Banking heavyweight admits he got it wrong
SUNCORP Bank should give a grieving widow more time to repay her late husband's debt, the banking royal commission heard today.
Philip Field, the lead ombudsman for banking and finance at the Financial Ombudsman Service (FOS), faced questioning in relation to the handling of Melbourne widow Jennifer Low's debts.
Mrs Low's son Rien told the hearing on Friday his mother had been repeatedly harassed by Suncorp after his father's unexpected death in a 2015 workplace incident.
A visibly emotional Mr Low described the bank's repeated "threats" to evict his mother from the family home as she struggled to repay her husband's five debts, totalling about $1 million, which the family only discovered after the tragedy.
Today, Mr Field admitted FOS made mistakes when handling the family's dispute with the bank, and said Mrs Low's final outstanding loan should be able to be repaid over 17 years.
FOS had originally ruled that the Lows' fifth $220,000 loan should not have been approved by the bank in the first place, and that interest didn't need to be paid on the loan as a consequence.
However, it also ruled it was "reasonable" to order Mrs Low to repay that debt within 12 to 18 months or five years, depending on whether it was secured against the family's holiday home or another investment property.
But today, Mr Field admitted that decision was wrong.
"In hindsight I don't think that was the correct thing to do," Mr Field said.
Mr Field faced a grilling from counsel assisting the commission Rowena Orr, who said clients struggled to negotiate with banks and that the FOS process was also complicated.
She questioned whether customers would be deterred from raising complaints with FOS if they knew exactly what Mrs Low had experienced.
"If applicants knew that success in FOS looked like what Mrs Low experienced they would be deterred from making a complaint to FOS?" she asked.
"This is a very unusual case," Mr Field said in reply.
"We have staff who try very, very hard to get the right outcome".
The Low family has still not accepted Suncorp's five-year repayment offer, and Mr Field told the commission he expected the bank to reverse its decision and allow Mrs Low to make principal-only repayments over the original 17-year life of the loan.
The Lows sold off their family home for just over $800,000, with the proceeds used to pay off Mr Low's first four business loans.
The hearing continues.