Heartless banks shamed in scathing report

Australia’s major banks say they look after cash-strapped customers, but a major report out today found a string of shameless practices.

Australia’s major banks have been smashed for their heartless treatment of cash strapped customers begging for help with their home loans.

A major review of practices at the Commonwealth, NAB, Westpac and Macquarie banks has unearthed a string of shameless tactics.

The Australian Securities and Investments Commission examined more than 1400 bank hardship files in a landmark 157-page report released on Monday.

“What we have seen is simply not good enough – struggling customers deserve the right support in their time of need,” ASIC Chair Joe Longo said.

“For people who reach out to their lender to signal they need support, this can be devastating.

“Too many Australians in financial hardship are finding it hard to get help from their lenders.”

ASIC chair Joe Longo. Picture: Aaron Francis / The Australian

The cases examined in the report included a woman experiencing domestic violence who was kept on hold for more than an hour when desperately seeking a delay in her mortgage payments.

The call dropped out when the woman, who was referred to in the report as Amy, was transferred to a different team.

She was forced to call back again to explain her situation.

“I am in an abuse situation and I need to put a pause on my loan so that I can try and move somewhere safe,” Amy told her bank.

After making this plea, she was told to send an email and then had to wait five weeks before her request was granted, which happened on the day that her mortgage payment was due.

Matt Comyn, CBA chief executive.

Westpac chief executive Peter King.

The Commonwealth, NAB, and Westpac combined made $55 million profit each day – more than $10 billion – in the six months to December 31.

But the report found they failed to provide decent call centre services to help customers struggling with their loans.

The Bendigo and Adelaide Bank, ING, Pepper Money, Resimac and Secure Funding were also examined in the report, while ANZ has previously been audited.

The report’s findings contrast with the information on the Commonwealth Bank’s website, which included a video of its communications specialist Jess Irvine.

“No-one should be feeling alone as they face the current cost of living challenge,” Ms Irvine said in the video.

NAB CEO Andrew Irvine.

Jessica Irvine.

Hardship complaints have soared, with more than 500 applications made each day between October and December last year.

Customers who borrowed too much when interest rates were at ultra-low levels were the most common seeking help from their banks.

Reduced income, medical problems, losing a job and divorce were the next most often reasons people could not pay their mortgage.

Banks were accused of making the application process so difficult that as many as 35 per cent of people simply gave up and took the risk of foreclosure.

More than 80 per cent of hardship claims related to family homes, with the median value loan of those in trouble coming in at $312,000.

Anna Bligh, Australian Banking Association chief executive, said “in any organisation, there is always room for improvement.”

“Banks will consider these findings and work with ASIC on any further ways to support customers,” Ms Bligh said.

“Customers who are feeling the pinch financially should take heart from the fact that the report finds that 94% of all completed applications for assistance are approved.”

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