The Unpleasant Truth About Australian Banking

Craig Perry Story

My name is Craig Perry. This is my story, my worst experience with one of the leading banks in Australia for ages. I was cheated by the bank since we accepted the bank’s first offer for our loan facilities.

In 2010, my family signed a loan contract with Commonwealth Bank at Swan Hill branch as we needed to restructure our family partnership and pay out the loan we had with Elders bank. The arrangement we had with the bank was unsuitable, as it was interest-only and we were purchasing the bank’s commercial bills. We did not understand the bank’s method of financing which we raised verbally with Tim Triplett (Swan Hill Agri Manager) over several years adding further that it was extremely expensive and not in our best interests. However, Tim Triplett simply ignored requests to provide alternative options for funding, stating “sorry it is a commercial world, and this is the only way Commonwealth Bank can do it.’

The bank did not require us to have a business plan, instead, we provided an annual budget for cropping and livestock costs, which meant the bank did not carefully assess our risk before approving our budget.

The unstructured relationship with Commonwealth Bank was inappropriate for the farming business that suffered from significant variations in livestock and grain prices as the market determines farm earnings after the running costs have been paid. It is more serious because seasons varied and there must be sufficient cash reserves, which are part of every agribusiness program but cannot be assumed when budgeting.

On 17 November 2010, we received the bank letter for a temporary increase to the overdraft to $350,000 which required clearance by 28 February 2011. The total debt facilities to $2.85M.

In 2011, the bank introduced covenants that required the sale of land if fiscal targets were not met. The facilities offered by Commonwealth Bank provided no opportunity for principal repayment. Then the bank took unreasonable amounts of time to approve new facilities and temporary adjustments to the Overdraft. The timing of planting barley and wheat crops is extremely important for its success, especially more so in dry years. The delay in funding is the difference between a profit and no profit, which means the difference between income and no income. On 25 April or anything up to 2 weeks prior thereto, is the industry best practice for barley and wheat planting. The bank’s approval dates, which were applied for well before the cut-off date for planting, were delayed.

With a number of variations of sessional finance increasing the overdraft until 20 March 2015, our debt facilities increased to $3.75M.

We experienced drought in 2014 and 2015, which the bank was unwilling to support and its recommendation to us was to require our suppliers and creditors to carry out debts so that the bank did not have to increase our loan. Again, we were the victims of a bank that was not an appropriate agribusiness lender. Around this time, the bank forced us to sign unreasonable forms against our will, inclusive of agreeing to sell land to obtain crop finance. Further, the finance given was not sufficient to run the farm, but sufficient to meet interest payments. The bank advised us to make small creditors carry farm input costs.

In 2016, when we were likely to have a good year and the bank was confident that we could continue financing our term loan, it did not reconsider the way it was dealing with our business. It continued to look at our financial situation in arrears. This year, the bank again did not support by way of funding to plant crops. In converse, it forced us to sign documents that would result in a lump sum repayment on the debt. Further, we received support from creditors, enabling the planting of crops and a very profitable year.

In early February 2017, we requested crop finance from the bank, to ensure adequate timing of funds for April planting. The bank took until 30 June to offer a $500,000 facility for crops, two months past the optimal time for planting crops. It wanted to charge a $25,000 fee for the finance and we did not take up this offer, as it was too late to plant seed. It was a great season but due to the time it took for approval of funds from the bank, we missed the opportunity for seeding and the crop was only half-sown.

In 2017, the bank took us to the farm debt mediation which was not an appropriate way to resolve disputes free of charge. At that time, Commonwealth Bank had not provided us with a copy of the relevant documents that would support our loan and any difficulties we face. The Mediator, a former banker, and the bank bullied us at Farm Debt Mediation and the Mediator tried to force us to sell the farm with the bank’s control.

After the mediation in 2017, we had to attend further mediations because, while Commonwealth Bank should have known that it had to comply with the essential elements of complaints handling set out in the AS 4269-1995 Standard.

Throughout this period, the bank’s practices were disgraceful because there were two further periods of mediation, and our debt with Commonwealth bank was less than 50% of the value of the farm.

In 2018, I met with Commonwealth Bank Chief Executive Matt Comyn in Canberra. On the back of this meeting, I attended three additional meetings with him and other senior Commonwealth Bank staff on 7 December 2018, 30 May 2019, and 27 June 2019 to no avail and ended back at Farm Debt Mediation.

In 2019 and 2020, I attempted to outline my loss at Farm Debt Mediation, on the back of Commonwealth Bank’s conduct, totalling $16.9M. The bank denied any wrongdoing and ignored our claims completely. During this time, we missed two good seasons of crop and because of the bank’s actions, we had virtually no cropping income since 2016. The bank forced us to sign a deed of settlement, essentially giving my family no choice in the matter.

From 2015 to 2020, I had to spend $100,000 on accounting, legal, and other independent experts, through various channels trying to resolve our disputes with the bank, which should have been dealt with free of charge as set out in the 2004 Code and AS 4269-1995 Standard.

The bank had a series of misconduct in my case, including:

  1. providing pure asset or ‘predatory’ loans without considering serviceability requirements;
  2. providing short-term high interest-bearing loans not suited to our circumstances, not in our best interests, and not suitable for the underlying assets;
  3. breaching the loan contracts by withholding documents pertinent to our rights;
  4. prejudicing the signing of the Deed of Settlement in 2020;
  5. harassing and intimidating us during FDM; and
  6. causing material crop losses due to unreasonable delays in funding along with disruptive conduct during disputes.

I now believe that all these Commonwealth Bank’s practices should not have happened and that ASIC had a responsibility to protect my rights. I have discussed this with people who attended meetings at Parliament House in 2018 and 2019 and believe ASIC was not an honest cop because it claims it cannot act for any individuals, which has been the case since self-regulation was introduced by banks in 2003.

I believe that Commonwealth Bank had a duty to advise me of my rights under the 2004 Code of Banking Practice and the AS 4269-1995 Standard, which were an essential part of our loan contract. The bank, its directors, and its licensee had not complied with the internal dispute resolution procedure in the Code, which stated banks must resolve disputes free of charge (clause 35.1(a)). The bank and ASIC knew this but were involved in deception by omission when keeping this information from me.

The deception by omission occurred throughout my dispute period. The Code, in clause 35.1(b), noted leading legal minds at this time had published the essential elements of effective complaint handling in the AS 4269-1995 Standard. As I did not have access to this document, ASIC took no action when it must have known that Commonwealth Bank could deceive me when I was attempting to resolve my disputes.

I understand that Commonwealth Bank’s directors, according to ASIC Regulatory Guide 165, were responsible for causing us a financial disadvantage, which is a crime.

It seems that Commonwealth Bank directors and their associates are determined to trust luck to protect them because by omitting ASIC Regulatory Guide 165 (2001) from the Code, the bank profited and cause customers like me a financial disadvantage. This is a massive crime and far more serious than the practices of Bernie Madoff when he was described, in 2009, as America’s greatest fraudster and was jailed for 150 years.

We have obtained evidence that the bank damaged us by not complying with the 2004 Code including:

  • clause 2.1 when it did not provide us with information in plain language
  • clause 2.2 when it did not act fairly or reasonably towards us
  • clause 7(a)(b) when it did not ensure its staff and authorised representatives were trained effectively.
  • clause 35.1(b) when it did not deal with our complaints free of charge
  • clauses 35.3 and 35.4, when it did not complete the investigation or inform us of the outcomes nor did it provide us, complainants, with written reasons (clause 35.1(d)); and
  • clause 37.1(a) when it did not prominently publicise the Code in branches especially in regional and rural areas (as noted in the CCMC’s Bulletin 4).

I have been writing to the bank’s Chair, Chief Executive, and directors during the past 12 months because the bank placed me in a position whereby its conduct was misleading. This was also an act of fraud because the bank’s directors dishonestly obtained profits from misappropriating my business’ funds.

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