Mortgage

Bank loan questions ‘invasive’ | RNZ News

calculator and dollar bills in New Zealand currency
Written by Publishing Team

First published in Otago Daily Times

by White Rider

More stories have emerged detailing the effects of the new loan’s drastic changes, including one woman who came under investigation about her social life, job, and dollar spending.

New Zealand dollar bills calculator and currency

Loan applicant: “Every single transaction was analyzed and questioned.”
Photo: 123RF

Changes to the Credit Contracts and Consumer Finance Act took effect at the beginning of December, which require banks to break the spending habits of applicants before loans are approved.

The changes were intended to protect vulnerable borrowers from loan sharks, but many found the new processes to be disabling and unnecessary.

One of the women, who did not want to be identified, said the process of getting a loan was invasive.

She was seeking a loan of less than $10,000 to help with emergency medical expenses.

She went to ANZ, where she had her best rate, but was referred to a manager, who decided the loan wasn’t affordable for her, she said.

Nothing but a superficial explanation of rejection.

In the past it had received a similar loan without issue, despite being in a worse financial position.

After the rejection, I contacted the co-operative bank for the loan.

She had to detail her spending habits specifically, with the bank asking for explanations for deviations of less than $5.

The bank inquired about her social life, hobbies, and how much she spent on parking.

“Sometimes I wax my eyebrows, I had to explain to him in detail how often this happened.

“Every deal has been analyzed and questioned.”

Despite being a paid employee, she had to show the bank her work contract to prove her employment.

She also had to write an in-depth summary of what her job went along with, she said.

The workers were “very sorry” about it, but she didn’t feel that many of the questions were relevant.

As part of the process, the bank asked her if she was interested in life insurance, and she agreed to pay for it.

During the process, she was asked to provide in-depth details of her medical history, such as the exact circumstances that led to her PTSD.

Once this process was complete, she was told that the $2 weekly fee for insurance could mean her loan was no longer accepted.

The loan was eventually approved, but the experience kept her from thinking about getting a loan in the future and made her think twice before buying a home, she said.

“The whole process was invasive.”

Others shared their experience on Facebook, saying they were questioned about spending money on doctor visits, prescriptions, charitable donations and simple luxuries.

One user said a financial advisor told him to cut off all extra spending, such as a Netflix subscription.

Another called the new operation humiliating and devastating.

Many users have talked about the importance of using cash, as it is untraceable and can help as a way to get around the system.

This story first appeared in the Otago Daily Times

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