Financial Ombudsman Service, Financial Services Complaints Limited (FSCL) is warning people and businesses not to wait until debt becomes unmanageable before asking for help. Recent complaints show that many people are leaving it too late to ask their lender for relief.
Acting early can prevent a manageable problem from becoming a crisis. Once debt spirals, options narrow and financial difficulty escalates rapidly. Lenders have more flexibility to help before accounts fall into serious arrears.
Financial Ombudsman Susan Taylor reinforces a harder truth: “The longer people wait, the more stressful and difficult the situation can become.” The lender’s actions can include repossessing assets such as cars and homes. Too many people wait until they are already in serious trouble before speaking up.
Remembering to ask for help early can make all the difference. In a recent case investigated by FSCL, early contact and a willingness to keep talking led to a workable outcome after a job loss. It also reinforces the responsibilities lenders have under the Responsible Lending Code, including having policies and procedures for identifying borrowers in difficulty and responding appropriately.
FSCL encourages anyone who thinks they may struggle with loan repayments to contact their lender as soon as possible, explain what has changed, ask what support may be available and consider seeking support from a free financial mentor or budgeting service.
And remember, each financial service provider in New Zealand has a dispute resolution service. If a consumer or small business thinks they’ve been treated unfairly, they can contact the dispute resolution service for free help.
Notes to Editor
Related case note: https://fscl.org.nz/case-studies/struggling-with-debt-afterredundancy/
