"I just cry." Why are big banks giving loans that women can't pay?

Samantha's voice shakes with emotion.

"It's hard. It's really hard," she tells Mamamia, tearfully. "One minute you think you've got it together... and then you don't." 

The Sydney mum is talking about the terrible distress and suffering that comes from being in a financially untenable situation. When she was eight months pregnant with her only child, she and her husband took out a home loan from a major bank. Samantha was hesitant, given she was so far into her pregnancy and would not be working for quite some time - they would be wholly reliant on her husband's income.

"I'm not an idiot when it comes to finances. At the time of taking the loan, I did say to them, 'Is it OK that I'm not going to be earning any income?' They said, 'Oh no! You'll go back to work and it'll all be fine.' I thought, Hang on a minute, 'I didn't make that decision, you're making that decision.' And lo and behold, I didn't end up going back to work. And we hit problems," she says.

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The couple also had to close off all their other credit cards in order to be approved for the loan - only for the bank to provide them another credit card with an $8,000 limit. Samantha now understands that it was likely a way make them even more financially dependent on the bank.

"Now we had a credit card that is attached [to the loan] that we didn't ask for and it was very frustrating," Samantha says. "We questioned them about it at the time and they said, Oh, it's just part of the package. And I was like, OK, but that's not what we asked for. Why did I have to close all my other ones off? That makes no sense. It's just a nightmare."

When Samantha and her husband weren't able to keep up with repayments, they asked the bank for help "multiple times".

"The only thing they assisted with was they closed the credit card account," she says. "They did a deal and wiped half of [the credit card debt] and then left half as no interest. We had to pay it off in a certain amount of time, I think it was 12 months, and it was maybe two grand or something. That's the only assistance they've ever given."

Samantha lodged a complaint with the Australian Financial Complaints Authority (AFCA) but explains it was a hard, long, and drawn-out process that ultimately yielded nothing. And she can't re-finance with another bank or financial institution due to the "black mark" against the loan.

"I'm stuck with [the bank] unfortunately. They don't want to do anything to help," she says. "And the issue is that the home loan is so far beyond... It's unachievable in any instance."

The stress has been so acute that it has caused problems in Samantha's marriage. She and her husband are currently separated, which has only exacerbated the distress.

"There is no assistance. A woman's got to carry the family. They've got to carry the kids. On top of everything, the banks are not doing the right thing," Samantha says. "You're taught from so young to trust them. So you do automatically because that's what you're taught to do. But then they aren't trustworthy. They'll tell you anything.

"You could ring the bank and ask the same question to different people and get a different answer every single time for the simplest of things, which frustrates me immensely. And then, of course, no one's ever heard of that person that told you that same thing yesterday - they just make you think you're crazy. The more they get, the more they get paid. They don't really care about your situation. They just care about how much they make."

New data has found that women are falling victim to irresponsible lending from financial institutions, with banks pushing them into financial hardship when they never should have been lent the money in the first place.

The data from GetMyRefund Australia found that more than 65 per cent of people who claimed irresponsible lending from them in the last year were female. The organisation found this was primarily due to single mothers getting over-committed, lack of financial knowledge because someone else always handled their finances - like partners and spouses - or just a general lack of understanding of their finances.

"Big banks are knowingly lending money to people and ignoring the variables for their ability to pay it back - often sending people on a slippery slope to financial hardship and ripping them off," GetMyRefund Australia CEO Carly Woods tells Mamamia.

"There are too many grey areas, and banks are preying on many females' lack of financial education and being too trustworthy. We are consistently hearing of people that were having to choose to pay their loan before other bills including heating or proper food for their children."

The average irresponsible lending claim the organisation handles results in a refund of $14,200, a 41 per cent increase from only three years earlier. This is on the amounts that have been loaned by banks and other non-bank lenders to people who have no proven ability to repay the loan or have been loaned money on the basis of incorrect and unverified information.

"Irresponsible lending is pushing many vulnerable women into even deeper financial hardship, at a time when cost of living increases are becoming almost unbearable for a large cohort of people," Woods says.

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It also comes as new legislation is being looked at to see AFCA run their own independent reviews into our growing irresponsible lending crisis, which usually is not favoured towards the consumers who lose out. Woods says the move will see vulnerable consumers, particularly women, set to lose hundreds of thousands as the government authority "always sides with the banks".

"We find that many of the people who come to us for irresponsible lending claims feel foolish for having taken on too much debt, but this simply isn't the case. These people were loaned money they could not afford to repay, and it was deeply unfair of the lender to give them this money," she says.

That's what happened to Brisbane mum Julie, who is on a disability pension, and her son Daniel, who also has disabilities. After taking out a car loan, Julie realised there were "all those hidden funds and stuff" in the paperwork. But by then, it was too late.

Yet, for Julie, the real heartache comes from how her son was "manipulated" into getting a car loan of his own. Daniel, who has intellectual disabilities, moved away to WA with his pregnant wife seven years ago. He was in a job, on a trial basis, for less than three months before deciding he needed a new car.

"He thought he could get a car loan. So he trots up to a brand new car place, says, 'I like that car, I want to go for it.' So [the car salespeople] do what they do. They fill out all the paperwork. But once you read the paperwork, it's all wrong," Julie explains. 

"They lied on the application form. The form says that Daniel worked prior, which is wrong. They said he's got all this money and cash and assets and all this sort of stuff. There's no mention whatsoever that he'd been on disability pension. They would have known, speaking to him, that he wasn't 100 per cent there, that there were issues. He can't even spell his own name, so come on.

"When they said to him, 'Do you understand before you sign?' Daniel would just have believed what they were telling him. And he would have said, 'Yeah, okay.' And he just signed away. At the end of the day, it is totally irresponsible lending."

The car loan - to the tune of $60,000 - was, of course, approved. To make matters worse, Daniel lost his job shortly after and went back on a disability pension. The pressure has also affected Julie because she is helping pay off Daniel's loan.

"At the end of the day, I'm not saying Daniel doesn't have to pay for the car. We will pay for the car. We're not asking for that. I'm asking them for some leeway," Julie says. "If they turned around said to me, 'If you can pay the car out, we'll wipe the interest...' I mean, I can't come up with 40 grand to pay the car out. But if I could, why can't you wipe the interest on the loan that you shouldn't have given him in the first place? And just let him repay the car back?

"They have made a mistake. And yes, it was a car salesman. But then it was up to the finance company, who's gone and approved, to actually check to make sure this was all correct."

GetMyRefund Australia is trying to help both Julie and Samantha with their loans by filing irresponsible lending claims on their behalf and having some money credited back to the loan, in order to reduce the debt. Already, Julie has been able to get back nearly $7,000 on her car loan.

And Woods has some advice to avoid getting tripped up.

"Always ask what the interest, total fees and breakdown of costs and charges if paying off early. Ask for a copy of everything you put your signature on - don't be afraid to question what something means," she says.

"And take your time to read the terms and conditions. Ask for extra time if you require and even ask a second opinion. The skill to blind sight you is in the speed. Slow the process down."

Like Samantha, the emotional stress on Julie and her family has been immense.

"I just cry. I just absolutely break and cry because we're trying to support him to pay his car loan. And he doesn't really comprehend it. I'm like, 'Just give back the car, you can't afford it, take it back and say see you later and walk away.' I told him it's going to stuff you up. But what can you do? He doesn't get that," Julie says.

"And then I'm like, Well, hang on. Even if you send it back, you're still gonna end up with a debt more than likely. It's not fair. They should never have given him that loan. I'm his voice. I need to speak for him."

Feature Image: Getty.

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