Widow has charges from late husband’s loan written off

Lack of spousal consent key to ombud’s finding

A widow got a little relief from charges related to a loan her late husband took out without informing her after she complained to the Ombudsman for Banking Services.

The woman’s husband died and she was appointed the administrator of the deceased estate, according to the case summary in the ombudsman’s annual report. In administering the estate, the woman discovered the bank had granted her late husband a loan of R25,000 without her knowledge or consent. As they were married in community of property, the consumer asked that the debt be written off as she had not given her consent.

She also claimed the loan was a case of reckless lending, since her late husband could not afford the repayments. The bank denied the credit had been granted recklessly, stating it had relied on the accuracy of the information supplied by the woman’s late husband and his declaration that he had obtained his wife’s consent.

The Ombudsman for Banking Service’s investigation concluded that the loan had not been granted recklessly. However, the declaration form signed by the woman’s late husband specifically catered for his spouse to declare that she consented to her husband obtaining the loan. And she had not signed it. The bank could therefore not have been under the impression that the agreement was entered into with the consent of the consumer, the ombudsman’s annual report says. However, since the estate had benefited from the money advanced by the bank, the ombudsman recommended that it repay the outstanding capital amount only, and that the bank should write off associated fees and interest, to which it agreed.