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Unbelievable reason bank said ‘no’ to NAB customer applying for a home loan

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An Aussie was left stunned after his application for a home loan was rejected because he still had less than $2 owing on an old credit card. 

Sam, who stopped using his Citibank card in 2023, accidently left $1.50 owing on it, before he submitted an application for a home loan earlier this year. 

The minute sum became larger as two cents were added onto it every month due to interest and other fees. 

The small amount prompted his pre-approval home loan application to be rejected, throwing his plans to buy a home into disarray. 

An Aussie was left stunned after his home loan was rejected because he still had $2 owing on an old credit card (stock image)

An Aussie was left stunned after his home loan was rejected because he still had $2 owing on an old credit card (stock image)

NAB, which acquired Citibank in June 2022, apologised to Sam and admitted the credit card account should have been closed. 

NAB executive Alan Machet told Daily Mail Australia described the error as an ‘oversight’. 

‘It’s clear we weren’t at our best here and we apologise,’ he said. 

‘At the point at which the customer had essentially paid off the balance of the credit card, we should have closed the account.’

‘The fact that didn’t happen was an oversight and has caused unnecessary distress for the customer and, again, we are sorry this happened.’ 

Mr Machet confirmed the bank is in the process of restoring Sam’s credit file and they will ensure he is provided with further support if required. 

Sam said he was satisfied with the result after the bank promptly resolved the issue. 

The Financial Rights Legal Centre (FRLC), who provide legal advice on a range of financial matters, had assisted Sam during his dilemma. 

FRLC senior policy and communications officer Julia Davis said Sam was not aware he owed the bank anything and slammed the banking system in Australia. 

NAB claimed bank statement were sent out to Sam informing him that he owed money on the credit card. 

NAB , which acquired Citibank in June 2022, apologised to Sam and admitted the credit card account should have been closed (stock image)

NAB , which acquired Citibank in June 2022, apologised to Sam and admitted the credit card account should have been closed (stock image)

‘First of all, Sam really should have got notice when missed payments were being reported on his credit report,’ she told 7News

‘Under our current rules, banks have no obligation to contact a customer when they are having missed payments reported on their credit file, even when they might have an otherwise perfect record.’

A default listing is issued to a customer if the debt on their credit card reaches $150 or more and it has not been paid within 60 days. 

Customers will have their repayment history on their credit report for two years. 

They are urged to pay off any interest or fees such as monthly or annual account keeping fees, before they cancel their credit cards. 

The federal government ordered an independent review into the credit reporting framework used in the banking system in Australia in February. 

The review will explore the effectiveness of the credit reporting provisions under the Privacy Act (1986) and the National Consumer Credit Protection Act (2009). 



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