Unilateral cancellation of an account leads to significant financial pressure

Katrina had a day to day account with her provider. During a telephone call, it was alleged Katrina became abusive towards the provider’s staff member and the call ended. There was no recording of the telephone call.

The provider then cancelled Katrina’s account and sent her a cheque for her funds, in the post.

This caused Katrina significant stress because all of her regular payments for rent and amenities could not be made. Katrina was soon under a lot of financial pressure because she was behind in all her payments, exacerbated by the fact she had also been unable to work her normal hours while she was sorting out re-arranging her payments.

Although Katrina accepted her communication with the provider was less than ideal during the telephone conversation, and that the provider was within its rights to cancel her account, she complained to FSCL because she considered the provider’s decision to cancel her account without her knowledge, and before she could withdraw her funds, was unfair.


Our review

It was clear to us early on that holding a conciliation conference would be a good way to try and bring the complaint to a fast resolution. Time was of the essence because Katrina’s financial situation was getting worse. We arranged a telephone conciliation for a week later.


The conciliation conference

Katrina and the provider’s complaints manager were able to engage in a good discussion at the conciliation and Katrina’s complaint was resolved.

The agreement reached was that the provider would write letters to Katrina’s creditors to explain what had happened with her account closure. In addition, the provider agreed to pay Katrina $950 representing an amount for inconvenience, some lost income, and some overdue charges with some creditors. Lastly the provider provided Katrina with a letter of apology for the communication she experienced with its staff.

Key insight

This complaint was resolved within 20 working days. Conciliation can be an effective way to resolve complaints where time is of the essence, particularly when the conciliation is held by telephone.