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Nothing comes free, or does it?

Kerry, a life parolee, decided to open an account with a credit union that offered a “no fee” account for the time a person spends in prison. Kerry also opened a term deposit for his savings.

Three years later, the credit union altered its policy and started charging Kerry’s current account with fees. Kerry queried the fees. The fees charged took the account into overdraft, requiring Kerry to put more money into the account to cover the deficit. Kerry also discovered the credit union had opened a separate account in his name.



Kerry felt upset that the credit union began charging his account with fees without his consent and opened an account without asking him. He felt this was a breach of his original contract with the credit union. Kerry wrote to the credit union expressing his unhappiness with their service and asking for his account to be closed. Kerry’s current account was subsequently closed.

Kerry felt frustrated with the standard of communication from the credit union especially because he had limited ways of contacting them. This caused him significant and ongoing stress. He wanted to terminate his relationship with the credit union and close all his accounts.

Kerry then complained to FSCL.



We contacted the credit union who provided a new fee disclosure statement for Kerry. The credit union explained that it was required to open a separate account into which to pay the interest arising from Kerry’s term deposit. Due to the communication concerns, the credit union offered to refund all of the fees Kerry had been charged on his current account. After negotiation, the credit union also agreed to close Kerry’s term deposit early without any fee and transfer the balance of his accounts to his prison account.



Kerry accepted the credit union’s settlement offer. Kerry’s term deposit, fee refund and account balances were transferred to his prison account and all of his credit union accounts were closed.


Insights for the participant and the consumer

It is important for participants to communicate changes to their policies with their clients and retain records of these communications, especially in such situations where a client has limited options to make contact.