Bank's $700,000 mortgage blunder sparks ‘torturous’ legal battle–find out why
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Banking errors are rare, but when they do happen, the consequences can be far-reaching—especially when the mistake is in your favour.
One Queensland woman found herself in precisely that position, only to be drawn into a years-long legal battle after doing what most would consider the right thing.
What unfolded has been described in court and by mental health experts as deeply troubling… and potentially abusive.
A Queensland woman who alerted her bank to a costly mortgage error said she had endured years of mental, financial and legal torment as a result.
Maria*, a 70-year-old investor, discovered in 2018 that both mortgages on her Norman Park property had been removed by ANZ due to what a judge later described as a bank error ‘for which [Maria] carries no blame’.
She had originally requested the release of only one mortgage when her $700,000 investment loan was converted to a home loan in 2017.
The error only came to light more than a year later when she attempted to sell the property and realised the bank had deregistered both mortgages.
Upon notifying ANZ, the bank lodged a caveat on the property to flag its interest.
That caveat lapsed in March 2019 and for over a year, the matter remained untouched.
But the bank suddenly launched legal action in January 2021 after receiving a mysterious anonymous letter alleging Maria was about to sell the home.
ANZ proceeded without notifying her initially, citing urgency as the reason.
Maria said the ordeal had taken a devastating toll on her well-being and finances.
‘I haven’t been able to do anything for years because I’ve been trapped in this situation, and I think that the misbehaviour of the bank has been instrumental,’ she shared.
‘This is what they do to people who stand up to them or found out they made substantial errors–they just want people to give up or to go away or die.’
She also claimed the bank had accused her of attempting to commit fraud, despite her having informed them of their own mistake.
Medical professionals linked her deteriorating mental health to the ongoing pressure from ANZ.
A letter from her treating psychologist described the bank’s conduct as possibly ‘torturous to one’s physical and mental health’.
‘Beyond a certain point it might even be categorised as torturous to one’s physical and mental health,’ the psychologist wrote.
The psychologist questioned whether the delays and legal tactics amounted to ‘a prolonged pattern of vexatious, callous, harmful treatment’.
Maria said the case had remained stagnant since 2022, leaving her in legal limbo and emotional distress.
Supreme Court Justice Glen Martin labelled parts of ANZ’s case as ‘bold and adventurous…but entirely misconceived’ and speculated they ‘may just be examples of a plaintiff wanting to get its retaliation in first’.
Maria claimed the current case was just one in a string of mistakes dating back to the original loan 17 years ago.
She said the bank had repeatedly registered mortgages to incorrect properties across four separate loans.
‘ANZ took a legal mortgage on a property when their loan documentation said something different and ANZ said it doesn’t matter what the street address is–it’s chaos,’ she said.
She also alleged the bank had taken eight years to release a mortgage after refinancing and approved the 2017 loan despite her failing the credit check.
The loan in question was offered under ANZ’s ‘breakfree’ package, which led to a $25 million fine in 2022 and compensation to nearly 700,000 customers over a 20-year period.
Maria received just 74 cents in remediation, which she described as insulting.
In 2019, she refused to sign a new mortgage without legal advice, citing distrust in the bank.
She said ANZ initially agreed to pay legal fees and told her to get a solicitor’s quote, which came to $10,000.
But the bank then allegedly backtracked and offered only $1000, denying it had ever promised to cover the full amount.
‘I didn’t know what to do, but I wouldn’t sign that,’ she said.
‘I was not going to sign that mortgage document without legal advice as I just don’t feel comfortable, and I left it at that.’
Maria said the court case had left her financially wrecked, forcing her to use up her superannuation and borrow $20,000 from a friend.
Her legal bill had reached $300,000, and her lawyers placed a mortgage over another home she owned to secure their fees.
‘My lawyers insisted on putting a mortgage over an old house that I’ve had for over 25 years to guarantee their fees,’ she said.
She was recently advised to sell that home to pay a barrister but said: ‘That’s the only house I will have to live in.’
‘I have worked so hard all these years, and to have a bank come along and do this to me is absolutely disgraceful. it’s wrong and it’s only about profits.’
Maria claimed that despite repeated requests, ANZ had never provided a signed copy of the original mortgage.
She had not made any repayments since 2019, and the mortgage debt had grown to $800,000 due to accumulating interest.
The Norman Park home had increased in value to $1.8 million, but Maria feared that by the time all legal debts were paid, nothing would be left.
‘I have not been able to sell my house,’ she said.
‘If I would have sold it without worrying about letting them know about the mortgage, I would have been committing a crime but I haven’t done that.’
She alleged ANZ refused multiple requests for a settlement conference until her psychologist’s letter triggered mediation, which was scheduled for 30 April.
She described her daily state as overwhelming.
‘My head is spinning all the time,’ she said.
‘I don’t sleep much at night. I’m up at 2am, 3am or 4am, I’m waking up and I’m thinking about this.’
Her son, who had loaned her $70,000 for renovations and once held an interest on the property, was also drawn into the court proceedings before later being removed as a defendant.
He described ANZ’s handling of the situation as marked by ‘incompetence’ and ‘a lack of integrity’.
He claimed the bank had refused to engage in external dispute resolution through AFCA.
‘Literally the bank can bully people into court and refuse to use a mediation or conciliation service,’ he said.
‘ANZ has made an epic error in not securing the loan and allege fraud and misconduct and the judge stated that basically they were trying to staunch their wounds that were self-inflicted in an embarrassing way and were now out to get revenge.’
Greens MP Max Chandler-Mather wrote to ANZ over the ‘alleged misbehaviour’ and Maria’s ‘severe financial and emotional distress’, but received no reply.
An ANZ spokesperson said the bank was unable to comment on individual customer cases.
‘ANZ takes its responsibility to customers seriously and always seeks to act with integrity,’ the spokesperson said.
*Name has been changed.
In a previous story, we explored how a small error can lead to huge financial consequences.
This case involved a couple who saw their $325,000 windfall disappear due to a simple transfer mistake.
You can read the full story here to see how a minor typo caused a massive fallout.
After years of legal turmoil and financial strain, Maria’s story raises the question: How far should banks be held accountable for their mistakes? Share your thoughts in the comments below.
One Queensland woman found herself in precisely that position, only to be drawn into a years-long legal battle after doing what most would consider the right thing.
What unfolded has been described in court and by mental health experts as deeply troubling… and potentially abusive.
A Queensland woman who alerted her bank to a costly mortgage error said she had endured years of mental, financial and legal torment as a result.
Maria*, a 70-year-old investor, discovered in 2018 that both mortgages on her Norman Park property had been removed by ANZ due to what a judge later described as a bank error ‘for which [Maria] carries no blame’.
She had originally requested the release of only one mortgage when her $700,000 investment loan was converted to a home loan in 2017.
Bank error sparks years of legal and financial chaos. Image source: Lisa Maree Williams/Getty Images
The error only came to light more than a year later when she attempted to sell the property and realised the bank had deregistered both mortgages.
Upon notifying ANZ, the bank lodged a caveat on the property to flag its interest.
That caveat lapsed in March 2019 and for over a year, the matter remained untouched.
But the bank suddenly launched legal action in January 2021 after receiving a mysterious anonymous letter alleging Maria was about to sell the home.
ANZ proceeded without notifying her initially, citing urgency as the reason.
Maria said the ordeal had taken a devastating toll on her well-being and finances.
‘I haven’t been able to do anything for years because I’ve been trapped in this situation, and I think that the misbehaviour of the bank has been instrumental,’ she shared.
‘This is what they do to people who stand up to them or found out they made substantial errors–they just want people to give up or to go away or die.’
She also claimed the bank had accused her of attempting to commit fraud, despite her having informed them of their own mistake.
Medical professionals linked her deteriorating mental health to the ongoing pressure from ANZ.
A letter from her treating psychologist described the bank’s conduct as possibly ‘torturous to one’s physical and mental health’.
‘Beyond a certain point it might even be categorised as torturous to one’s physical and mental health,’ the psychologist wrote.
He added: ‘There is a fear that these proceedings are being “strung along” by my patient’s legal opponents as a tactic to deteriorate her mental health to such an extent that she, in effect, surrenders and agrees to an unjust compromise of the legal action.’The psychologist questioned whether the delays and legal tactics amounted to ‘a prolonged pattern of vexatious, callous, harmful treatment’.
Maria said the case had remained stagnant since 2022, leaving her in legal limbo and emotional distress.
Supreme Court Justice Glen Martin labelled parts of ANZ’s case as ‘bold and adventurous…but entirely misconceived’ and speculated they ‘may just be examples of a plaintiff wanting to get its retaliation in first’.
Maria claimed the current case was just one in a string of mistakes dating back to the original loan 17 years ago.
She said the bank had repeatedly registered mortgages to incorrect properties across four separate loans.
‘ANZ took a legal mortgage on a property when their loan documentation said something different and ANZ said it doesn’t matter what the street address is–it’s chaos,’ she said.
She also alleged the bank had taken eight years to release a mortgage after refinancing and approved the 2017 loan despite her failing the credit check.
The loan in question was offered under ANZ’s ‘breakfree’ package, which led to a $25 million fine in 2022 and compensation to nearly 700,000 customers over a 20-year period.
Maria received just 74 cents in remediation, which she described as insulting.
In 2019, she refused to sign a new mortgage without legal advice, citing distrust in the bank.
She said ANZ initially agreed to pay legal fees and told her to get a solicitor’s quote, which came to $10,000.
But the bank then allegedly backtracked and offered only $1000, denying it had ever promised to cover the full amount.
‘I didn’t know what to do, but I wouldn’t sign that,’ she said.
‘I was not going to sign that mortgage document without legal advice as I just don’t feel comfortable, and I left it at that.’
Maria said the court case had left her financially wrecked, forcing her to use up her superannuation and borrow $20,000 from a friend.
Her legal bill had reached $300,000, and her lawyers placed a mortgage over another home she owned to secure their fees.
‘My lawyers insisted on putting a mortgage over an old house that I’ve had for over 25 years to guarantee their fees,’ she said.
She was recently advised to sell that home to pay a barrister but said: ‘That’s the only house I will have to live in.’
‘I have worked so hard all these years, and to have a bank come along and do this to me is absolutely disgraceful. it’s wrong and it’s only about profits.’
Maria claimed that despite repeated requests, ANZ had never provided a signed copy of the original mortgage.
She had not made any repayments since 2019, and the mortgage debt had grown to $800,000 due to accumulating interest.
The Norman Park home had increased in value to $1.8 million, but Maria feared that by the time all legal debts were paid, nothing would be left.
‘I have not been able to sell my house,’ she said.
‘If I would have sold it without worrying about letting them know about the mortgage, I would have been committing a crime but I haven’t done that.’
She alleged ANZ refused multiple requests for a settlement conference until her psychologist’s letter triggered mediation, which was scheduled for 30 April.
She described her daily state as overwhelming.
‘My head is spinning all the time,’ she said.
‘I don’t sleep much at night. I’m up at 2am, 3am or 4am, I’m waking up and I’m thinking about this.’
Her son, who had loaned her $70,000 for renovations and once held an interest on the property, was also drawn into the court proceedings before later being removed as a defendant.
He described ANZ’s handling of the situation as marked by ‘incompetence’ and ‘a lack of integrity’.
He claimed the bank had refused to engage in external dispute resolution through AFCA.
‘Literally the bank can bully people into court and refuse to use a mediation or conciliation service,’ he said.
‘ANZ has made an epic error in not securing the loan and allege fraud and misconduct and the judge stated that basically they were trying to staunch their wounds that were self-inflicted in an embarrassing way and were now out to get revenge.’
Greens MP Max Chandler-Mather wrote to ANZ over the ‘alleged misbehaviour’ and Maria’s ‘severe financial and emotional distress’, but received no reply.
An ANZ spokesperson said the bank was unable to comment on individual customer cases.
‘ANZ takes its responsibility to customers seriously and always seeks to act with integrity,’ the spokesperson said.
*Name has been changed.
In a previous story, we explored how a small error can lead to huge financial consequences.
This case involved a couple who saw their $325,000 windfall disappear due to a simple transfer mistake.
You can read the full story here to see how a minor typo caused a massive fallout.
After years of legal turmoil and financial strain, Maria’s story raises the question: How far should banks be held accountable for their mistakes? Share your thoughts in the comments below.
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