Financial Services Recovery Update

Pursuing complex recovery actions such as claims against valuers and brokers can be a lengthy process. If the loan accounts in question are kept active, lenders frequently encounter reporting and compliance issues because of the age of the debts. In responding to these issues, for accounting purposes, many lenders have adopted a practice of internally writing off delinquent loans once recoveries action reaches a certain stage.

In CBA v Greyson [2005] FMCA 852 the Federal Magistrates Court of Australia rejected an argument by a borrower that a lender's debt was no longer owing because it had been written off by the lender for accounting purposes. The judgment provides a degree of comfort for lenders who write off debts for reporting purposes whilst maintaining actions