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In February, 2005, an 80-year-old widowed client decided to sell her house to her daughter-in-law for $100,000, though she would continue to live in the house. As the daughter-in-law was not able to qualify for the $95,000 mortgage on her own, she asked the client to co-sign the mortgage, as well as act as a guarantor on a loan, which the client did. A few months later, the daughter-in-law informed the elderly client that she no longer wished to provide her with accommodation and asked her to move out of the house.
A client applied for a $120,000 personal loan from her local branch in order to purchase a boat costing $140,000. The client was approved for the loan consisting of monthly payments of $615 (principal + interest) for 15 years with a $15,000 down payment. Nine months later, the client received a statement from the bank saying she owed more each month than what was initially agreed.
One year after signing for a five-year term mortgage, the client decided to list her property for sale. At the time of closing, she discovered that a substantial penalty was charged by the bank in order to pay out her mortgage. The client had been under the impression that the mortgage prepayment penalty would equal three months' interest. She was prepared to pay that amount but was surprised to find out later that the actual penalty would be based on an Interest Rate Differential, resulting in a much larger penalty amount.
Due to his impending divorce, a client went to a local bank branch to remove the credit room available on a joint personal line of credit by reducing the limit to an amount just above the outstanding balance. The client was advised that it may take up to five business days for the paperwork to go through but that the changes had been made.
An 82-year-old woman received a letter from her friend in which the friend admitted she took $1,940 from the client's bank account before leaving the country. The client immediately informed both the police and her bank.
The Ombudsman for Banking Services and Investments (OBSI) appoints Douglas Melville as new Ombudsman and CEO
From the Ombudsman's desk • OBSI-AMF Communiqué • Proposed new statistical reporting • Case Study- Suitability • OBSI Outreach
The clients, a married couple in their early 50s, received a $650,000 settlement from a car accident which permanently disabled the husband. They consulted with an investment advisor about how to invest the money.
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