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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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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NAB’s board met ASIC days before the Hayne horror unfolded The Australian 12:00am August 17, 2018 Pamela Williams   A top level meeting between ­National Australia Bank directors led by chairman Ken Henry and Australian Securities & Investments Commission officers led by new chairman James Shipton was held in Sydney a week before NAB resumed giving explosive evidence before the royal commission into banking and superannuation misconduct. The meeting was held at NAB’s George Street, Sydney, headquarters on July 30. It included NAB chief executive Andrew Thorburn, chief risk officer David Gall and chief legal counsel Sharon Cook. On the ASIC side, Shipton brought his two deputy chairmen — Peter Kell, who has had oversight of ASIC’s investigations into the financial industry’s fees for no service scandals, and Daniel Crennan QC, who joined recently to add enforcement heft — commissioners John Price, Cathie ­Armour, and ASIC executive ­Michael Sadaat. For Thorburn...
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ANZ raked in billions pushing super through branches Australian Financial Review Aug 16 2018 4:40 PM James Frost   ANZ raked in more than $3 billion pushing a superannuation product through its branches under the pretext of general advice before ASIC stepped in, the Hayne royal commission has heard. The bank created the Smart Choice Super and Pension product with the aim of distributing it through branches where tellers could upsell customers to the bank-owned superannuation product. Counsel assisting Mr Michael Hodge QC took ANZ's head of superannuation Mark Pankhurst through the process through which the product was sold and led the bank to enter into an enforceable undertaking with ASIC in June and make a $1.25 million 'community benefit payment'. Mr Hodge took Mr Pankhurst to his witness statement where he said the product had attracted $2 billion in funds under administration since being introduced. Mr Pankhurst said that the...
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Importance of the rules-based international system The Philippine StarAugust 16, 2018 - 12:00am Amanda Gorely, Daniel Pruce   Amanda Gorely is the Australian Ambassador to the Philippines. Daniel Pruce is the British Ambassador to the Philippines and to Palau. Like all countries, the Philippines, Australia and the UK benefit from an international system founded on strong and credible rules. Without these rules, we would all be poorer and less secure. Following World War II, the international community created a shared system of laws, rules and norms to govern how we interact with each other. The Charter of the United Nations affirms the sovereign equality of states, commits us to cooperate to solve economic, social, cultural and humanitarian problems, and prohibits the threat or use of force against the territorial integrity or political independence of any state, or in any other manner inconsistent with the purposes of the UN. ASEAN is at...
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Banking royal commission: Hayne releases NAB's shame file Australian Financial Review Aug 15 2018 6:17 PM James Frost   An explosive report from ASIC into NAB's fees-for-no-service scandal reveals a regulator furious at the bank's failure to acknowledge the serious and systemic failings in relation to an overcharging issue at the bank dating back up to 15 years. Titled "Outline of suspected offending by the NAB Group", the report from ASIC lashes the bank's failure to put in place controls that would prevent customers for being charged with fees for services it did not provide and an apparent total disregard for compliance. Dated October 2017, the report reveals ASIC has deployed its compulsory powers to investigate the matter which include the ability to compel bank employees to attend interviews under Section 19 of the ASIC Act. ASIC has confirmed the investigation is ongoing. The list of NAB entities named in the...
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Bankers' failed charm offensive with corporate regulators Australian Financial Review Aug 15 2018 11:00 PM Karen Maley   Banks, it seems, have a touching faith in the ability of their top executives to resolve conflicts with even the stroppiest of corporate regulators – either by relying on their considerable personal charms, or on the reverence that must surely be felt for those occupying such elevated positions. Earlier this week, the Hayne royal commission heard Andrew Hagger, a senior executive of the National Australia Bank, describe the "proactive courtesy call" he had made to ASIC commissioner, Greg Tanzer, in which he had obliquely indicated that the NAB's plan service fee problem was worse than indicated in the regulator's draft fee-for-no-service report. The phone call was designed to shield the bank from claims that it had not been candid with ASIC when the full extent of the bank's plan service fee issues subsequently...
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ANZ trustees may not meet IOOF, still collecting fees for shelf space Australian Financial Review Aug 15 2018 7:46 PM James Frost   Trustees of ANZ's OnePath superannuation fund have not met the new owners of its superannuation business, sold to IOOF for $1 billion, to satisfy itself they will act in the best interests of its members, and may in fact never do so, the Hayne royal commission has heard. The bank was also revealed to be accepting more than $11 million in shelf space fees, which are banned under the FOFA reforms, from investment managers, which it does not rebate back to clients but instead uses to pay itself for a nebulous range of services with a murky cost structure. The late-afternoon session of the eighth day of hearings into superannuation heard evidence from two ANZ employees under questioning from Michael Hodge, QC, including One Path Custodians chairman Victoria...
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Regulators face music over retail super funds The Australian 12:00am August 16, 2018 Richard Gluyas   The deputy chairs of the prudential and market conduct regulators can expect a thorough grilling on their agencies’ effectiveness when they appear tomorrow before the financial services royal commission. Helen Rowell, from APRA, and Peter Kell, from ASIC, are in the commission’s crosshairs, with Kell facing a more searching examination than his April appearance in the financial advice round of hearings. One of the topics this time will be the snail-paced transition of retail fund members to lower-fee MySuper products, despite repeated public warnings by the Australian Institute of Superannuation Trustees — and others — going back to 2011. While all funds were allowed a four-year transition period until July last year, it beggars belief that this could be seen in any way as in the best interests of members. In 2014, AIST issued a...
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Banking Code of Practice offers small business a safeguard Sydney Morning Herald 15 August 2018 12:05am Kate Carnell Kate Carnell is Australia’s Small Business and Family Enterprise Ombudsman.   Perseverance is a critical factor in advocacy success. When the Australian Securities and Investments Commission (ASIC) approved the revised version of the Australian Banking Association’s Banking Code of Practice, it was a significant milestone for us. The new Banking Code of Practice puts into practice most of the recommendations in our Small Business Loans Inquiry report, which we have been publicly arguing for on a weekly basis since it was released in February 2017. The new code contains significant positive initiatives and protections for small business, and since it is ASIC-approved, ASIC will ensure it is enforced properly. As recommended in our inquiry, the code has a dedicated new small business chapter, which requires a contract to be concise and written in...
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Melbourne land speculators 'panicking' as settlements loom Australian Financial ReviewAug 15 2018 11:00 PM Larry Schlesinger   EXCLUSIVE  Speculators who hoped to get rich on a boom in Melbourne land prices are "panicking" as settlements loom and they can't find developers to on-sell their sites to, according to Resi Ventures's Khurram Saaed, who has been developing for 15 years. Mr Saaed said he was getting one call a week from panicked speculators, including one buyer who had put down $21 million in deposits on a number of sites and risked losing all their money. "These are people who have been successful in other business, and who have just bought land with no due diligence in the hope of making a lot of money in three to four years' time by flipping the site prior to settlement," he told The Australian Financial Review. Some have indeed done well following a surge in...
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Housing spiral looms as potential buyers stay on the sidelines The Australian 12:00am August 16, 2018 Robert Gottliebsen   Sydney developers are now seeing more of their young, frustrated potential buyers moving to Brisbane. A year ago they were moving to Melbourne. But now Melbourne has caught some of the Sydney disease. In simple terms, they move out of Sydney because they have no hope of buying a home, given the high prices and the current bank lending rules. And when money is available, falling dwelling prices make them frightened. But the methods we are using to lower prices don’t address some of the fundamental causes of high dwelling prices: government rules and charges. Meanwhile, as the housing markets in both Sydney and Melbourne fall, home owners with high borrowing are becoming increasingly agitated, while those who want to get into the market are asking: “How far can the fall go?”...
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It’s all the customers’ fault, says NAB at royal commission The Australian 12:00am August 14, 2018 Michael Roddan, Ben Butler   In 2011, National Australia Bank spent millions telling Australians it was “breaking up” with the other major banks, pledging to do things differently. It must come as some surprise then, just a few years later in 2016, that NAB’s spin doctors were trying to keep the bank as “just one in the pack”, not an “outlier” and in the “middle” of the major banks. This time, though, the corporate affairs executives at NAB were trying to downplay how badly the bank had stung its customers for fees where no service was given. Two years later and the bank is still stalling on the problem, if the protracted testimony of NAB executives Paul Carter, Nicole Smith and Andrew Hagger at the royal commission is anything to go by. Despite having to...
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NAB's tips on how to snow ASIC - Fees for No Work Done Scam Australian Financial Review Aug 13 2018 7:07 PM Karen Maley   Andrew Hagger, the chief customer officer for retail customers of National Australia Bank is an affable fellow with a formidable talent for circumlocution. It was a knack that Melbourne-based bank used to great advantage back in October 2016. Back then, the corporate watchdog, the Australian Securities and Investments Commission, had sent out a draft report on advice service fees. The problem for NAB was that ASIC planned to include the bank's plan service fees – where customers in superannuation funds run by the bank had been charged fees on general education advice about superannuation and their investment options, even though they had no financial advisers linked to their account. The draft copy of the report that ASIC prepared indicated that NAB was likely to face a...
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PM fends off Lucy’s links to $444m reef grant recipients The Australian 12:00am August 10, 2018 Andrew Clennell, Geoff Chambers   Malcolm Turnbull’s office has confirmed that two of the directors of the Great Barrier Reef Foundation — the recipient of a $444 million grant from his government awarded without tender — may have been hosted at the Prime Minister’s home by wife Lucy. The Australian can reveal the head of the Great Barrier Reef Foundation’s philanthropy committee, Stephen Fitzgerald, a one-time head of Mr Turnbull’s former investment bank Goldman Sachs, was on the board of the European Business Advisory Council at the same time as Mrs Turnbull. Mr Fitzgerald is also on the council of advisers for the US Studies Centre in Sydney — where Mrs Turnbull is patron — and was on that council while Mrs Turnbull held the role of deputy chair between 2012 and 2015. The chair...
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NAB CEO Andrew Thorburn: 'We do not believe they are criminal' Australian Financial ReviewAug 9 2018 9:03 PM James Frost   NAB CEO Andrew Thorburn says the bank did not act honourably but was not guilty of criminal acts in its wealth and superannuation arms, after another punishing day at the Hayne royal commission. "We do not believe they are criminal acts," Mr Thorburn said. "ASIC has made some claims against us that they suspect we have had some breaches and those are unresolved. They are suspected and not proven." "The point we are making is that we do not believe they are criminal breaches and we certainly do not believe they are criminal acts." Mr Thorburn acknowledged the bank did not act honourably following a third day of evidence from the chairman of its superannuation trustee Nicole Smith, where it was revealed the bank was being investigated for more than...
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NAB's tips on how to snow ASIC Australian Financial Review Aug 13 2018 7:07 PM Karen Maley   Andrew Hagger, the chief customer officer for retail customers of National Australia Bank is an affable fellow with a formidable talent for circumlocution. It was a knack that Melbourne-based bank used to great advantage back in October 2016. Back then, the corporate watchdog, the Australian Securities and Investments Commission, had sent out a draft report on advice service fees. The problem for NAB was that ASIC planned to include the bank's plan service fees – where customers in superannuation funds run by the bank had been charged fees on general education advice about superannuation and their investment options, even though they had no financial advisers linked to their account. The draft copy of the report that ASIC prepared indicated that NAB was likely to face a compensation bill for fees for no service...
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Melbourne auctions are dismal Australian Financial Review Aug 12 2018 4:18 PM Su-Lin Tan   The Melbourne auction scene is dismal with the general number of bidders now down to "one or none", buyer's agent Morrell and Koren's Emma Bloom says. Despite being the nation's strongest auction market, Melbourne's auction volume has plunged year on year down to 718 auctions against 955 last year. Sydney too struggled for supply of homes for sales, at 459 auctions versus 798 last year. Melbourne's preliminary auction rate at the weekend was 58.5 per cent, according to Domain. For the week, it was 61.3 per cent higher than last week's 57 per cent but still lower than last year's 69.8 per cent. "A lot of auctions have been failing," Ms Bloom said. "What agents are now doing to protect the value of the home is to use an expressions-of-interest private treaty selling method." Ms Bloom...
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Banking royal commission: Hayne terrifies banking industry The Australian 12:00am August 13, 2018 Richard Gluyas   An abrupt summons delivered last Friday to senior National Australia Bank executive Andrew Hagger to appear today at the financial services royal commission has signalled a new chill between the commission and the nation’s besieged banking industry. Mr Hagger, NAB’s chief customer officer consumer and wealth, is the first bank executive to be summonsed by Ken Hayne at short notice, without the opportunity to pull together a witness statement. It signals a much more aggressive approach by the commission, which has previously identified its likely areas of focus to targeted institutions so they can prepare their witnesses. Last week, however, hostilities between Mr Hayne and NAB exploded. The commissioner erupted at the bank’s senior counsel and former Federal Court judge Neil Young, accusing him of a coaching Nicole Smith — the ex-chair of NULIS, the...
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National Australia Bank pays low interest to superannuation customers The Australian 12:00am August 13, 2018 Anthony Klan   National Australia Bank has short-changed its super­ fund members in addition to fee gouging by paying interest rates on simple “cash” investments well below what a mystery shopper was ­offered after approaching other banks, documents show. A witness statement by NAB executive Paul Carter filed with the banking royal commission says independent analyst firm Rice Warner had conducted a “no names” ­inquiry of CBA, Westpac and ANZ to obtain quotes and had “identified that a higher rate may be available” than that which NAB was paying its superannuation members. The statement says that subsequently, one of NAB’s superannuation arms had negotiated, with NAB, a 26-basis-point increase in the interest rate NAB would pay to its own super members — a move that would see “cash” returns being paid to many members almost double....
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NAB, IOOF just the tip of the iceberg Australian Financial ReviewAug 12 2018 11:00 PM Adele Ferguson   "Did you think, yourself, that taking money to which there was no entitlement raised a question for criminal law?" Commissioner Kenneth Hayne asked one of the witnesses. "I didn't," replied the former chairman of NAB's superannuation trustee, NULIS Nominees, Nicole Smith. Hayne's words would have chilled trustees across the country, many of whom have sat in conflicted silence around the board tables, earning tidy sums as they rubber stamp a myriad of matters that are not in their members' best interests. Trustees are supposed to be the guardians of our retirement savings. The Australian Financial Review can reveal that the Superannuation Complaints Tribunal as recently as July 3 made a landmark decision to direct a trustee to not just refund more than $8000 in fees deducted for no service to a member that...
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