Financial Royal Commission Notification and FOS Complaint

5th April, 2018

Approached by a 79-year-old local Western Australian pensioner on the 7 September 2017, I was disappointed to hear her story, and at the financial advice given to her by the CBA. That advice included recommending that two blocks of land be purchased as part of an overall investment strategy.

Both blocks of land were then recommended by the CBA's financial advisers, and the CBA gave her a 30-year mortgage to buy the blocks. This was despite the only income being a pension, and the lady concerned having no further assets and renting a unit.

With $100 a fortnight left from her pension (after factoring in rent and food), and having to carefully consider whether to turn on either her heating or cooling (due to increasing energy costs), there was concern over her ability to repay the loans, which then fell into arrears.

I sought specialist financial advice (including the advice of a Registered Bankruptcy Trustee) and discussed the situation with the CBA. The CBA issued default notices and retook possession of the blocks, selling one for less than the purchase price (due to the distressed housing market in WA) and finalising the sale of the other. A significant debt then existed and collection activity commenced against the pensioner concerned.

My immediate concern was her age, financial, medical and mental position (including the ongoing stress) and whether the transaction, the recommendation of the two blocks by the CBA, the CBA's issuance of credit, and the circumstances that occurred prior to myself being contacted constituted "Responsible Lending" on behalf of the bank.

I recommended to the CBA that the advisers concerned need to be seriously investigated, especially considering the circumstances in this case. Furthermore, and due to the financial position of the pensioner, a complaint was subsequently made to the Financial Ombudsman Service ("FOS") and a notification made to the Financial Services Royal Commission.

Personally, and having been involved in the Insolvency and turnaround industry for over 20 years, and having a considerable forensic background working on many Administrations, Liquidations, Receiverships, consultancy's etc, I wish I could say that this is an isolated case, however as we have now seen during the Financial Services Royal Commissions hearings, there are systemic problems in our banking system and unsatisfactory conduct in the industry. This conduct is completely unacceptable, and it's time for change Australia, and in holding those responsible for this behaviour to account, both legally and financially.

In any event there should be no celebrations or bonuses where the behaviour uncovered so far has been occurring, and I look forward to the Financial Services Royal Commissions final report and recommendations.

Finally and in the interim, and in my interactions with various Registered Liquidators, Bankruptcy Trustees and Financial Councillors across Australia, It is most important if you are experiencing any financial difficulties, i.e. cashflow, liquidity, debtors, creditors, tax issues, superannuations, PAYG, GST and/ or contract related issues that you obtain assistance as soon as possible, as any delay in obtaining this advice could be problematic to your financial position and/ or your business.

As your Senate Candidate for WA, I am available to assist my fellow Australians and my office can be contacted via Phone: (08) 9240 1474 or email: [email protected]

Philip Couper