Westpac Subsidiary St George Slammed by Judge Over $44.11 Mortgage Shortfall Dispute

Westpac, specifically its subsidiary St George, faced criticism from a NSW Supreme Court judge regarding a dispute over a $44.11 mortgage shortfall. The case involved a customer, Fiona Vinall, who was unable to settle on a new home due to an adverse credit report filed by the bank.

The dispute centered on a minor $44.11 mortgage shortfall, leading to severe consequences for the customer due to an adverse credit report.

Dispute Details

Ms. Vinall's mortgage repayments changed in July due to an interest rate decrease. She began repaying at the reduced rate a month earlier than the bank's interpretation, based on her reading of bank emails. This resulted in a $44.11 shortfall, which St George reported to credit reporting agency Equifax Australia as adverse repayment history information.

Justice David Hammerschlag characterized the bank's emails about the rate change as ambiguous and potentially misleading.

Impact on Customer

This adverse credit information significantly deteriorated Ms. Vinall's credit rating. Later, when she attempted to purchase a new home, mortgage brokers indicated that her credit rating made new lending impossible, preventing her from settling on the property.

Legal Proceedings

After the shortfall was covered by August, the bank initially resisted removing the adverse credit notice. Ms. Vinall initiated legal proceedings.

During a preliminary hearing, no representative for St George appeared, despite attempts by Ms. Vinall's lawyers and court staff to contact the bank. Justice Michael Slattery then ordered the removal of the credit mark.

At a subsequent hearing on February 6, bank lawyers appeared and sought to defend the bank's position, arguing they could only request a change from Equifax, not directly alter the information. Justice Hammerschlag, dissatisfied with this approach, ordered Westpac chief executive Anthony Miller to appear in court at the next hearing.

Resolution and Judge's Comments

Before the next hearing, Westpac's solicitors informed the court they had successfully removed Ms. Vinall's adverse payment history from credit registers, and Mr. Miller was excused from appearing.

In his judgment, Justice Hammerschlag criticized Westpac's conduct, stating the bank's refusal to resolve the problem was "legally unjustifiable and short on commercial morality."

He further added that, considering the minor nature of the shortfall and its severe consequences for the plaintiff, not taking steps to erase the recorded event was "unconscionable."

Future Actions

The matter is scheduled for transfer to the District Court to hear Ms. Vinall's claim for damages.

A Westpac spokesperson acknowledged the judgment, stated the bank would assess implications, and reiterated compliance with mandatory credit reporting obligations.

Westpac was also ordered to pay Ms. Vinall's legal costs.