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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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BFCSA: Westpac, CBA flooded with new customer complaints

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Westpac, CBA flooded with new customer complaints

Australian Financial Review Mar 8, 2019 9.50pm

James Eyers, James Frost

 

Commonwealth Bank and Westpac are being flooded with new complaints as the Hayne inquiry roused angry customers out of the woodwork, forcing them and the new Australian Financial Complaints Authority to ramp up legal resources even before Labor's proposed changes that would allow even more claims.

New complaints against banks have been flying in to AFCA since completion of royal commission hearings: there are almost 1000 outstanding complaints against CBA, and a further 1800 involving Westpac, the banks revealed during parliamentary hearings in Canberra on Friday.

Since November 1, CBA has been hit with 830 new complaints – which the bank's deputy chief executive David Cohen described as "a very big number" – while at Westpac, the number is more than twice as large.

"I believe the number is 1800," Mr Hartzer said. "We'd love it to be zero."

Mr Hartzer speculated part of the reason for the dramatic spike has been the extra attention on AFCA's role as a clearing house for financial complaints, after three former dispute resolution bodies were rolled into one. "If I could just flick a switch and resolve them all, it would be great, but that's just not the case," Mr Hartzer said.

Mr Cohen said the new cases are "placing a strain on both AFCA resources and our own and we are gearing up to ensure there aren't the delays there have been in the past".

The new cases have arrived after banks promised to put customers first in the wake of devastating evidence at the Hayne inquiry including they were charging fees for no service, granting loans without making proper inquiries, and failing to invest enough in systems. Mr Hartzer described the inquiry as "a wake-up call" for banks' exposure to non-financial risks in a similar way that the GFC was a watershed moment for appreciating financial risk.

'Steps that help customers are positive in our eyes'

Both Mr Hartzer and Mr Comyn backed moves to support customers and community lawyers trying to take actions against banks, as proposed by Labor's "fairness fund".

"Steps that help customers are positive in our eyes, particularly if they to lead to fair and swift on a cost-effective basis – that must be better for everyone," Mr Cohen said.

Neither CBA nor Westpac could provide figures on how many customer cases with currently being fought in courts but both agreed they were now acting as "model litigants".

In addition to CBA's new AFCA cases, CEO Matt Comyn has personally been dealing with 30 long-running and complex customer disputes, some of which have been resolved; CBA has been hit with 5500 new complaints from customers responding to personal letters from Mr Comyn; and there has been "a significant increase in the number of complaints" relating to more complex matters that has forced it to lift resources by 25 per cent.

If Labor's changes to allow AFCA to consider disputes already dealt with by the ombudsman or courts and lift thresholds to $2 million for financial loss and $2 million for non-financial loss went through, Mr Cohen said the level of customer complaints could pick up. "Naturally, if limits are changed it does alter the flow," he said.

Both Mr Hartzer and Mr Comyn said they were not aware of particular ASIC investigations against individuals in their banks for transgressions identified by the royal commission, but Mr Comyn confirmed ASIC supervisors have been interviewing CBA staff, including on "enforcement" cases. "We have received a series of notices from ASIC across a broad range of matters," Mr Cohen said.

One of the potential actions against CBA relates to possible breaches of continuous disclosure laws when it was being pursued during the AUSTRAC case, but Comyn defended the board. "We believe the bank complied with its continuous disclosure obligations," he said.

Political concerns

The members of the committee also explored political issues ahead of the federal election. After Opposition Leader Bill Shorten proposed at The Australian Financial Review Business Summit this week a minimum "living wage", Mr Hartzer said any wage rises should be accompanied with improvements in productivity.

"If high wages or restricted employment contracts mean business do not want to take a risk and hire people, ultimately that is going to weigh on growth," Mr Hartzer said.

After Australian Banking Association CEO Anna Bligh suggested this week small businesses could face higher funding costs due if Labor went further than the Hayne report, including a proposed "clamp down" on farm foreclosures, Mr Comyn said that any policy that altered how banks assess the risk "could have implications for the availably and the cost of credit".

"But I am sure policy makers are aware of those trade-offs and they will be closely considered," he added.

Labor MP Matt Thistlethwaite probed Mr Comyn on The Australian Financial Review report that CBA was not able to switch off some of its advice fees as requested by ASIC. "It takes time – and I say that as an explanation, rather than an excuse," the CBA boss said, adding 97 per cent of the fees had been turned off and that would be 100 per cent in the next 10 days.

Labor members also pressed CBA on former chairman David Turner, who refused a request from the board to return 40 per cent of his directors fee for the last year he worked at the bank. Mr Comyn said CBA hadn't been able to recover the fee and agreed changes may be needed to allow banks to clawback director fees.

There was also an exchange on Labor's franking credit changes. Mr Comyn and Mr Hartzer said estimating the impact on their market capitalisation was difficult, but it was possible their valuations could be reduced although that would be in combination with other factors that weigh on investor sentiment.

They also both said they were concerned about the Reserve Bank of New Zealand's proposal to ramp up capital levels there, suggesting it could result in interest rate rises in NZ.

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