Retirement years should be enjoyed at a slower pace with loved ones.

These years, after all, were meant for you to enjoy the fruits of your hard work.

However, a woman's senior years were 'blighted' by distress after a dire situation that deeply affected their family's finances.

Deborah and Patrick Sullivan, along with 89-year-old Beryl Clark, were enticed by a substantial loan offered by Pepper Money.

The deal also meant using their property in southwest Sydney as collateral.

In May 2018, they secured a 30-year mortgage just shy of $1.4 million.

However, the dream quickly soured as they fell into arrears in less than two years.

The Sullivan family could lose their home due to an allegedly unfair loan policy. Image Credit: Pexels/Pavel Danilyuk

According to court documents, the weight of a debt that was 'unjust' and unserviceable.

The family's plight worsened after Ms Clark—who had unwittingly signed up as the loan's guarantor—passed away.

The Sullivans and the executor of Ms Clark's estate, Gary Clark, took their battle to Federal Court, wanting to overturn the loan and to halt the sale of their property.

In a statement the Sullivans filed to Federal Court, they wrote, 'The loan caused emotional distress, limited her options including her access to health care and blighted the last years of her life.'

The Sullivans alleged that Pepper Money failed to adhere to its obligations under the credit code and did not take reasonable steps to ensure the borrowers could repay the loan without undue hardship.

The case highlighted another disturbing issue: the exploitation of vulnerable seniors through complex financial products they do not fully understand.

In assessing the loan's suitability, Pepper Money was accused of not requesting any financial documentation from Ms Clark or verifying the Sullivans' income through tax returns.

The mortgage was unjust, and accused the lender of obtaining a guarantee from an elderly woman 'by stealth'.

As the Sullivans go to court without legal counsel, they are seeking orders to set aside what they claim to be a void, null, and invalid mortgage.

They also hoped to reduce the repayment amount.

As the case continues, Pepper Money did not seize or sell the property.

The Sullivans and Pepper Money are slated to face each other in a hearing on 6 August.

This distressing story serves as a stark reminder to our community to be vigilant when it comes to financial agreements.

Always ensure that our loved ones can fully comprehend the terms and implications of any financial commitment they enter into, especially when it involves large sums of money.

It's also essential to seek legal and financial advice before signing any loan agreements and to be wary of lenders who do not perform due diligence.

Key Takeaways

• An 89-year-old woman's life was negatively impacted by a $1.4m home loan from Pepper Money.
• The Sullivan family claimed Pepper Money did not fulfil its obligations to check if the loan was serviceable without causing financial hardship.
• The Sullivans and the executor of the elderly woman's estate sued Pepper Money, seeking to have the loan overturned and prevent the sale of their property.
• The family will face Pepper Money in a hearing scheduled on 6 August to settle the case.

Have you or a loved one faced financial challenges due to a loan or mortgage? What measures do you take to ensure financial safety? Share your experiences and opinions with us in the comments section below to help others avoid such traps.

 

[NotNats]

My husband paid off our mortgage back in 2015 (he died in 2017). To this day and for the rest of my life I will never use our home we built & he paid for, for any type of loan. I'd rather starve or freeze to death.

 

[David567]

There's a scam at every turn. I think there's more chance of being scammed than getting run over standing on the highway. So sad what humans and business have stooped to.