Lenders have come under fire from the Credit Ombudsman Service, with one receiving more than 100 complaints over the past year.
According to COSL’s latest Annual Report on operations, the wholesale lender received 109 complaints on residential mortgages between July 2012 and June 2013.
Of these, 92 were closed, with 33 resolved by agreement, 2 closed by a decision in the consumer’s favour, 22 discontinued, 30 labelled as “not substantiated and 5 outside of COSL’s jurisdiction.
The figures are up slightly on last year's report, in which Advantedge received 97 complaints, only slightly trailing behind Pepper
Australia, which received 99.
This year Pepper
Australia had the second highest number of complaints at 82, all but one of which related to consumer mortgages. The other complaint related to a motor vehicle finance loan.
Finance Corporation also received 14 complaints against it, and Pepper
Homeloans Ptyreceived a further 6, bringing the total number of complaints under the trading name Pepper
Homeloans to 102.
Bluestone Equity Release and Bluestone Mortgages had 42 complaints between them – 23 for reverse mortgages and 19 for consumer mortgages.
Liberty was also hit with 34 complaints, Resimac
with 23 complaints and La Trobe
Complaints against broking groups were relatively low, with Money Choice Ltd receiving the highest number of complaints at 11 and Aussie
and BLSSA (the Australian Credit Licence holder for PLAN, Choice and FAST)
both coming in at second place with 8.
The report found 32% of the 3763 complaints received by COSL related in some way to financial hardship. Last year financial hardship accounted for 36% of all complaints. In the majority of these cases it was due to the lender refusing to agree to a payment variation on the grounds of financial hardship.
“This level of financial hardship complaints is similar to previous years and we do not anticipate a reduction in the foreseeable future,” said the report.
The underlying causes of the financial hardship complaints were unemployment or reduced income (57%), illness of the borrower or their family member (22%), business failure (7%), relationship breakdown (7%), cost of living, including other debt (4%), interest rate increases (2%) and natural disasters (1%).