BFCSA Blog

Led by award-winning consumer advocate Denise Brailey, BFCSA (Inc) are a group of people who are concerned about the appalling growth of Loan Fraud around the world. BFCSA (Inc) is a not for profit organisation in the spirit of global community concern and justice.

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Melbourne and Gold Coast house and land projects suffer in Ausin China collapse Australian Financial Review Aug 17 2018 11:45 PM Su-Lin Tan   House and land projects in Melbourne and south-east Queensland are allegedly some of the projects where settlements are lost, following the collapse of residential project marketer and sales agency Ausin's Chinese offices on Thursday. Melbourne house and land projects, Elpis by developer Bridgefield Estate and Williams Landing by Cedar Woods, are in the growing western corridor, while Willow Pimpama Village project lies in the booming south-east Queensland region near the Gold Coast. Construction company Oliver-Wolfe Homes might also be a victim of the fallout in China, Ausin Group director Joseph Zaja confirmed. Mr Zaja is a director of the company. While Mr Zaja said Oliver-Wolfe Homes was still operating, the website of that organisation was defunct and an ASIC notice on August 10 showed the company's NSW...
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Kelly O’Dwyer blasts banks on rorts The Australian 12:00am August 18, 2018 Ben Butler, Michael Roddan   Financial Services Minister Kelly O’Dwyer has blasted the banks over the “disgraceful” rorts and rip-offs of the nation’s super­annuation nest egg, and criticised the sector for opposing proposed laws that would lead to dishonest executives being sent to jail for up to four years. “The behaviour of some of the superannuation sector revealed during the hearings of the royal commission is disgraceful,” Ms O’Dwyer said last night. “Without doubt the most egregious misconduct identified by the commission in the past fortnight has been in the for-profit and bank-owned sector of the superannuation industry, where hundreds of millions of dollars have been wiped from the retirement savings of hardworking Australians who have received seemingly nothing in return.” Ms O’Dwyer’s intervention against the big banks came as it emerged the corporate regulator was poised to refer...
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Banking royal commission: Call for more scrutiny of CBA's takeover of Bankwest Australian Financial Review Aug 17 2018 4:55 PM Tom McIlroy   NSW Liberal Julian Leeser has called for the Hayne Royal Commission to hold more public hearings to scrutinise Commonwealth Bank's takeover of Bankwest. The Berowra MP told Parliament cross-examination was needed to consider CBA's revaluing of Bankwest's commercial loan book. He called on CBA executives to support calls for additional hearings. "The central allegation of the Bankwest victims is that the Commonwealth Bank... acted in a way that might entitle the victims to the right to equitable relief for unconscionable conduct," he said. "I don't carry a brief for the victims. I'm equally happy for either the victims or the banks to have their cases disproven and for them to be embarrassed in a full public hearing. "For years, the victims and advocates... have been walking these corridors...
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ASIC investigates IOOF Australian Financial Review Aug 17 2018 4:39 PM Patrick Durkin   The corporate regulator has revealed it is investigating IOOF and will embed agents into the wealth giant as it extends a controversial plan to put staff inside the banks and comes under fire for inaction. In a feisty five hour-plus grilling by  Parliament's oversight committee, Labor members complained the Australian Securities and Investments Commission is more "puppy" than "watchdog" and "CEOs don't stay up at night worrying about enforceable undertakings". ASIC chairman James Shipton's honeymoon ended abruptly as the regulator was criticised for dropping an investigation into insider trading at IOOF but ASIC Commissioner Cathy Armour countered by revealing it was "not the only piece of work we are doing" as part of an investigation into IOOF. ASIC, APRA drop ball on super The alarming gap between regulators in supervising super trustees exploded across opposite sides of...
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NAB scandal heading to court The Australian 12:00am August 18, 2018 Michael Roddan, Ben Butler   The corporate watchdog is poised to hand its criminal investigation of National Australia Bank to the Commonwealth Director of Public Prosecutions to pursue action against the bank over its wholesale charging of fees for no service and subsequent alleged cover-up. The Australian Securities & Investments Commission is also well advanced in its talks with the DPP over its investigation of scandal-hit wealth manager AMP, which misled the regulator 20 times over its fees-for-no-service scandal, The Weekend Australian can ­reveal. The revelations came after the big banks endured a brutal fortnight of hearings at the financial services royal commission that uncovered rampant gouging, systemic misconduct and thousands of breaches of the law in Australia’s $2.6 trillion superannuation sector. While executives at some of Australia’s largest banks, including NAB, Commonwealth Bank, ANZ and wealth managers AMP and...
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Banking royal commission: Hayne shows APRA is no tough cop Australian Financial ReviewAug 17 2018 11:02 PM James Thomson   ANALYSIS  It's a fair bet there's no cell in the headquarters of the Australian Prudential Regulation Authority, where superannuation trustees who have lost their members' retirement savings are taken. What would be the point? "We've got you now buster, and we're going to get tough," the APRA heavy would tell the trustee. "We're going to write some pretty nasty letters, get a damn good understanding of this issue, do some close supervision and then tell the public – let alone the fund members – absolutely nothing." The appearance of APRA deputy chairwoman Helen Rowell in the witness box of the royal commission on Friday – the final day of hearings in this round on superannuation – did nothing to make the regulator look like a tough cop on the beat. Instead,...
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Banking royal commission: APRA evidence reveals failure to act The Australian 1:27pm August 17, 2018 Anthony Klan   Kicking off royal commission hearings into superannuation, counsel assisting Michael Hodge asked: “What happens when we leave these trustees alone in the dark with our money?” He might as well have said alone in the dark with the Australian Prudential Regulatory Authority, the banking regulator. APRA deputy chair Helen Rowell — chairman Wayne Byres rarely faces the public in any manner — took the royal commission stand today. Her appearance allowed the public a glimpse of the contortions the regulator habitually pulls to explain why the bodies it is supposed to regulate should not face any penalties, or any real repercussions, when they do break the law. The case of tens of thousands of people being overcharged up to $1 billion in “fees for no service” — that is money was taken by...
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Former APRA senior analyst blows whistle on superannuation regulator The Australian, July 25, 2018 Anthony Klan   The nation’s superannuation regulator has actively worked against market transparency, prevented competition and facilitated widespread gouging in the $2.6 trillion sector, one of the regulator’s former senior ­analysts has told the Productivity Commission. In a submission, Wilson Sy, of Investment Analytics Research, also attacked the Productivity Commission’s recent draft report into super as having failed to address key issues such as the widespread gouging by “retail”, or not-for-profit, funds, saying it was distracted by “periphery issues”. Dr Sy, a principal researcher at the Australian Prudential Regulation Authority from 2004 to 2010, said many trustee directors of retail funds had “broken the fiduciary law” by failing to act in the best interests of members, as required under the law. “Instead of enforcing the fiduciary law, APRA has sought to change the law, thus facilitating looting...
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Banking royal commission legal team earn their nicknames The Australian August 1, 2018 Will Glasgow and Christine Lacy   Time is running out for Kenneth Hayne’s legal assistants to earn their nicknames and inflate their future barrister fees in the banking royal commission. That’s a worrying thought for those financial executives soon to face off with them in the ­commission’s superannuation round, which starts on Monday, and the subsequent insurance showdown in September. Not surprisingly, the financial giants have been discussing the form of the commission’s legal team. As the Hayne Show moves into its final acts they want to know, who has the most to prove? Rowena “Shock And” Orr earned her nickname way back in round one, the commercial lending practice hearing. In doing so, she has probably doubled the daily rate she will soon charge commercial clients when the commission is disbanded. Also soon to benefit from his...
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ASIC bows to banks on code of practice, $3m limit approved Australian Financial Review July 31 2018 James Eyers   The banks have had a significant win after convincing the corporate regulator to approve its revised Banking Code of Practice, which will apply to small businesses who borrow up to $3 million. This is lower than the $5 million level originally recommended by the small business ombudsman and the banks' own independent expert. The new code, which has been a key focus during the Hayne royal commission, "represents a stronger commitment to ethical behaviour, responsible lending, greater financial protection and increased transparency," said Australian Banking Association chief Anna Bligh. ASIC had considered a $5 million level of borrowing as the definition of small business but it appears chairman James Shipton has been convinced the $3 million level desired by the banks will protect enough businesses. ASIC said the $3 million level...
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Compensation bill of $850m looms for gouging The Australian August 8, 2018 Michael Roddan Reporter Ben Butler Business Reporter   The compensation that the banks are preparing to pay for fees they charged customers for services never provided is racing towards $1 billion, as the financial services royal commission yesterday exposed new details of fee gouging. The corporate regulator has revealed the total payout to customers of AMP, Commonwealth Bank, ANZ, National Australia Bank, Westpac and other large financial institutions could quadruple to $850 million from the more than $200m already paid to customers caught up in the “fees for no service” scandal. News of the soaring bill came as the royal commission heard evidence that NAB misled the Australian Securities & Investments Commission over its fee scandal and details of how its bid to play down the problem was taken all the way to chief executive Andrew Thorburn. The commission also...
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Housing credit crunch feared as RBA keeps rates on hold The Australian August 8, 2018 Adam Creighton Economics Editor   Scott Morrison says the economy faces an “own goal” if the financial services royal commission causes a credit crunch, with his warning coming as the Reserve Bank governor highlighted “changed ­dynamics” in the ­increasingly fragile housing market. The Treasurer said he was ­relaxed about house prices, which are falling in Sydney and Melbourne at an annualised pace of about 5 to 10 per cent, but urged vigilance to avoid a sharp drop in home loan growth. “We must be very careful to avoid that. We are being very careful about that in terms of how we handle the regulatory ­response,” he said at a business lunch in Melbourne yesterday. “There are concerns that the wrong response to what we’re seeing in our banking or financial system could further constrain credit, or...
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The damning letter that caught NAB out in fee-for-no-service rort The Australian August 8, 2018 Ben Butler Business Reporter Michael Roddan  Reporter   National Australia Bank misled the corporate regulator about the nature of a fee scandal for which it has paid $35m in compensation, the banking royal commission has heard. Counsel assisting the commission, Michael Hodge QC, extracted the admission from Nicole Smith, the former chairman of NAB’s superannuation trustee company NULIS, near the end of a long day of evidence from company executives yesterday. But the revelation was only made possible because commissioner Kenneth Hayne threw out a bid by the bank’s top-tier legal counsel, Neil Young, QC, to keep secret its correspondence with the Australian Securities & Investments Commission. The royal commission is two days into a fortnight of hearings probing misconduct in the $2.6 trillion superannuation industry, kicking off proceedings with a deep dive into NAB and...
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ASIC chairman James Shipton: My plan to embed ASIC agents in the banks Australian Financial Reiveiw Aug 7 2018 Patrick Durkin     Australian Securities and Investments Commission chairman James Shipton plans to embed teams of up to 20 agents for weeks at a time to sit with bank staff, drop into meetings and trail the CEO, executives and directors to identify misconduct before it arises. Mr Shipton, who experienced the idea first-hand working at Goldman Sachs in Hong Kong, is being backed by $70.1 million in additional funding from Treasurer Scott Morrison, who denied the regulators would be "spying" on the banks, but "getting in there and being part of the community, which they are regulating". Mr Morrison told The Australian Financial Review that he was "open" to extending the radical idea to other companies with plans already afoot to extend the Banking Executive Accountability Regime to energy, utility and telecommunications...
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Time to haul bank CEOs before Kenneth Hayne’s royal commission The Australian August 14, 2018 James Kirby Wealth Editor   Where are the bank CEOs at the royal commission? It’s time to bring them in. Day after day Justice Kenneth Hayne and his team quiz senior bank executives and without fail they raise the defence that key issues are outside their responsibility. So bring in the CEOs and that defence is no longer appropriate. Indeed Andrew Thorburn, the NAB chief executive, must surely be called first. The superannuation segment of the inquiry now in its second week has devoted almost four of its seven days to executives from NAB, most recently when the bank’s head of wealth, Andrew Hagger, spent hours being interrogated over dealings with ASIC. It was Hagger’s second appearance before the commission. With executives entering the ring for a second time the absence of the top brass becomes...
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CBA’s crimes waved through by APRA The Australian August 15, 2018 Ben Butler, Michael Roddan   Commonwealth Bank’s wealth management arm, Colonial First State, committed more than 15,000 criminal offences by failing to move super customers from a high-fee fund to low-fee accounts, the financial services royal commission has heard. However, the regulator responsible for super funds — APRA — did not prosecute the offences, which would today carry a total maximum fine of about $160 million, and instead approved a plan to gradually move the accounts that saw Colonial flout the criminal law for another 3½ years. This enabled financial planners to continue trousering lucrative trailing commissions, worth millions of dollars a year, that they would otherwise have lost. Giving evidence to the commission yesterday, Colonial executive general manager Linda Elkins admitted the bank broke the law by failing to move the accounts. Colonial also misled customers at least three...
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Banking royal commission exposes secret fees you're paying on super Australian Financial Review Aug 14 2018 Karen Maley   It's hard to think of a subject with less intrinsic sex appeal than the administration fees charged by super funds. Even those admirable souls who possess sufficient self-discipline to monitor their super savings accounts tend to focus their attention on investment performance, rather than attempting the dreary task of trying to work out what fees they're being slugged with. This universal lack of interest probably explains why this murky and neglected realm has provided such rich pickings for the Hayne royal commission. On Monday and Tuesday, Suncorp's super fund fee arrangements came under close scrutiny. The trustee of the Suncorp Master Trust, Suncorp Portfolio Services, collects 15 per cent of super contributions, which it remits to the Tax Office. But the trustee is also entitled to claim certain tax deductions because of...
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Malcolm Turnbull in bid to quash NEG rebellion The Australian 12:00am August 17, 2018 Simon Benson, Joe Kelly   Malcolm Turnbull will try to head off the potential resignation of several ministers over the national ­energy guarantee with a promise to rebel MPs that the three big ­energy companies will be targeted for market manipulation and ­deliberately inflating power prices through secret contracts. However, senior ministers have told The Australian this would not be enough to prevent Coalition MPs crossing the floor if the 26 per cent Paris emissions reduction target was not dumped or “decoupled” from the NEG. The move to cauterise the growing threat of internal revolt came as the Prime Minister’s most senior conservative minister, Peter Dutton, suggested there could be a time when he resigned from cabinet over policy - which would trigger a leadership crisis. As the internal crisis deepens for Mr Turnbull, The Australian has...
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CBA still in denial as fraudsters sentenced to a decade in jail The Age 16 August 2018 11:45pm Cameron Houston & Chris Vedelago   EXCLUSIVE  The Commonwealth Bank has spent seven years denying and covering up the role of its staff in a $76 million loan fraud that has left unwitting customers homeless. The bank still has not compensated up to a dozen victims after its loan managers helped professional poker player Bill Jordanou and accountant Robert Zaia set up loans in customers' names using fake documents. The pair then blew millions of dollars on gambling junkets to Las Vegas and Macau, gaudy jewellery, luxury cars, jet skis and a speed boat called "Bad Boys". More than $58 million in dodgy loans were approved by the CBA between 2004 and 2011, in what was described by County Court Judge Paul Lacava as one of the "largest frauds to appear before a...
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AMP gouged $26m out of superannuation savers The Australian 12:00am August 17, 2018 Elizabeth Redman, Michael Roddan   AMP has admitted to gouging superannuation savers $26 million in fees they should not have paid over the past four years, in fresh revelations at the financial services royal commission. But the super trustee charged with looking after members’ best interests did not realise there was a problem until about May this year when it was told by another arm of the AMP conglomerate. The royal commission yesterday probed the sky-high fees paid by savers who have their nest eggs managed by AMP’s super funds, and revealed some investors who held their assets in safe cash instruments were charged fees that gobbled up their entire returns — a problem compounded by the fact AMP did not allow its trustee to control costs its members faced. It emerged that some investors in their fund’s...
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