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We had an agreement!

In May 2023, Nikau applied for a $30,000 loan with the lender. Nikau already had a loan open with the lender. The outstanding balance on Nikau’s open loan was $15,000.

The lender only allows its customers to have one loan open on their system at any given time. Nikau was not aware that he could only have one open loan. Nikau thought that he had applied for a second loan. However, under the lender’s terms Nikau had applied for a top-up to his existing loan. 

The lender’s policy is to pay off a customer’s existing loan balance before paying out the balance of their loan top-up. The lender told Nikau that they were prepared to offer him a $21,000 loan top up. The lender did not explain to Nikau that the actual amount he could expect to receive was $6,000 once his outstanding balance of $15,000 on his first loan was settled. In their emails to Nikau about his loan top-up, the lender consistently referred to the top-up as Nikau’s ‘$21,000 loan’.

Two days after applying for the loan, Nikau returned his signed loan agreement. A couple of hours later the lender emailed Nikau to check whether he understood he would only receive $6,000. Nikau said that he was not aware the lender only intended to pay out $6,000. Nikau said he had agreed to a $21,000 loan and that he expected to receive $21,000 in his personal bank account by the end of the day.

The lender did not pay out Nikau’s loan top-up. The lender removed Nikau’s top-up application from their system.

Nikau complained to FSCL in late May 2023.


Nikau said that the lender misled him. Nikau signed the loan agreement because he expected to receive $21,000.

Nikau said that he was forced to forfeit a $10,000 deposit he had paid towards some new machinery. Nikau was relying on the loan to complete the purchase and could not settle the purchase if the lender was only going to pay out $6,000. Nikau wanted the lender to pay out the $21,000 loan.

The lender said that Nikau could have known that they would pay off his outstanding loan balance before paying out the remainder of the loan top-up. The lender said that there was a question in the frequently asked questions page on their website and a pop-up window in their loan application process that explained their loan top-up policy.


We thought that it was reasonable for Nikau to expect to receive $21,000 when he signed the loan agreement. All the emails Nikau received from the lender said he could expect to receive $21,000. Nikau’s original loan and loan top-up were visible as separate loans with different details on the lender’s website. The lender only told Nikau that he would receive $6,000 after Nikau had already signed and returned the loan agreement. 

There was not enough evidence to prove that the lender had caused Nikau to lose the $10,000 machinery deposit. Nikau was not able to show that he signed the loan agreement before he paid the machinery deposit, so we could not see a connection between the lender’s conduct and Nikau’s loss.


We decided that $500 was a fair amount of compensation to recognise the stress and inconvenience that Nikau had experienced. Both parties accepted our decision.

We recommended that the lender make the information about their top up process clearer and more noticeable on their website.

Insights for participants

Financial service providers should take care to ensure that they have made accurate representations before the consumer signs and returns an agreement. If the consumer relied on the financial service providers’ misrepresentation to their detriment, an award of compensation may be appropriate.