The federal opposition has accused Australian banks of withholding information from clients to prevent legal claims of misconduct.
In a roundtable discussion initiated by the Australian Labor Party (ALP), alleged ‘victims of misconduct’ revealed that banks withheld information from clients to avoid litigation.
In its submission to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, following the release of Commissioner Kenneth Hayne’s interim report, the ALP said that several participants in the roundtable discussion accused the banks of withholding information during disputes to prevent clients from making claims of misconduct.
“In some cases, this involved withholding of documents requested through internal disputes or the [Financial Ombudsman Service] process, unavailability of call recordings which customers believed would prove their claims, or unavailability of particular witnesses from the bank to be examined in court about their actions,” the ALP told the commission.
The ALP continued: “A concerning number of participants reported that banks had withheld or failed to provide information that the participants believed was essential to ensuring a just outcome in their case.”
The Labor Party claimed that the issue is “inextricably linked” to the broader concerns that participants raised during the course of the roundtable discussion, which included concerns regarding:
• the cost of litigation,
• the financial and costs pressures on customers, and
• the pressure to settle for less compensation than they appeared legally entitled to.
“Each of these matters speaks to an imbalance between banks and customers in dispute resolution processes, and a tendency by the banks to exploit this imbalance to minimise compensation paid to customers, even where misconduct is acknowledged or is plainly evident,” the ALP claimed.
One client from Perth, Western Australia, said: “You are completely helpless, you have no control. But the banks have all the control.”
According to the ALP, other findings from the roundtable discussion included:
• severe impacts on victims (mental health, suicide, physical health, losing family) without reasonable and fair-minded offers of compensation
• legal system not bringing justice for customers
• external dispute resolution (EDR) schemes not working adequately
• banks, valuers, liquidators and receivers targeted victims during the global financial crisis
• inadequate hardship policies
• banks choosing litigation processes instead of reasonable settlement with victims
• lack of accountability and inappropriate behaviour by bank staff
• inadequate remediation of consumers
• lack of time for bank victims to have a voice in the process
After much speculation, NAB has appointed its new chief executive following the departure of Andrew Thorburn. ...
Credit rating agency Fitch Ratings has changed its outlook on Westpac and ANZ from “stable” to “negative”, following APRA’s updat...
International investment group Mayfair 101 is launching a new brand to focus on Australian customers and provide diversified international i...