Bank closed my Line of credit without informing me

[donkey]

I'm unhappy with the CBA as they closed my $50k veridian line of credit without informing me.

There is the legislation in oz stating that if an account has not been used for 3 yrs then it should be closed.

Do any legal gurus on this site know if it was illegal for them to close it because it was effectively a lending account not a transaction account as such.

It was linked to the security / mortgage I have on my investment property and I obviously had not been using it but saving it for a rainy day...

many thanks

 

[mattnz]

I bet the fine print says they can do what they want with it.

 

[redwing]

More here

CASH GRAB: Inactive bank accounts to be seized

 

[Rolf Latham]

that legislation hasnt got diddly to do with LOCs

Banks generally dont like unused facilities sittin around since they need to make provision for capital for folks to actually use them.

LOCs are particularly a challenge because they dont have have fixed loan terms, rather are "repayable on demand"

ta
rolf

 

[Jamie M]

Have you called them and asked them to reinstate it?

Cheers

Jamie

 

[jrc77]

Have you called them and asked them to reinstate it?

Cheers

Jamie

What he said - CBA once disabled one of my loans as I had paid it down to $0 (with intent to redraw on it). A quick phone call fixed it up.

Jason

 

[redwing]

What he said - CBA once disabled one of my loans as I had paid it down to $0 (with intent to redraw on it). A quick phone call fixed it up.

Jason

Someone else on the forum mentioned similar and to keep a base amount in there

 

[moyjos]

Back at the beginning of the GFC there was talk of the banks pulling back unused lines of credit. What I did was transferred a lump to my online high interest account. Sure I was paying ~1% for the trouble (difference between what ING was paying and what CBA were charging) but it suited my SANF.

We were at the point that IF we had needed that $$ we would not have qualified for it so it was insurance.

Now I just keep rotating funds around to keep things active.

 

[DavidMc]

I wonder if it will every be prudent at some stage to drawn down these funds and place them in a high interest saver at another bank. It'll cost 0.5% or so, but they will never be able to just close it like this.

 

[Aaron_C]

I wonder if it will every be prudent at some stage to drawn down these funds and place them in a high interest saver at another bank. It'll cost 0.5% or so, but they will never be able to just close it like this.

No best thing to do is just change the product to a term loan.

 

[Paul@PFI]

Closed

Had a client who had a Colonial loan against IP. She had made extra repayts and built a nice offset balance. CBA buy Colonial. CBA staff member says "we dont offer those accounts anymore" and your new account statemenst will be automatically changed to the equivalent CBA product on same terms etc. But they emerge the offset and loan and create a redraw facility instead. They claim that the loan account and offset type an incompatible and cannot offer same. And dont try !! Client loses a permanent tax deduction of $60K (balance in offset).

After three years of wrangling bank went back rewrote its software (they admitted) and backdated all transactions to reinstate the offset. ATO agreed it was OK when they did this.

Message = Pursue the bank !