Mr. Chan had several personal loans from a number of financial institutions. In 2012, he approached Bank C to consolidate his loans in order to pay an overall lower interest rate. It was agreed by Mr. Chan and Bank C that the consolidated personal loan would be repaid by monthly instalments. As part of the agreement, Bank C also issued a credit card for Mr. Chan and a supplementary card for Mr. Chan’s son. The supplementary credit card was for his son’s emergency use in the United Kingdom.
One year later, Mr. Chan found out from his bank statements that the actual interest rate for his personal loan account at Bank C was much higher than what he had agreed with Bank C previously. He complained to Bank C and refused to pay the loan by monthly instalments as scheduled. In response to the loan default, Bank C suspended the credit card it had issued to Mr. Chan and the supplementary credit card it had issued to Mr. Chan’s son. However, the suspensions were done by Bank C without prior notification to either Mr. Chan or his son.
Mr. Chan only discovered the suspension of the credit cards when his son could not use the supplementary credit card in an emergency situation. Mr. Chan was upset, worried and above all, very angry. Mr. Chan complained to Bank C. However, he felt that Bank C did not take his complaint seriously. He then decided to make an application for mediation at the FDRC.
The mediator was aware of the emotions involved in the dispute and he allowed Mr. Chan to air his grievances in a controlled manner. Representatives from Bank C impressed Mr. Chan by showing willingness to listen, patience and sincerity in trying to resolve the matter. Mr. Chan felt that his grievances were heard and properly addressed by Bank C and the matter was resolved by a re-arrangement of repayment schedule for the personal loan and a mutual agreement on the credit card service.
(The case studies are based on actual FDRC cases. Various information including names of claimants, financial institutions and their staff, actual claim and settlement amounts have been altered to protect confidentiality of parties.)