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Issue 22 - July 2015

Case Studies


This is a collection of case studies that have appeared elsewhere in this edition of The Circular. It includes case studies from the FOS Approach in this edition – covering non-financial loss claims. You can read more about our approach to these and other issues by visiting More case studies are available on our website at


Non-financial loss: FSP repeatedly contacting or attempting to contact the Applicant to recover the debt
The 2005 ACCC and ASIC Debt Collection Guideline for Collectors and Creditors provides that a collector should not contact a debtor more than 3 times per week, or 10 times per month.

The FSP made repeated telephone calls to the Applicant’s home and mobile numbers between November and January. In one week in November, the FSP made 24 calls to the Applicant (14 of which were answered) and sent one collection letter. The FSP made similar numbers of calls to the Applicant, on a weekly and monthly basis, during December and January.

FOS determined:

  • the FSP’s conduct had breached the Debt Collection Guideline and caused the Applicant significant stress and unnecessary interference with his peace of mind
  • the repeated breaches of the Guideline caused the Applicant additional non-financial loss for each claim
  • there were three separate claims for non-financial loss and awarded the Applicant $1,000 compensation for the November claim, $2,000 for the December claim and $3,000 for the January claim.
  • Non-financial loss claims case 1: FSP repeatedly contacting or attempting to contact the Applicant to recover the debt


Non-financial loss: Irresponsible lending
FOS concluded that the FSP’s advance of an investment loan to the husband and wife Applicants (who were made bankrupt on the petition of the strata plan owner of the block in which they had purchased the investment flat) represented irresponsible lending.

FOS concluded the Applicants had contributed to their loss by signing the loan application which they did not read, and which had been completed incorrectly by their broker. Given this, FOS apportioned liability for their financial loss 50:50 between the Applicants and the FSP. (The lending had occurred before the NCCP Act became law).

FOS determined the Applicants had suffered considerable stress, upset and inconvenience as a result of the irresponsible lending and all that had flowed from it, including their consequent financial difficulty, the need to move from their home, the strata plan owner’s issue of proceedings and obtaining of judgment against them, and ultimately, its petitioning for their bankruptcy. Taking into consideration their contribution to their loss, FOS awarded each Applicant $1,500 for their non-financial loss, to be paid to them personally, and not to their trustee in bankruptcy.

Non-financial loss: Poor response to financial difficulty
The Applicant requested a payment arrangement for his home loan, which was in joint names with his ex-partner. The FSP declined to assist the Applicant unless the co-borrower consented to any variation. The FSP also required the co-borrower to provide a statement of financial position before it would consider any payment arrangement.

FOS determined that the FSP should have considered the Applicant’s financial difficulty request even though the co-borrower was not involved, and its failure to do so caused the Applicant unnecessary stress and inconvenience. FOS awarded the Applicant $500 for his non-financial loss, to be applied to reduce the home loan balance.