Banks are continuing to raise people's credit card limits beyond what they can afford, says Banking Ombudsman Liz Brown.
Brown said her office continued to receive complaints "very often" from people saying a family member had been allowed more credit than was appropriate.
One case involved an elderlyman who incurred large credit card debts with two banks.
Mr D died a few months after his debts escalated to more than $40,000 and a reverse mortgage had been arranged over their house to repay them.
Mr D's daughter complained to the Ombudsman about the amounts her father was allowed to borrow given his income, which was limited to National Superannuation. She was sure the stress had hastened his death.
After the Ombudsman got involved, the banks offered settlements which allowed Mr D's widow to repay about half what was owed.
Brown said there had also been cases where communication breakdown left clients on the back foot.
One client, Ms F, had been left with physical and some cognitive disabilities after being hit by a drunk driver.
During her rehabilitation, she took out a home loan and early on her relationship with bank staff was good.
But arrangements to buy a special disability aid fell through and after a staff member left, Ms F heard nothing about her application to restructure her loan.
After buying the aid, she fell behind in her loan repayments, eventually falling $9000 into arrears, which cost her another chance for loan restructuring.
After further demands and a mistake by the bank, Ms F approached a family member for a loan. She later refinanced with another bank and complained to the Banking Ombudsman, who secured an apology and offer of compensation.
"The bank was very concerned to resolve the problem once it knew the full story so what we were doing there [was] helping the bank and the customer to reach an agreed settlement, rather than ... investigate and make a determination first.
"We're doing that more. I think it's more effective ... because if we can get a resolution, it takes a lot of the stress and time out of the process."
