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Disputes with banks or credit providers

Information about resolving a dispute about a consumer credit debt, including credit cards and home loans, personal loans, payday loans and consumer lease agreements.

If you are having difficulties with a home loan, personal loan, credit card or consumer lease or other type of credit, you may have a dispute with your bank or credit provider.

Bank loans, credit cards and mortgages are consumer credit contracts. National credit laws cover these types of contracts. These laws give additional rights to consumers if they have a consumer credit debt problem.

If you have a consumer credit debt and you are having problems paying your loan, it's important to act quickly.

You should contact your lender directly to find out about their IDR complaint proc​ess. You can find their details on the Australian Financial Complaints Authority (AFCA) website. You may need to send a letter or fill out a form.

The lender must respond t​​​o you in writing within 21 days of receiving your complaint.

If your complaint is not resolved within a set time frame or if you do not agree with your lender's decision, you can lodge the Australian Financial Complaints Authority (AFCA), which is the External Dispute Resolution (EDR) scheme. 

For more information, go to the AFCA website.

Requesting a hardship variation is a type of IDR. You can contact your lender and ask them to temporarily change your repayment arrangement. This is called an application for 'financial hardship', 'hardship variation' or 'hardship notice'. You can apply for a hardship variation over the phone or in writing.

When you apply for a hardship variation, you will need to: 

  • ​give details of your account name and number
  • explain your circumstances and why you are having problems paying your loan
  • negotiate to reduce or postpone your repayments.

After sending your request for a hardship variation, your lender must consider your application and respond to you in writing within 21 days to inform you of their decision. If your lender requests further information, you must provide it within 21 days. 

If your lender does not accept your application for a hardship variation, you can apply to the external dispute resolution (EDR) scheme, the Australian Financial Complaints Authority (AFCA). If you apply to AFCA, your lender must stop taking any action against you.

From 1 July 2022, your credit report will show if you have a hardship arrangement in place. This information will stay on your credit report for 12 months.

If you have been served with a statement of claim for a consumer credit debt, you can get help from AFCA to resolve the dispute. For more information see External dispute resolution (EDR) below.

If you have received a statement of claim from your lender, you should get urgent legal advice.

An external dispute resolution (EDR) scheme is a free, independent service for resolving disputes between consumers and credit providers. It is an alternative to going to court, which can be expensive.

If you have been served with a statement of claim for a consumer credit debt, you can get help from the Australian Financial Complaints Authority (AFCA), to resolve the dispute.

From 1 November 2018, AFCA is the sole EDR scheme. 

If you lodge a dispute with AFCA, your lender must stop taking any action against you. You should get legal advice before making a complaint to AFCA. 

You can make a complaint to AFCA if you have already tried to resolve your dispute with the bank or credit provider or if they have started a court case against you.

If you receive a statement of claim and make a complaint to AFCA, the creditor generally can’t continue with the court case or enforcement action without AFCA's consent.

If the credit provider has started a court case or got a default judgment, you should make a complaint to AFCA as soon as possible. You should get urgent legal advice​.

The time limits to lodge a complaint with AFCA vary depending on the type of complaint.

If your complaint relates to changing your credit contract because of financial hardship or some unfair conduct by the lender under the national credit laws, you must generally make a complaint within:

  • two years after a written response from the lender's IDR complaint process
  • two years after the termination of the credit contract, whichever is later.

In all other situations (besides superannuation related complaints), you can lodge a complaint within two years after a written response from the lender's IDR complaint process, or six years from the date when you first became aware of the problem, whichever is earlier.

AFCA can handle complaints about superannuation, banking, credit cards, mortgages, general and life insurance, financial planning and investment advice. For example, you can apply to AFCA if: 

  • ​your goods were repossessed by your lender without a default notice
  • your lender has refused your application for a hardship variation
  • your lender gave you an unsuitable loan
  • you have been served with a statement of claim for a consumer credit debt and you want to apply for financial hardship
  • your lender has incorrectly listed a default on your credit file.

AFCA can consider consumer credit complaints about credit providers for claims up to $1 million. Compensation is limited to $500,000. You should get legal advice to see if you are entitled to compensation.

You can lodge a dispute with AFCA:

  • ​if you have unable to resolve your dispute with your lender, bank or credit provider, or  
  • if you have been served with a statement of claim or are aware of a default judgment being enforced against you.

You can apply either by

  • submitting online via the AFCA website
  • submitting a complaint by email, fax, letter or phone.

Your application should include:

  • your name and your contact details
  • the details of your representative (if you have one) and information about if they will be getting money for helping you
  • the name and contact details of your lender
  • details of the service you received from your lender (for example, a policy or account number)
  • details of the complaint and any attempts you made to resolve the complaint with your lender
  • the outcome you are seeking and details of any financial loss you have suffered
  • photocopies of supporting documents (for example, loan documents, letters from your lender, account statements and reports).

If you have been served with a statement of claim, you should tell the lender (the plaintiff) or their legal representative that you have lodged a dispute with AFCA. Remind them that they must not file for default judgment while the dispute is being considered.

If your application has been accepted, AFCA will contact your lender and try to resolve the dispute through negotiation and conciliation.

If the dispute can’t be resolved by agreement, AFCA will make a decision. If you agree to AFCA's decision, it will become binding on your lender. If you do not accept the decision, you should get legal advice.

If you were served with a statement of claim, it is not too late to file a defence if you do not agree with AFCA's decision. You should get urgent legal advice about the strength of your defence. The plaintiff (lender) can get default judgment if you do not file a defence within 28 days of when the statement of claim was served.

For more information, go to the AFCA website. 

  • Time limit

    If you have received a default notice, don't ignore it! You have 30 days to fix the default before the lender can start a court case to recover the debt from you or repossess any goods that are secured by the loan.

Contact us

If you have a legal problem in NSW, Legal Aid NSW is here to help you.

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