The Financial industry-controlled AFCA has proved over the past three years to be a disappointment, for consumers that is. In March this year the NSW Supreme Court overturns an AFCA ruling due to “absence of impartiality and independence”. If more could afford to take AFCA to court, it is believed, such judgements would be common place. The ‘Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Bill 2017’ is a title that misrepresents what AFCA is, and ironically it was enacted by an ex-NAB banker.
AFCA Fact: AFCA IGNORES ITS OWN INTERNAL ADVICE
An AFCA Internal Serviceability Report stated the following:
“…However, in my view, the bank failed to display the care and skill of a prudent and diligent banker by not linking the profits of S Pty Ltd by taking a guarantee from S Pty Ltd to secure the loan to the company…”
And
“…it is my view, a prudent and diligent lender would have directly link the revenue stream to the borrowing by interlocking guarantees…”
And
“…it was poor banking practice to allow the interest only obligation to continue without a review once on notice of the sale of the business in 2009…”
And
“…the bank could have exercised greater skill and care by linking the cash flow source for debt servicing directly to the loan…”
What was going on?
The bank, the Bank of Queensland (BOQ), covertly used another company’s financials to justify serviceability of a ‘Business Term Loan’. The company did not bank with BOQ, had no relationship and made no undertaking to BOQ. Had BOQ not done this they could not have justified serviceability of the Loan. This also meant that directors unknowingly were making decisions that was having a critical material impact on serviceability.
What did AFCA do?
The ‘Preliminary Assessment’ and the consequent ‘Panel Determination’ totally ignored their own expert findings. None of the above was mention or referred to in the ‘Preliminary Assessment’ or ‘Final Determination’. It would seem BOQ can do no wrong.
What does BOQ say?
“…we support AFCA as an independent and fair external dispute resolution body for our industry…”
Conclusion:
This is one of many examples of extreme bias by AFCA in favour of BOQ in this case. Like its predecessor FOS, AFCA is not an independent and fair external dispute resolution body, they are ‘Gatekeepers’.
Note: The borrower never missed payment and were ready willing and able to continue to do so.
AFCA is perceived by bank consumers to be bias in favour of its members, yet banks routinely claim AFCA is independent and impartial.
For example:
A Former AFCA Case Manager RC worked for NAB for over 29 years before working for AFCA for just 2 years, and then took up a position with Bankwest.
Just prior to leaving AFCA RC found in favour of a Bankwest as a case manager.
Also:
Gerard Brody of the Consumer Action Law Centre (CALC) found that of all home lending complaints made to AFCA in 2020 there were no determinations that favoured the consumer.
Also:
In March 2022 an AFCA ruling was overturned by the NSW Supreme Court due to the “absence of impartiality and independence”
I personally know as a complainant and an ex-member of AFCA, that AFCA is bias to the point of corruption.
My Question is:
Because there is no meaningful AFCA merits review of NAB cases outside the courts, is NAB prepared to fund merits review of NAB AFCA cases in the Federal court?
Is Westpac as a member of the company limited by guarantee, the Australian Financial Complaints Authority (AFCA) aware that ASIC information sheet INFO 215 states, one of the characteristics of a company limited by guarantee is:
“…each member of the company has a single vote…”
Section 3 of the AFCA constitution breaches this by having non-voting members
What is worse section 10.7 states; “on a poll, each Voting Member has one vote for each dollar paid by the Member in respect of Levies and Case Costs to the Company”
This effectively gives control of AFCA to the worst offenders; the criminals metaphorically have a controlling interest of the court, which is also a breach of information sheet INFO 215
My question is:
As a member of the big four, who collectively are the worst offenders, can Westpac justify to consumers and non-voting members of AFCA how this is justifiable or fair?