Financial difficulty: Meg’s story

Meg juggled full-time work with the sole care of her young son. However, she was forced to reduce her working hours after her mother could no longer babysit for her two days a week.

Meg could no longer afford to make her monthly mortgage repayments on her reduced income. She fell $200 short of meeting her monthly repayments two months in a row. After a number of sleepless nights, she called her credit union. Meg prepared a budget showing what she could afford. She also told her credit union that she planned to return to full-time work when her son started school in eight months. She asked what her options were.

The credit union told her they were unable to help her and that she needed to keep meeting her monthly repayments as agreed. Meg felt that their response didn’t solve her problem, so she lodged a dispute with the Financial Ombudsman Service (FOS) Australia. FOS helped both parties to talk with each other. The credit union offered Meg an interest-only term until Meg returned to full-time work in eight months.

Once the dispute was resolved, FOS referred Meg’s case to the Customer Owned Banking Code Compliance Committee ­– ­­­with Meg’s permission – as it believed the credit union may have breached its code of practice by refusing to help Meg in the first instance.

The Committee found a breach had occurred as the credit union had failed to honour its pledge to try to help its customers in financial difficulty. The credit union acknowledged the breach and committed to additional staff training to ensure all staff were aware of the credit union’s obligations under the Customer Owned Banking Code of Practice and the National Consumer Credit Protection Act.

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