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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.


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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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BFCSA: Denise Brailey's Intro to Senate Hearing 20th Feb 2014

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 INTRODUCTION ADDRESS TO PARLIAMENT by Denise Brailey: 20th Feb 2014


Thank you Senators, I would like to begin my perspective of ASIC’s performance with a detailed summary of my 15 years of dealing with ASIC at Commissioner Level, in most States. My files harbour an extensive historical record of consumer complaints being ignored by ASIC. Now in 2014, we read another few hundred submissions stating the same lack of confidence exists when vulnerable consumers are forced to deal with ASIC.


Individual losses from the pockets of hard working Australians ought to be of considerable concern to the Australian Parliament. Serious financial burdens placed upon older people losing their homes, retirement funds, and financial security places an immense burden on our economy.


Firstly, I would like to table the original 2001 LIST of SCAMS that I uncovered 1997 to 2001. I briefed ASIC hierarchy in meetings in Brisbane and Sydney, the results of which compounded extreme losses in collapsed companies in 2005 - 2007. ASIC placed warnings on their website in 2003, after I placed this list on our RECA (Inc) website.


Among the scams identified: Solicitor Mortgage Scams (127 law firms flagged by ASIC list), Managed Investment Scams, Boiler Room Scams (Hong Kong), Mezzanine Scams, Promissory Note Scams – the model adopted by Westpoint and others.


I warned ASIC Commissioner about all of these in a July 2001 meeting. In 2003 I also flagged another 20 companies at risk. All have since collapsed.


Victims were unsophisticated, ordinary Mums and Dads. Most were spruiked by the creating wealth industry. Unlicensed Spruikers herded customers into unsafe and high risk investment vehicles, touted as low risk. Bankers eagerly waited in the wings for equity lending opportunities, providing funding facilities to the Spruiker market. We provided ASIC with the evidence required at all times.


No bankers, lawyers and very few directors have faced criminal charges. ASIC did little to assist consumers or take action against promoters and players, during investigations.


During 2002, I discovered the Low Doc Loan Scandal and complained once again regarding hidden Loan Application Forms that had been altered after signing by ‘persons unknown.’ My communication with ASIC has been with Chairmen, Commissioners or Directors of Enforcement has been limited to a few specific meetings taking place over the years.


In the Banking Inquiry Post GFC, 2012, we heard the case of a 100 year old person being “approved” for a 30 year loan. BFCSA has discovered a number of similar loans approved by Major Lenders to people of 80 years and older. To my knowledge, no Lender Executive is facing criminal charges relating to fraud found in all documentation we have examined.


No matter who tampered with the file after signature obtained, broker or bank manager, the lender approved the loan in direct breach of S25.1 of the Australian Bankers Code.


I now wish to table the Wignall documents. Mr Wignall was approved for a loan by Major Lender, post 1 July 2010. Mr Wignall complained to ASIC but was sent the usual form letter: “Not investigating, not in public interest, can see no evidence, get a lawyer.” Mr Wignall complained to the ASIC Chairman a second time – to no avail.


We now have 46 members whose loans are post 1 July 2010. ASIC has stated the new NCCP laws are working well, yet the same model of approval relating to affordability and Maladministration in Lending, as a breach of The Code is still evident on all files.


In 2013 The Chairman asked that I meet with his Commissioner. I advised the lawyer I was preparing to lightly redact some copies of 2000 emails I had received. The internal emails were written by Bank Officers known as BDM’s, and sent to all brokers. BDM’s were offering to write up applications to save time. I prepared 200 emails for ASIC and presented them to the Commissioner.


I now table the ASIC letter that was sent to me specifically asking me for the emails.


ASIC is now suggesting I did not provide the LAFs. Please see my notes as ASIC have suggested an untrue version of events to the Senators.


During this meeting the Commissioner stated: “Yes the banks were the engineers (of the Low Doc Scams) no doubt about it.” Brokers and Planners could not have dreamed up the SERVICE CALCULATOR being used as a critical tool to exaggerate incomes.


The Credit Assessors who used the service calculators to check the broker calculations had used white out to alter the income figures – hence the phenomenon of three people’s hand-writing on the LAF. LAFs were therefore altered by internal bank staff after the LAF being faxed by broker to bank.


Furthermore, 36% of all loans were written by bank managers and officers – no broker’s involved.


All have exaggerated incomes and 18% of all loans surveyed are FULL DOCS.


In 2003 ASIC commissioned a report by Karen Cox of CCLS NSW. It detailed fraud and forgery relating to LAF Fraud. ASIC quickly blamed the broker industry and the commission structure. The Brokers were Agents of the Banks and in the case of Violet Homes Loans vs Schmidt the Judges accepted that argument. To date no lender has been charged.


BFCSA surveys from members show:


 85% of loans are with Major Banks.


 36% of loans are arranged by Bank Managers and officers (no broker involved).




· 18% of total loans are FULL DOCS


 46 loans are under new NCCP laws and have received the same flick letter from ASIC.


 People caught in this scam have no funds for legal advice.


 No-one received a copy of the LAF at point of signing


 ASIC sends out letters telling consumers to get a lawyer – “not in the public interest.”


 Lenders are now shredding the evidence as reported in main stream media.




I begged the Commissioner to remedy these problems for the sake of consumer protection. If all clientele were to receive a copy of the LAF at the point of signing, and a follow up phone call days later and pre-approval, the service calculator would be suddenly made redundant. Consumers would therefore be effectively protected.


Our experiences with the External Dispute Resolution Services, (“EDR’s”) licensed by ASIC is mostly disappointing, particularly in relation to the Credit Ombudsman’s Services Ltd.


COSL letters to BFCSA members state “there is evidence of fraud and therefore we cannot assist.” ASIC advise the victims of COSL members to complain to COSL. COSL refuse to look at cases involving fraudulent LAFs, as evidenced by hundreds of letters/emails. COSL then close the client files. There is no consumer protection for clients of COSL members.


ASIC misleads Parliament by suggesting “there are no systemic issues.”


The Financial Ombudsman’s Service


FOS reports a raft of systemic issues regarding Low Docs. ASIC do not advise Parliament. There has been a mounting set of key indicators to suggest foul play in the banking sector since the initial 2003 Low Doc report, commissioned by ASIC and written by Karen Cox.


Please read my introductory notes on my dealings with FOS.


In their PILOT Program, FOS has skipped the process of RECOMMENDATION and axed the Panel of Review. Instead, victims of bank fraud are being given a “take it or leave it” document known as the Ombudsman’s Determination and there is no right of appeal, nor any right to respond to legal arguments, biased to the Lenders.


This is no way to deal with serious cases of criminal offences being committed on older persons. It’s a new trend emerging in the mishandling complaints and of great concern to BFCSA.


FOS initially used their powers in 2009 to demand discovery of documents from Lenders. Now FOS refuses to assist with demanding documents. Lenders say “documents are missing and ASIC accepts that.” Lenders win again.


The situation has become untenable regarding both EDR’s.




In 2004, I lobbied Senators regarding the inadequacy of the $100,000 complaint limit set by the Banking Ombudsman. Today the raised compensatory figure of $280,000 is in desperate need of an increase, as the average loan is in excess of $600,000.


The SERVICE CALCULATOR is the Lender’s secret weapon. I discussed this in detail with ASIC in Feb 2013. The Service Calculator form printed out by Broker or Bank staff “must be attached to LAF, or we will not process your deal.” This wording is contained in evidence provided to the Commissioner. The clients are signing to say they have seen and read and understood everything, yet the clients are only being presented at point of signing with 3 pages and not 11 pages as a complete LAF document. No copies are handed out after the signature obtained.


In 2005, Bankers boasted of a new $50 billion market, promoted to all their agents and staff. Vulnerable people identified by Bankers as being Asset Rich and Income Poor (“ARIPS”) were flagged as the new target market.


The 30 year interest only loans written in 2005 were destined to implode by 2008/9. Bankers handle all the levers as to release more “buffer loans” to hide the inevitable defaults, and mask the UNFFORDABLE LENDING activities necessary for sub prime profits. All of this an intended contravention of S 25.1 of the Code.


As the regulators watched the problem unfold, the new NCCP laws were devised as a superb smoke screen.


All cases funded and won by clients to date were won with arguments used from the significant protections in the “old laws” - pre 2010 and still in existence, including the ASIC Act. One Senator stated: “ASIC has plenty of powers:” The new laws intentionally create a false impression that the old laws could not save the previous batch of bank victims from financial ruin. Not true, as evidenced by decisions and precedents set in the High Court and Appeal Courts. ASIC’s intention: to throw all legitimate complaints into the regulatory bin.


ASIC‘s appalling failure to identify any of the key indicators that BFCSA has brought to the attention of Parliament since 1998 is the very reason for this Inquiry being established.


We ask the Senators to recommend to Government that a new Australian Bureau of Consumer Protection be established, containing a Serious Fraud Unit. We ask that no bankers or ASIC gene-pool executives need apply.


We ask that these Interest only loans, paid by buffer loans to hide non affordability, are toxic sub-prime lending practices which ASIC has failed to notify the Parliament of its existence, be removed from the market shelf. Customers are being refinanced by more debt being approved; refinances are masking unaffordability issues to show clients can “afford next year’s payments,” thereby hiding defaulting loans.


BFCSA Members ask that buffer loans and Lines of Credit be prohibited, as they cannot be properly policed. That refinancing of toxic and loans born of Maladministration be banned. We also ask that all potential consumers be warned by Parliament of these activities.


The thirty year INTEREST ONLY mortgages are a ticking time-bomb and can only end in grief for decent Australians.


Please refer to the Introduction Notes


Thank you Senators, I close my perspective of ASIC’s performance with some details from their last media piece when they reported 7 prosecutions or actions. BFCSA asked the regulator to take action against lenders, to ban the six degrees of separation model in selling banking financial products and ban the Service Calculator.


By their own inaction ASIC is condoning all these fraudulent activities by stubbornly refusing to take any action.


Please read the ASIC refusal letters in the case of Mr Wignall.


If ASIC continue to refuse to take up running cases against lenders, there is really little for them to do except be clerical keepers of dormant registers. ASIC obviously don’t know what to do or, don’t want to do what they are supposed to do. It is a scandalous situation and one that cannot be permitted to continue.


BFCSA exists because of ASIC’s incompetence and bad performance on a national level.


No other democracy would permit the alleged perpetrator to commence mass destruction of vital documents during an investigation into a disturbing white collar crime scene.


I call on the Senators to recommend sweeping changes as per my Submission # 156 and my Supp Submission (156.1). I table that list of preferred recommendations.


Please note: Philip Hanratty suggested in his 1997 critique of the Wallis Report on banking, that the new proposed (ASIC) regulator would have a conflict of interest in serving two masters: Industry needs and those of Consumers. I am of that view.




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  • doyla66
    doyla66 Saturday, 29 March 2014

    "BFCSA exists because of ASIC’s incompetence and bad performance on a national level. "

    EXACTLY !!

  • doyla66
    doyla66 Saturday, 29 March 2014


    Your right arree, BFCSA also exists because victims of bank fraud have no where else to go as the regulator is hopeless, asleep at the wheel and protecting the evil banks and their scandalous system of robbing decent Australians blind.

  • doyla66
    doyla66 Saturday, 29 March 2014

    ASIC have lost the plot or did they ever know what was happening? A huge money waster. No morals, no guts.!!!!!

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