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Sione and his partner had two loans, secured by vehicles. One loan was used to consolidate debt, the other was used to purchase a vehicle. For both loans, the couple purchased an optional repayment waiver.

Although Sione and his partner were joint borrowers, the lender’s repayment waivers only covered one borrower, which in this instance was Sione’s partner. Under the waivers, the lender agreed to waive loan repayments in certain circumstances, for example, if Sione’s partner was unable to work due to illness.

In 2020, Sione was in a dispute with his employer. Sione said he contacted the lender to apply for hardship assistance and to claim under the repayment waivers. The lender had no record of this.

The lender contacted the couple when they defaulted on their loans. Sione had an upcoming mediation with his employer and hoped his financial situation would improve. The lender agreed to put loan repayments on hold pending the outcome of the mediation. The mediation was not successful for Sione and he left his employment.

The couple’s situation further deteriorated when one of their vehicles was written off. The lender used the insurance payment to repay the loan which was secured by that vehicle. The couple still had the other loan to repay and could not afford their repayments until Sione found a new job. They also could not afford to replace the written off vehicle.

Sione complained to the lender that the repayment waivers had not responded to his job loss. He met with the lender but was unable to reach a resolution with them. Sione then complained to FSCL.


Sione believed the repayment waivers should have responded to his job loss. He believed the waivers should have covered him (instead of his partner) because he earned more than her when the waivers were purchased. Sione also said the waivers were not suitable and that the lender had not properly explained them.

Sione also complained that the lender had refused hardship assistance, and that they were not entitled to the insurance payment.

The lender said it did not know about Sione’s financial difficulties until he defaulted. When the lender found out, it put loan repayments on hold. The lender wanted to discuss a repayment plan with Sione and his partner for the outstanding debt, but Sione did not agree to the lender’s request for bank statements. If an affordable repayment plan could be reached, the lender would reverse default interest it had charged on the loan.


The lender was correct that the repayment waivers only covered Sione’s partner. Even if the waivers had covered Sione, they would not have responded to his job loss. The waivers did not cover job resignations.

The lender had not misled Sione about the repayment waivers, and we had no reason to believe they were not suitable for Sione’s partner. Further, the lender was entitled under the loan agreement to keep part of the insurance payment to clear the loan which had been secured by the vehicle which was written off.

There was no evidence Sione had asked the lender for hardship assistance. The lender was not aware of Sione’s financial difficulties until the couple defaulted on their loans. The lender then offered help.


We concluded that Sione should discontinue his complaint and encouraged him to agree to a repayment arrangement. Sione did not agree with our decision but said he would repay the debt. He did not want to discuss a repayment plan with the lender.

Insights for consumers

When considering complaints about repayment waivers, we must have regard to the terms and conditions of the waiver. A lender does not have to waive loan repayments if the reason for the borrower’s loss of income falls outside the terms of the waiver. 

When a vehicle is written off, the insurer usually pays the insurance claim directly to the lender named on the motor vehicle insurance policy (if the vehicle was purchased on finance). Lenders are usually entitled to apply the insurance payment to the debt owed. The lender then pays the remainder of the payment (if any) to the insured (the borrower).