Consumer Action Law Centre has taken legal action to defend a struggling single parent hit by personal tragedy and the current financial crisis against Citibank for a $10,000 credit card debt.
Consumer Action solicitor, Jillian Williams, says her client alleges that as soon as he realised he could not afford to make his usual Citibank credit card repayments, he contacted the bank to let them know and offered to keep repaying but in smaller monthly amounts he could afford.’
Ms Williams said that lenders have an obligation to respond reasonably to requests to vary payments due to hardship, and says that in most cases, consumers have a legal right to apply to a tribunal or court if they are dissatisfied with the response. Unfortunately, some consumers aren’t aware of their rights until it’s too late.
‘Sadly, a combination of personal tragedy as well as business and health issues has meant that my client’s income has been drastically reduced and he is experiencing extreme financial hardship as he attempts to meet his mortgage and credit card debt.’
‘Our legal claim states that his attempts to negotiate with Citibank failed despite making several offers to make repayments and providing evidence of his health problems.’
‘By contrast my client’s home lender, who is owed the much larger debt of $250,000 under a mortgage, has been more understanding and has agreed to affordable repayments.’
However, Ms Williams says that her client originally took the Citibank credit card because he was told it was a condition of his home loan that he accepted the credit card.
‘Unfortunately, he built up debt on the card, and like other consumers have found that it can be the smaller credit card debts – rather than mortgage debt – that pushes them over the edge.’
Citibank have filed a legal claim and my fear is that although he has managed to ensure that his mortgage is almost up to date he could potentially lose his house over a credit card.’ Ms Williams said.