Chattel mortgage dispute? How to complain to your lender, fix a wrong payout or a stale PPSR registration, and when AFCA can hear your complaint.
Business Owners Hub
Chattel Mortgage Disputes · Lender Complaints · AFCA
A wrong payout figure, interest charged after you paid out, a security registration that never came off, or a repossession that went too far. Here is how to tell which conduct is worth disputing, how to complain so the lender has to answer, and when the dispute can go further.
Quick Answer
Complain to the lender in writing first, keep the reference number, and take the dispute further only once the lender's internal process has given a final response or run out of time. The order is: name the problem and the outcome you want, attach the payout figure or contract evidence, wait for the final response, then lodge with AFCA if the lender is a member and your business is eligible. For the product itself, see our chattel mortgage page.
Also called: equipment finance complaint, asset finance dispute. All three describe the same thing: a disagreement with the lender on a loan secured over a vehicle, truck or machine.
How do you complain to a chattel mortgage lender?
You complain to a chattel mortgage lender by writing to its complaints team, saying exactly what went wrong and what outcome you want, and asking for a reference number. A phone call to the collections line or your account manager is not a complaint until it is logged as one, so put the dispute in writing and keep the reference number.
The lender's internal dispute process comes first. External bodies generally will not look at a dispute until the lender has had a fair chance to fix it, and most lenders publish a complaints contact on their website, in the contract and on any notice they send you. Use that contact, not a general enquiries inbox.
- Find the right contact. Look for "complaints" or "internal dispute resolution" on the lender's site or in your contract documents.
- State the problem in one paragraph. Contract number, the asset, what happened, the dates and the dollar amount in dispute.
- Say what you want. A corrected figure, a refund, a fee reversed, the security registration removed, or an explanation in writing.
- Attach the evidence. The payout letter, statements, the default notice, emails, photos, and the clause you rely on.
- Diary the response date. Expect a final response, typically within 30 days for most complaints, with some complaint types on a shorter clock.
The complaints that resolve fastest name the clause and the dollar amount in the first paragraph. A complaint that only says the lender was unfair gives the complaints officer nothing to check, and it goes to the bottom of the pile.
Put it in writing: include
- Contract number and borrower name exactly as on the contract
- The dates of each event, in order
- The amount you say is wrong and how you worked it out
- The outcome you are asking for
- Copies of the documents you rely on
What weakens a complaint
- Only raising it by phone with no record
- No figure, no date and no clause
- Mixing five grievances into one email
- Stopping repayments to force a response
- Going quiet once the final response arrives
Which lender conduct is worth disputing?
Lender conduct worth disputing is anything that departs from your contract or from fair process: fees the contract does not allow, figures that do not add up, notices that were never sent, and enforcement that goes past what the contract and the law permit. The test is conduct, not just the contract. A lender can follow the wording of a clause and still handle the account badly.
Plenty of things that feel unfair are normal practice, though. A break cost on a fixed rate contract, a default fee after a missed payment, or a payout figure that includes the interest to the valid-to date are usually allowed. The table separates the two. If you are unsure what your own contract allows, our breakdown of chattel mortgage contract clauses shows where each of these terms sits.
| Where it shows up | Green flag: normal practice | Red flag: worth disputing |
|---|---|---|
| Payout figure | Itemised, dated, valid to a stated day, and showing any early termination amount the contract allows | A single unexplained total, fees the contract does not mention, or a figure that changes with no reason given |
| Interest after payout | Daily interest only for the days between the valid-to date and the day cleared funds arrive | Interest charged after cleared funds arrived, or an overpayment that is never refunded |
| PPSR registration | Removed promptly once the loan is paid out in full | Still on the register weeks later, blocking a sale or new finance against the asset |
| Arrears and default | Written notice of the arrears and the default as the contract requires, with time to fix it | Default declared, the loan called up or fees added with none of the notice the contract requires |
| Repossession | Agent identifies themselves, follows the contract, and the lender gives any notice the contract requires before the asset is sold | Threats, entering locked premises without permission, or a sale without the notice your contract requires |
| Hardship request | Acknowledged and answered in writing, with a reason if it is declined | No response at all, or collection action that carries on as if the request was never made |
| Broker conduct | Fees and commission disclosed up front and the recommendation explained | Undisclosed fees, a product that does not match what you asked for, or application details you never gave |
A hardship request that goes unanswered is its own dispute. The process for asking, and what a lender typically offers, is covered in our post on missed chattel mortgage repayments and repossession.
What if the payout figure is wrong or interest is charged after payout?
If the payout figure is wrong, ask the lender for a fully itemised figure and a written explanation of every line, then dispute any amount your contract does not support. Most errors sit in a handful of places: fees that were already paid, an early termination amount calculated on the wrong basis, or arrears that were caught up but never cleared from the account.
How the figure is built is explained in what a payout figure is in asset finance, and the line-by-line checks are in the payout figure mistakes checklist. Use those to find the error, then use this post to dispute it.
Interest after payout is a question for the payout letter. The letter should state the day the figure is valid to and the daily interest that applies after it. The lender is entitled to interest until cleared funds land, not until the day you pressed send, so a figure valid to Friday that is paid on Monday will usually carry a few days more. What it cannot do is keep charging once the funds have cleared, or keep a surplus when you paid more than was owed.
Can you still dispute a payout figure you have already paid?
You can still dispute a payout figure after paying it, and paying is often the only way to get the asset released for a sale or a refinance. Say in writing at the time that you are paying the amount under protest and that you dispute the specific items, then lodge the complaint straight away so the dates line up.
What if the PPSR registration is not removed after you pay out?
If the PPSR registration is not removed after you pay out, ask the lender in writing to remove it, and if it still does not act, use the formal amendment demand process under the Personal Property Securities Act. A lender that has been paid in full has no business keeping its interest on the register.
A PPSR registration that outlives the loan causes real damage. A buyer who runs a PPSR search sees a security interest and walks away, and a new lender will not settle against an asset that already shows someone else's security. The usual result is a sale or a refinance stalled for days while everyone waits on a release that should have happened at payout.
- Search the register. Note the registration number and the secured party shown against the serial number.
- Write to the lender. Quote the contract, the payout date, the amount paid and the registration number, and ask for removal.
- Lodge an amendment demand. If the lender does not act, the PPSR has a formal demand process that requires the secured party to respond.
- Ask the Registrar. If the secured party still does not act within the time the Act allows, the Registrar can be asked to amend or remove the registration.
Running a search yourself is covered in our guide to PPSR checks for asset and vehicle finance.
What counts as poor repossession conduct?
Poor repossession conduct is anything outside what your contract and the law permit, such as taking the asset without the notice the contract requires, threats or intimidation, entering locked premises without permission, or selling the asset without the notice and accounting your contract or the law requires. A lender can be entitled to repossess and still go about it the wrong way.
Once the asset is taken, the lender's duties do not always end. The Personal Property Securities Act sets enforcement steps such as notice before sale, but business finance contracts often switch some of them off under the Act's contracting-out provision, so read your contract's enforcement clauses before assuming they apply. Ask in writing for an account of what the asset sold for, the costs taken out, and how any shortfall was calculated.
In our own files, the sharper dispute is usually about the sale rather than the pick-up: a machine sold quickly at auction for well under what it was worth, leaving the business with a shortfall it did not see coming. If the sale price is the issue, the arguments are similar to those in truck valuation disputes. The steps leading up to repossession, and how to stop it early, are in the missed repayments post.
Can AFCA hear a small business chattel mortgage complaint?
AFCA can hear many small business chattel mortgage complaints, provided the lender is an AFCA member, your business and the loan fall within its small business limits, and the lender's internal dispute process has run first. The service is free for the business making the complaint.
The Australian Financial Complaints Authority's small business page explains how it handles business complaints. The detail on who qualifies, the limits and how AFCA sits alongside the industry codes is in our business loan protections guide, so check there before you lodge.
Two practical points. AFCA applies time limits, so do not sit on a final response you disagree with. And if the lender is not a member, AFCA cannot help, which leaves the lender's own process, a court or tribunal claim, and the support the Australian Small Business and Family Enterprise Ombudsman offers small businesses in a finance dispute.
How do you complain about a finance broker?
You complain about a finance broker the same way you complain about a lender: in writing to the broker first, then to the business the broker operates under if that is separate, and then to AFCA if the broker is a member and the dispute is not resolved. Most brokers who arrange credit are required to belong to AFCA and to have an internal complaints process of their own.
Broker complaints usually involve fees that were not disclosed, a product that did not match what you asked for, or details on the application that you never supplied. Ask for the file: the quote, the credit guide, any fee disclosure and the application as lodged. A broker's industry association can also take a complaint about a member's conduct.
Keep the two problems apart. A broker cannot change a lender's payout figure or remove a lender's security registration, but a good one can often get a stalled release or a disputed figure moving faster than a cold complaint can. If you are weighing finance on a new asset and want the terms explained before you sign, our chattel mortgage guide covers how the product works, and the Business Owners Hub links the rest of our business finance reading.
Most chattel mortgage disputes come down to a figure, a notice or a registration. Put the dispute in writing, name the clause and the amount, and keep the reference number. The lender's internal process comes first and should give a final response within its stated timeframe. If that does not fix it, AFCA can hear many small business complaints for free, provided the lender is a member and your business fits its limits.
Key takeaway: write the complaint with the contract number, the dollar amount and the outcome you want, and diary the date the final response is due.Frequently Asked Questions
Complaining to AFCA is often worth it for a small business with a chattel mortgage dispute, because the service is free to use, independent of the lender, and can make a decision that binds the lender if you accept it. It works best when you already hold the lender's final response and a clear written record of what went wrong. Very large or complex disputes, or ones outside AFCA's limits, may suit a solicitor better, and the business loan protections guide sets out where those limits sit.
To file a complaint against a finance company, write to its complaints team first with your contract number, what went wrong, the dates and the outcome you want, and ask for a reference number. If the final response does not fix it, or no response arrives in time, lodge the complaint with AFCA online and quote that reference. If the dispute is about a payout amount, the payout figure mistakes checklist helps you name the exact error.
AFCA can consider complaints from eligible small businesses about credit provided by its member firms, and that includes chattel mortgages and other equipment finance. Typical examples are incorrect fees or interest, payout disputes, poor service, and how a lender handled arrears, default or a hardship request. The eligibility tests and limits are set out in the business loan protections guide, which is the place to check before you lodge.
A lender typically has 30 days to give a final response to most complaints, with shorter timeframes for some complaint types. If the lender cannot finish in time, it should tell you why and that you can take the complaint to AFCA. Keep the reference number and the date you lodged, and check the notice and dispute clauses in your contract so you know what the lender has promised; our contract clauses breakdown shows where they sit.
If your equipment finance lender is not an AFCA member, AFCA cannot hear the complaint, so the path is the lender's own complaints process and then, if needed, a court or tribunal claim. The Australian Small Business and Family Enterprise Ombudsman can also help small businesses work through a dispute with a supplier of finance. A solicitor can tell you which forum fits the amount and the issue, and the business loan protections guide covers the other protections that may still apply.
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