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What happens when hardship relief ends?

Tony has had a credit card for about eight years. From time to time, he had difficulty making his monthly payments and the lender provided short-term relief allowing Tony to get the payments back on track again.

In January 2020 Tony’s wife became unwell. Tony left his job and started working as an Uber driver, because the more flexible hours would allow him to care for his wife. Tony contacted his lender, said his circumstances were changing, and asked for temporary relief while he established himself as an Uber driver.

At this point Tony’s account was $600 in arrears and he discussed a repayment plan with the lender’s hardship team. Tony agreed to pay $80 a week for three months. He paid the first $80 but made no other payments.

Towards the end of March 2020, during the first Covid-19 lockdown, Tony contacted the lender explaining that he had lost his entire income and could not afford even the $80 weekly payments. The lender agreed to defer the payments and waived interest and fees until the end of May 2020.

Over the following year Tony continued to experience financial difficulty. From time to time the lender deferred payments, interest, and fees but Tony was unable to keep to the agreed repayment plans.

By June 2021 the lender decided they were no longer able to offer Tony any hardship relief. There were some difficult conversations between Tony and the lender and Tony complained to FSCL.


Tony said he had tried to contact the lender on numerous occasions, but they would not offer him any hardship relief. In one telephone call Tony said the lender had breached his privacy by calling when Tony had a passenger in the car. The call automatically connected to the Bluetooth so that the passenger heard all about Tony’s financial difficulties.

The lender said they had provided Tony with hardship relief by deferring payments and waiving interest and fees on occasion, but his financial position did not improve. The lender agreed to defer payments and waive interest and fees for one final three-month period but said that when the three months ended Tony’s payments would revert to the contracted amount and if he could not pay, they would take recovery action.

With respect to the alleged breach of privacy, the lender said they had spoken to the staff member about his conduct during the call.


Under the Credit Contracts and Consumer Finance Act 2003, which is further expanded on in the Responsible Lending Code, lenders are obliged to help borrowers experiencing financial hardship. The Responsible Lending Code guidance makes it clear that hardship relief is intended to help the borrower overcome short-term financial difficulties so that they can repay the debt, without prolonging financial difficulty.

Our review showed that the lender had restructured payments so that Tony could afford to repay the debt but deferring payments and suspending interest and fees was only ever a short-term solution. By 2021, if Tony was unable to keep to agreements it was reasonable for the lender to decline further hardship applications and start recovery action.

We also listened to the phone call where Tony alleged that the lender had breached his privacy. Although Tony did say he was driving and that he would call the lender back he did not say there was a passenger in the car. On the evidence available to us, we were unable to find a breach of privacy.


Tony was disappointed with our investigation. Tony said he would be referring his complaint about the breach of privacy to the Privacy Commissioner.

Insights for consumers

If your circumstances change affecting your ability to repay debt, contact your lender immediately – even before you have missed a payment. While your lender is obliged to provide temporary relief, perhaps by deferring payments and suspending interest and fees, this relief is not indefinite. If your financial situation does not improve your lender is entitled to say that the hardship relief period has ended and, if you are unable to make payments, to start debt recovery action.