Message from the Advocate

The Customer Advocate received two requests for review with a similar theme of a Land Loan approved by ANZ and a Construction Loan subsequently declined. 

The Customer Advocate’s review of Mr H’s file showed that the Construction Loan was declined due to concerns that the security offered by the customer was not suitable.

Mr H’s view was that it did not seem reasonable for ANZ to decline a Construction Loan in circumstances where the Land Loan had been approved with knowledge that he would be building on this land.  

The Customer Advocate took the view that, when ANZ lends money to a customer to buy land and it is aware that the customer intends to build on that land, in approving the Land Loan, ANZ accepts that the land is suitable security for the Construction Loan.

The Customer Advocate therefore recommended to ANZ that the Construction Loan be approved together with a goodwill payment to the customers in recognition of the significant difficulties the matter had caused them.

Mr S’ complaint differed. It concerned ANZ’s decision to decline his Construction Loan application on the basis of a default listing on Mr S’s credit file, Mr S believed that ANZ ought to approve the Construction Loan on the basis that ANZ was aware of the default listing against him at the time that it approved the Land Loan and had not acted on that knowledge until he applied for the Construction Loan.

The Customer Advocate’s enquiries showed the Land Loan was approved on incorrect information provided by Mr S. By the time of approval of the Construction Loan, new information had come to light. The Customer Advocate took the view that ANZ was not bound to advance further funds to Mr S in circumstances where the initial decision to provide him with the Land Loan was based on incorrect information. Mr S’ request was declined.

Mrs X requested a review of her complaint about the withdrawal of funds by her ex-partner from a jointly held ANZ account. It was established that Mrs X had advised ANZ on a number of occasions prior to the transaction that there was a marital dispute, however, ANZ did not take any action to restrain the account.

ANZ policy requires that, if the bank becomes aware of a dispute between joint account holders, the signing authority on the account should be changed from “either to sign” to “both to sign”. Any transactions on the account would then need to be authorised by both account holders.  By not taking this action, ANZ enabled the withdrawal in question to occur.  The Customer Advocate recommended that Mrs X be reimbursed half the funds based on the presumption that her ex-partner was also entitled to half the funds in the joint account. In addition, the Customer Advocate recommended that the bank’s policy be re-communicated to all branch staff.

A similar case involved a company dispute between two directors and two third party signatories. When the company account was set up in 2005, the directors, Mr and Mrs Z, were signatories to the account. Mr and Mrs P were third party signatories to the account. The signature card allowed anyone of the four to transact or operate the account.

In 2007 Mr P became a director with Mr Z. Mrs Z ceased to be a director and she was changed to third party signatory on the account together with Mrs P.

Following a dispute between the directors, Mrs P visited a branch in order to change the signature card from “anyone to sign” to “both directors to sign”. The details of this conversation are disputed, however, Mrs P left the bank believing that ANZ had changed the signature card in accordance with her belief.  ANZ had, however, instead changed the signature card from “anyone to sign” to “any two to sign”. This meant that any two of Mr Z, Mrs Z, Mr P and Mrs P could operate on the account, rather than just the two directors Mr Z and Mr P. The Customer Advocate’s view was that internal bank notes supported Mrs P’s assumption that the authority had been changed to “both directors to sign”.  

The Customer Advocate’s review found that the staff member who assisted Mrs P was not aware of ANZ’s internal guidelines on Company disputes.  These state that changes to an account can only be made by both directors. The Customer Advocate’s view was that Mrs P should have been advised of this and had she been, she then could have taken other steps to safeguard the account.

Subsequently, Mr and Mrs Z withdrew funds from the Company without the consent of Mr P, the other director. The branch accepted the instructions on the system for ”any two to sign”.  The Customer Advocate recommended that Mr and Mrs P receive half the funds withdrawn and that staff be trained on the bank’s internal guidelines so as to minimise the risk of a similar incident occurring in future.