The following case study has been provided by Deborah Welsh, Financial Counsellor at South East Community Links.
Jim* is a divorced male aged pensioner, from a CALD background. He has an acquired brain injury and is illiterate. He lives alone in a house which he inherited.
Jim receives the Aged Pension and is being supported by a psychologist and psychiatrist.
Jim met a woman (alleged perpetrator) in early 2019 and began a relationship with her. The woman moved into his home and began taking money from him. In mid-2019, the woman threatened Jim with violence if he did not draw funds from his term deposit, held with Big Bank, for her.
A month after the first withdrawal, the woman demanded that Jim obtain a loan from Big Bank. Jim advised Big Bank that he was borrowing the money for some home improvements and Big Bank provided a loan of $20,000 to him, despite him being illiterate. The money was subsequently taken by the woman.
Jim continued to withdraw funds from the term deposit until January 2020, when the woman attacked him with a knife and he obtained an intervention order.
Jim was referred to a financial counsellor, Felicity*, by his cousin after a call was made by the Aged Person’s Mental Health Team to enquire about Jim’s eligibility for referral.
Jim had no funds left in his term deposit account (originally $40,000) and still owed $9,000 on his personal loan. The term deposit had been put aside for his future needs, but $6,500 of tis money had been used to pay down his loan when he fell behind in loan repayments.
In early 2020, he started paying $500 a fortnight off his loan, as he had been encouraged to do so by Big Bank. He was struggling to repay the loan on this basis, so borrowed money from family members. His cousin paid many of his bills and he ate his meals with the cousin to save money.
He told Felicity that when he was applying for the loan, he had not been advised to discuss the terms with a support person, and so he didn’t understand that he would be charged interest.
The majority of his term deposit funds, and all his loan, were taken by the alleged perpetrator.
The financial situation, as well as the violence experienced by Jim, left him feeling ashamed and embarrassed by what had occurred. He would often be in tears when he spoke with Felicity about his situation.
Felicity obtained support letters from Jim’s psychologist and psychiatrist detailing his distress because of the physical violence and financial abuse perpetrated against him. The letters also noted Jim’s cognitive impairment, limited English skills and illiteracy.
Felicity emailed Big Bank requesting loan assessment documents, loan statements and term deposit statements. She also requested that Jim’s debt be waived, loan repayments refunded, and term deposit reinstated. Statement of Financial Position (SoFP) and medical support letters were included with the email. The request noted the family violence perpetrated on Jim and that there was an intervention order in place.
Felicity received confirmation from Big Bank that Jim’s debt would be waived on the basis of hardship, but no response was provided on the refund of loan or term deposit funds, so Felicity escalated request for a refund of loan repayments and reinstatement of term deposit to Big Bank Internal Dispute Resolution.
Big Bank allocated separate staff members to review each request and, in both cases, the reviewers noted that “the client had lied” about his reasons for needing the funds and declined the requests.
Based on the responses, Felicity lodged complaints with Big Bank’s Customer Advocate regarding both requests, noting Jim’s lack of capacity and limited English; the bank’s failure to make reasonable enquiries into Jim’s expenses and ability to repay a loan; and the bank’s lack of understanding of Jim’s situation as a victim of family violence, evidenced by both reviewer’s calling Jim a liar when he stated his reasons for requiring the funds.
The Customer Advocate initially responded with an offer to reimburse the interest paid on Jim’s loan in the amount of $2,500 and to pay a medical bill, which appeared on Jim’s SoFP, in the amount of $3,500. There was no offer to refund the term deposit as the Customer Advocate stated that bank staff had fulfilled their obligations by questioning Jim about his early withdrawals each time and not fast-tracking the 30 day wait time for such withdrawals.
Felicity went back to the Customer Advocate, noting that Jim had never received a loan before and had no understanding of the process and requested a further review. The Customer Advocate agreed to go back to her team to discuss the matter further.
The Customer Advocate came back with an offer to refund Jim all his loan repayments: approx. $14,000. As the remainder of the debt had already been waived by Big Bank, Jim’s issue with Big Bank was resolved.
Jim was very happy with this offer. The funds were returned to him in less than a week. He now has enough money to pay his bills and buy food and is setting aside the funds he received.
*name and some personal details, which do not have bearing on the case, have been changed.