Bank taken to tribunal

Press, 11 February 1986, Page 3

Bank taken to tribunal

PA Auckland The A.N.Z. Bank is being taken to the Small Claims Tribunal by a couple who claim they were not notified by letter of an increase in interest rates on a mortgage.

Mr Brian Labone and Mrs Gloria Labone, of Avondale, have claimed $lOOO, alleging breach of contract.

Mrs Labone said they were caused considerable stress and financial hardship when they had to pay about $l6OO extra to discharge the mortgage on their Victor Street home.

They say the bank broke the terms of the mortgage contract by not advising them directly in writing that interest rates had increased. But the bank said it complied by advising its clients of interest rate increases through public notices in newspapers. The Labones, both nearing retirement age, repaid their mortgage by bank transfer. They took out the $30,000 mortgage in June 1983 for three years at 18 per cent. The rate

dropped to 11 per cent in April 1984 and they were advised in writing.

Mrs Labone said it was not until June 1985 that they were again advised in writing that the rate was to increase to 20.5 per cent. They discovered on refinancing that the rate had increased four times and that they owed nearly $l6OO.

Mrs Labone said her husband had to quit his taxicab business because he used money put aside for repairs to pay the interest.

Now they are claiming $lOOO through the Small Claims Tribunal. It is the maximum allowed and she said they could not afford lawyers’ fees to claim the full amount. The A.N.Z. Bank claims it did properly notify the Labones and other mortgage holders of the increases through public notices in newspapers. In a letter to Mrs Labone, the general manager ’ (operations), Mr Brian Weeks, said it was a commercial decision as the most cost-effective method of notification.