the debt had been withdrawn from the collection agency, she was very upset at the provider’s allegation that she had asked them to effectively commit a fraud by changing a correct record. Kelly said that she did not dispute that she owed the debt and she understood the importance of accurate record keeping. However, Kelly complained that the provider had not understood:

  • part of the problem was caused by mail being incorrectly addressed, and suggested the provider consider communicating by email
  • none of the letters from the provider told Kelly that the debt was about to be referred to an external collection agency, if Kelly had known this, she would have contacted the provider immediately
  • Kelly had understood that when the provider closed her account, they would be in touch to enter into a repayment agreement and she was very upset by the escalation to an external collection agency
  • how upset Kelly was at the suggestion she would ask the provider to effectively commit fraud.

Kelly said she was not prepared to sign the provider’s settlement agreement until these matters were resolved. Kelly was also particularly upset that the settlement agreement included a clause preventing her from complaining about the provider again.


We went back to the provider explaining why Kelly was not prepared to sign the settlement agreement.

The provider responded that they would not be changing their postal system to include communication by email but had taken on board Kelly’s suggestions about the content of the letters. The provider apologised for any upset caused by the suggestion that Kelly wanted them to alter her credit record and acknowledged that this was not Kelly’s intention.


Kelly accepted the provider’s response, and the complaint was resolved on this basis.

Insights for participants

Miscommunication sits at the heart of many of the complaints that come before us. This complaint illustrates miscommunication on many fronts:

  • the postal mail was incorrectly addressed
  • the method of communication might have suited the provider, but it did not suit their customer
  • the letters did not include information about debt recovery that it was important for the client to know
  • the care that must be taken when interpreting a client’s intentions.