Gladys - our intrepid researcher has found these gems  We suggest all victims of LOW DOC LENDING and TOXIC MORTGAGES, broaden your knowledge of FOS................................32,000 complaints per year show that these TOXIC fraudulent, unaffordable (implode in 5 years) 30 year loans have been going on for over a decade, and continue to do so.  Had proper action been taken by ASIC against the BANKS involved, FOS would be back to handling 70 complaints per year!  Now FOS is busy trying to invent ways to fast-track complaints and find excuses to close files.  Like the BLANK FORM SCAM.  No-one signed blank forms...............its a magician's trick!!!  Three pages are pre-filled in - standard industry practice.  We collectively KNOW THAT to be true.  You need to join BFCSA to find out how to watch out for Banker/FOS tricks.

Is FOS' "ethics" slipping due to being swamped with complaints?  Without BFCSA's collective knowledge no-one in Australia would have known of the LAFs.  Banks desperately tried to hide them as they did the dreaded SERVICE CALCULATOR fudging income form.  This email address is being protected from spambots. You need JavaScript enabled to view it.

http://www.fos.org.au/the-circular-5-home/responsible-lending-conduct-obligations-maladministration/

Responsible Lending Conduct Obligations & Maladministration

Consumer Credit
Margin Lending
Case Study - Low Doc Lending
Case Study - Investment Lending

Consumer Credit

The national credit reforms introduced by the National Consumer Credit Protection Act 2009 (NCCP) have given birth to a statutory concept of “responsible lending” obligations which apply to loans or increases in loans.  For some years, FOS has considered disputes regarding “maladministration in lending”. FOS continues to do so under its current Terms of Reference.   The responsible lending obligations and FOS’s approach to maladministration are closely linked. A dispute is likely to raise both issues. This article discusses FOS’s approach to:

  • the financial services provider (FSP)’s responsible lending obligations under the NCCP, and
  • maladministration.

We provide some guidance on the inquiries we consider appropriate to assess a consumer’s ability to service their credit facility in accordance with their obligations in light of both the responsible lending obligations and maladministration. Specific commentary is provided about our approach to low doc lending.

FOS Terms of Reference (TOR)

The TOR allow FOS to consider a dispute raising the question of whether the FSP breached the responsible lending obligations and whether there has been maladministration.   Paragraph 5.1 of the TOR says FOS may not consider a dispute about an FSP’s assessment of the credit risk posed by a client or the security to be required for a loan – but this does not prevent FOS from considering a dispute claiming maladministration in lending, loan management or security matters. This means FOS does have jurisdiction to consider disputes about maladministration. Maladministration means:

“… an act or omission contrary to or not in accordance with a duty or obligation owed at law or pursuant to the terms (express or implied) of the contract between the Financial Services Provider and the Applicant.”

As the responsible lending obligations are a duty owed at law in lending, loan management or security matters, a dispute about whether an FSP breached those obligations is within FOS’s TOR.   FOS’s TOR also provide that, when deciding a dispute and whether a remedy such as compensation should be provided, FOS will do what in its opinion is fair in all the circumstances, having regard to:

  • legal principles
  • applicable industry codes or guidance as to practice
  • good industry practice, and
  • previous relevant decisions of FOS or a predecessor scheme (although FOS will not be bound by these).

Therefore, our approach to responsible lending disputes takes into account:

  • the NCCP
  • any case law on the NCCP as it is developed by the courts
  • ASIC’s guidelines
  • industry codes and practices, and
  • our past approach to claims of maladministration in lending (see Bulletins 45, 50 and 60).

 

http://www.fos.org.au/custom/files/docs/bulletin_60_dec_2008_banking_finance.pdf

 

Criteria for Decision Making


The Terms of Reference also specify the criteria for decision making. Clause 1.3 states that the Ombudsman must have regard to the law, applicable industry codes or guidelines, good industry practice and fairness in all the circumstances.
Accordingly, when assessing disputes that raise issues of maladministration in the decision to lend we will also take into account:

The provisions of the UCCC, particularly the considerations under section 70;

The provisions under section 7 of the Contracts Review Act, where applicable;

A financial services provider’s common law contractual duty and whether the particular circumstances of the case give rise to a claim of unconscionable or misleading conduct under the ASIC Act;

The provisions of clause 25 of the CBP if the financial services provider is a bank which has adopted the CBP.

 

http://www.fos.org.au/custom/files/docs/fos_banking_finance_bulletin_45.pdf

 

BFSO Bulletin 45
March 2005

In this issue: Credit card limits and maladministration

 

In Bulletins 26 (September 2000) and 33 (March 2002) we set out our approach to issues arising in disputes concerning credit cards. Each of those Bulletins touched on the issue of maladministration in the context of the granting of credit cards and increases in limits applicable to those credit cards. This Bulletin sets out in detail the rationale for our approach to disputes about maladministration in granting credit on credit card accounts and illustrates our approach to loss and the resolution of disputes. We also make some comments ..........The focus of this Bulletin is maladministration. While there is discussion about unjust contracts under the UCCC and the Contracts Review Act 1980 (NSW) (“Contracts Review Act”), cases which raise those claims require a different analysis of the circumstances and may also require a different approach to compensation.about cases that raise a possible claim that the contract was unjust.

 

 

http://www.fos.org.au/custom/files/docs/fos_banking_finance_bulletin_50.pdf

 

Banking and Finance - Bulletin 50
June 2006


In this issue:
Unsecured Credit and Maladministration
Systemic Issues: Concurrent Investigations

 

Collection and use of information by lenders
Lenders should at an early stage examine the information held by them about the disputant’s financial position. Transaction account statements may show salary deposits, Centrelink payments or other funds being deposited. Those statements and/or the credit card statements may show regular debits to meet other loan
commitments, insurance premiums or other fixed expenses. A loan or other credit application may be held in another area and it may provide the required information. The suggestions we made in Bulletin 45 about information which may be used to assess grants of credit were not intended to be followed slavishly or become an unnecessary obstacle to resolving the dispute.Collection and use of information by lenders Lenders should at an early stage examine the information held by them about the disputant’s financial position. Transaction account statements may show salary deposits, Centrelink payments or other funds being deposited. Those statements and/or the credit card statements may show regular debits to meet other loan commitments, insurance premiums or other fixed expenses. A loan or other credit application may be held in another area and it may provide the required information.

The suggestions we made in Bulletin 45 about information which may be used to assess grants of credit were not intended to be followed slavishly or become an unnecessary obstacle to resolving the dispute.