The Unpleasant Truth About Australian Banking

Ronald Feierabend’s Story 2

My name is Ron Feierabend, one of Suncorp Bank’s victims for ages now. I am keeping trying to resolve disputes with the bank, but this is proved a challenging and impossible process, not only for me but for all other Suncorp Bank’s customers.

For the past 12 months, I have repeatedly written to the bank and the regulators (ASIC, APRA, Commonwealth Ombudsman, etc.) alleging the bank dishonestly obtained a financial advantage and damaged our properties, but neither the bank nor regulators investigated my complaints.

To start my process, in August 2021, I wrote to Suncorp Bank’s Relationship Manager, Agribusiness Central Queensland, Mr. Paul Kirchner, stating:

The 2004 Code of Banking Practice, an essential part of my loan contract, was not given to me by the bank either before or when I signed my contract.

Mr Christopher Doogan AM acting for the bank and the Australian Bankers Association, on 13 June 2017 informed the Senate Economic References Committee Inquiry into Consumer Protection in the Banking, Insurance and Financial Sector:

  1. The Code was developed and controlled by the Australian Bankers’ Association, and,
  2. Once the bank subscribes to the Code, it becomes mandatory for that bank to comply with it.

I am willing to sign a Declaration that the bank did not provide me with a copy of the 2004 Code, nor did it comply with the Code when I was trying to resolve complaints.

The bank’s failure to provide me with the 2004 Code was deceitful, which meant I did not know what the bank’s responsibilities were nor what my rights were.

I am looking forward to meeting with you in order to resolve my complaints, which have to be dealt with free of charge.

Without any response from Mr. Kirchner, in September 2021, I again wrote to him, stating:

I have written to you on several occasions regarding allegations of misconduct by your bank. The bank did not provide me with the 2004 Code of Banking Practice either before or when I signed the loan contract in 2012.

This disappointed me because, without this Code, I was not able to access the essential elements of complaints handling in AS 4269-1995 Standard. It concerned me that the bank did not have a properly functioning complaint handling service, and this caused me a significant disadvantage.

In July 2019, ASIC stated that ASIC Regulatory Guide 165 was part of clause 35.1(b) of the 2004 Code. The failure to include this in the 2004 Code was unfair, as this clause only stated, ‘any other industry dispute standards or guideline which ASIC declares to apply to this Code’. I suggest the Australian Bankers Association should have included Regulatory Guide 165.

I believe my bank did not meet these standards when I filed complaints. Instead, the bank did not comply with provisions in the 2004 Code and the essential elements in AS 4269-1995 Standard when dealing with the serious allegation in my complaints.

I require a commitment from you and your directors to revisit my complaints and comply with this Code and the rule of law within 21 days.

I look forward to your confirmation that you and the bank will resolve my complaints free of charge.

I repeatedly wrote to Mr. Kirchner without success.

On 15 April 2022, I signed a Statutory Declaration and sent it to the bank, stating:

I signed a loan contract with Suncorp Bank in 2012, when John Mulcahy, Chief Executive, promised to comply with the 2004 Code. But he misled me.

When I signed the contract, the bank’s directors dishonestly told me disputes would be resolved free of charge, as set out in clause 35.1 of the 2004 Code. They said:

We will have an internal process for handling disputes with you. This process will (a) be free of charge; and (b) meet the standards set out in Australian Standard AS4269-1995 or any other industry dispute standard or guideline which ASIC declares to apply to this Code.

Not until 2021, did farmers who attended Parliament House meetings in 2018 and 2019 know which standard or guideline ASIC declares to apply to this Code. Bankers and the Australian Securities and Investment Commission (ASIC) deceived millions of customers between 2003 and 2014 because they did not know the guide referred to in clause 35.1(b) was ASIC Regulatory Guide 165 (2001).

Prior to publishing the 2004 Code, ASIC Regulatory Guide 165 (2001) was in place. My bank’s directors concealed this regulatory guide, using extortion to damage farmers like me. They misled the Royal Commission and were the architects of Australia’s greatest crime. This was a national problem indiscriminately destroying the lives of individuals and farmers.

On 3 June 2022, I wrote to Ms. Christine McLoughlin AM, the bank’s chair, stating:

I wrote to you on 24 May 2022 because your Chief Executive John Mulcahy and his board adopted the 2004 Code without including ASIC Regulatory Guide 165 (2001) in clause 35.1(b).

Without it, farmers could not resolve disputes free of charge, nor could the bank attend Farm Debt Mediation in good faith. This is not an allegation, and Suncorp then took possession of our farm dishonestly.

I am also writing to Julie-Ann Jordan, Program Officer, Farm Business Debt Mediation, Queensland Rural, and Industry Development Authority because this is a systemic problem and has damaged other Suncorp clients.

The attached document identifies this practice was in place in 2004. The Code Compliance Monitoring Committee’s Bulletin 8 requires external parties attending mediation to advise us that they will ‘be handling dispute resolution and are obliged to comply with clause 35 of the Code.’

Without this guide, the mediator and DLA Piper did not meet this obligation when attending Farm Debt Mediation and the damages to us were significant.

Please rectify this oversight within 7 days so that the bank and its lawyers will not sell our farms.

Again, on 5 July 2022, I wrote to Suncorp Bank’s Chair, Ms. Christine McLoughlin, stating:

I refer to my letter of 30 June 2022, which set out my concerns with the way your bank has handled its responsibilities since my family has been customers.

My 30 June letter identified practices that your bank should have addressed prior to the review by Commissioner Kenneth Hayne and Rowena Orr in 2018. I would like to highlight the practices that you have not dealt with appropriately.

  1. In May 2004, chairmen and directors of subscribing banks, including Suncorp Bank, claimed that the 2003 and 2004 Code ‘will have an internal process for handling disputes with [customers] and [it] will be free of charge’.
  2. Your bank adopted the 2004 Code which claimed it would ‘meet the standards set out in Australian Standard AS 4269-1995 or any other industry dispute standard or guideline which ASIC declares to apply to the Code.’ This statement was made by your bank’s chairman who was ‘a trusted person in a high position of responsibility’, but he did not include ASIC Regulatory Guide 165 (2001). Without this guide, customers could not resolve disputes free of charge and had to use the court.
  3. I wrote to you on several occasions in the past 12 months because your bank’s directors placed me in a position whereby its conduct was misleading. This was an act of fraud because your directors and your bank dishonestly obtained profits from misappropriating my business’ funds.
  4. Your directors should have been familiar with the House of Representatives’ inquiry into the impairment of customer loans to the committee’s 4 June 2015. A report filed by Tasmania Small Business Council’s Submission 61 (Attachment 1) states:

The definition of “fraud” is provided under section 192E of the Crimes Act 1900 (NSW):

A person who, by any deception, dishonestly:

  1. Obtains property belonging to another, or
  2. Obtains any financial advantage or causes any financial disadvantage,

is guilty of the offence of fraud.

For the purposes of this definition:

“Dishonest” means dishonest according to the standards of ordinary people and is known by the defendant to be dishonest according to the standards of ordinary people.

  1. The misconduct by your bank’s directors might more accurately be described as ‘control fraud’. It occurred when a trusted person in a high position of responsibility in a company, corporation, or state subverts the organisation and engages in extensive fraud for personal gain. The term ‘control fraud’ refers both to the acts of fraud and the individuals who commit them. The concept of control fraud is based on the observation that the directors and Chief Executive of the company were uniquely placed to remove the checks and balances on fraud within a company.
  2. In my letter to you on 30 June 2022, I noted that Suncorp Bank did not provide me with a copy of its Standard Terms and the relevant code when I signed the Facility Offer. Without these documents, small businesses and farmers like me could not protect our rights. There were several other allegations supporting my concerns that your directors and leading banks misled millions of customers.
  3. I alleged your directors were involved in dishonest practices since 2004 when they adopted this code. During this period, your bank was listed on the Australia Stock Exchange (ASX) and your directors may have been obtaining credit including money laundering, fraud, and other criminal practices.
  4. Your directors knew or should have known that the ASX would only allow your bank to continue trading and raising capital on the stock market when it is sure that no funds would be used for responsible lending, money laundering, rigging rates, or other dishonest practices.
  5. Your directors will confirm that they knew or should have known that former Senator George Brandis QC and Professor at the Australian National University advised the government that small business customers could not afford to use the courts. The Former Governor General and Justice of the High Court of Australia, Sir Ninian Stephen had previously made the same statement.
  6. Without having access to the ASIC Regulatory Guide 165 (2001) since 2003, customers like me had to use the courts to resolve disputes because there was no free of charge forum for us to use. The directors will also confirm that the Code Compliance Monitoring Committee reported leading banks, since 2013, had received more than one million complaints per year.
  7. Your bank’s directors did not meet the standards set out in the AS 4269-1995 Standard, which supports my family’s position that small businesses and farmers were not protected by the Code, Regulatory Guide 165 (2001), and the AS 4269-1995 Standard.
  8. The farmers and small businesses who attended meetings at Parliament House purchased a copy of the AS 4269-1995 Standard in 2021. This document was published by the OB/9 Committee which included:
  • Law Consumers Association;
  • Law Institute of Victoria;
  • Law Society of N.S.W.;
  • S.W. Law Reform Commission;
  • Office of Consumer Affairs, Qld;
  • Office of Fair Trading and Business Affairs, VIC; and
  • Trade Practices Commission.

The commitments made by the OB/9 Committee require Suncorp Bank’s directors to ensure their staff and external lawyers comply with all the provisions of the document. My family is customers of the bank, and it should not have taken us until 2021 to understand that if the bank had not complied with the AS 4269-1995 Standard, they were in breach of the loan contracts and could not meet the good faith requirements to attend Farm Debt Mediation.

We have reviewed the transcripts of your bank when your Chairman and Managing Director appeared before the Royal Commission Rowena Orr in 2018. We believe your bank misled the Royal Commission. Suncorp Bank’s officers and executives who claimed that they would tell the truth, the whole truth and nothing but the truth apparently ignored the Oath, when they did not tell the whole truth in relation to their directors’ misconduct since 2008.

We also found that your external lawyers did not attend Farm Debt Mediation in good faith, nor did they comply with the CCMC Bulletin 8. This was not an oversight that the bank and its external lawyer did not meet the commitments in the Code, AS 4269-1995 Standard, and ASIC Regulatory Guide 165 (2001).

I attempted to explain the serious allegations of misconduct and practices by your bank since 2003, which was more serious than practices by Bernie Madoff, who was America’s greatest fraudster. I have not received your response nor an explanation of why the bank’s directors destroyed the businesses and lives of farming and small business customers for the last 19 years.

Until you have explained your directors’ position in relation to these practices, the farmers and small businesses who attended Parliament House meetings in 2018 and 2019 will continue to believe this was the greatest crime ever and that your bank willingly committed acts of fraud. Your decision to not provide us with all the relevant documents when we signed our loan contract was intentional and caused us financial and personal loss, pain, and damages.

I am also writing to your external solicitors, federal and state politicians, and third parties as your bank’s misconduct between 2008 and 2018 were kept from Kenneth Hayne.

I require a commitment by your directors to investigate the allegations in this letter and repay damages by EOD 12 July 2022.

More recently, on 25 November 2022, I wrote to Ms. Michelle Bain, Suncorp Bank’s General Counsel, stating:

I am writing to you because Suncorp Bank has sold us a loan contract claiming the bank will comply with the 2004 Code, but this was a dishonest document and allows the bank to avoid resolving disputes free of charge. It was a crime, and the directors will have to now accept responsibility for this.

The following information provides background to the crime, which has only been found to exist during the past 2 years.

In 1989, John Howard and his government commissioned a review of practices whereby industries could be self-regulated. The person responsible for carrying out this review was Berna Collier, Professor of Commercial Law, Centre for Commercial and Property Law, Queensland University of Technology.

In August 2000, the Taskforce on Industry Self-Regulation published recommendations that were intended to improve the performances of industries and would be better for both companies and customers. The Treasurer at that time was Peter Costello a highly qualified lawyer and experienced politician. There were a considerable number of recommendations, but the report highlighted:

Self-regulatory schemes tend to target specific problems within industries, impose lower compliance costs on businesses, and offer quick, low-cost dispute resolution procedures (p.1).

As consumers cannot guard against specific industry problems that they do not know exist, transparency in schemes is an important mechanism to ensure both credibility and accountability (p. 6).

Best practice in self-regulation. . . has important implications for the government’s approach toward a more efficient regulatory framework for both businesses and consumers (ToR, p. v). Good practice . . . can be understood as significantly improving market outcomes for consumers at the lowest cost to businesses (p. 59).

However, certain entities may not be able to meet the compliance costs of best practice even though minimum standards will provide consumers with appropriate service and protection.

We have set minimum standards for the training of advisers. By setting and enforcing these training standards, we aim to help licensees comply with their legal obligations to ensure that they and their representatives are adequately trained and competent to provide the services covered by their AFS licence. Under the Corporations Act licensees must adequately train and supervise their representatives and must themselves be competent.

It emphasises the importance of “Industry adherence to self-regulatory schemes” (p.61) and stressed “consumer awareness is an important element of good practice in self-regulation” (p. 68).

Redress encourages industry members to react promptly and fairly to complaints by having internal complaint resolution mechanisms and, where appropriate, subscribing to some form of fair and independent dispute resolution scheme. . . [It is] “essential to ensure that dissatisfied consumers have access to cost-effective mechanisms for resolving their complaints” (p.73) (emphasis added).

The Taskforce considers that a business should provide clear and accessible information to consumers on any independent customer dispute resolution mechanism to which the business subscribes.

Such independent customer dispute resolution mechanisms (outlined by the Taskforce and included in Submission 64 Select Committee on Lending to Primary Production Customers) should be:

  1. accessible;
  2. independent;
  3. fair;
  4. accountable;
  5. efficient; and
  6. effective (p.74).

Establishing a self-regulatory scheme is only part of the equation. Industry also needs to be aware that it has a continual responsibility to ensure that self-regulation is addressing its objectives and ethical members are not being disadvantaged (p.78).  

In 2002, David Murray and David Bell, made statements to small businesses and farmers stating the contemporary codes (2003 and 2004) required the banking industry to meet these key requirements. Murray and Bell stated:

The Australian Bankers’ Association today launched the new generation Code of Banking Practice which is the banking industry’s customer charter on best banking practice standards.

Chairman of the Australian Bankers’ Association (ABA), David Murray said ‘The Code sets out the banking industry’s key commitments and obligations to customers on standards of practice, disclosure, and principles of conduct for their banking services.

This Code becomes operational in August next year when individual retail banks will adopt these standards and their compliance will be monitored by an independent panel.

This Code has real teeth as I know of no other banking Code in the world that is enforceable as a contract by the customer.

In 2004, Suncorp Bank’s directors adopted the 2004 Code, but its officers and executives did not meet David Murray and David Bell’s requirements. In August 2018, farmers like me attended a meeting at Parliament House and several people reported dissatisfaction in the way their banks had complied with the principles set out in Submission 64 (Select Committee on Lending to Primary Production Customers). They expressed disappointment that the 6 key elements set out above were not addressed by their banks.

In 2021, it became evident that the 2004 Code was deceitful and that Suncorp Bank’s customers could not resolve disputes free of charge. This concerned small businesses and farmers from all parts of Australia. They now realised they were misled by the federal government, regulators, and the banks. Clause 35.1 states: 

We will have an internal process for handling disputes with you. This process will:

  1. be free of charge;
  2. meet the standards set out in Australian Standard AS4269-1995 or any other industry dispute standard or guideline which ASIC declares to apply to this Code;
  3. adhere to the timeframes specified in this clause 35; and
  4. require us to provide written reasons for our decision on a dispute.

Customers were not protected by the 2004 Code because ASIC Regulatory Guide 165 (2001) Licensing: Internal and external dispute resolution was omitted from clause 35.1(b). By omitting this guide, Suncorp bank had a clear intent of committing a crime because no customers could resolve their disputes free of charge.

In December 2010, the Council of Small Business Organisations of Australia’s Submission 90 regarding competition in the banking sector. This report demonstrates the introduction of Self-regulation in the banking sector was for the benefit of the government, regulators, and the bank. The customers had no rights under the Code and as noted earlier in this report, the bank’s directors had the intention to use the Code to commit a crime.

The rules set out in the AS 4269-1995 Standard protect customers, but banks did not make these available to their clients. There was no requirement by banks to provide advice on the Standard and noting it set out the essential elements for complaint handling. The NSW Law Society is familiar with its role in protecting its members but has not required its members to protect their clients.

The new government will have to enforce these claims for up to $1.1M. Small businesses and farmers look forward to banks’ directors and senior executives being forced to pay this penalty for not complying with dispute resolution and Farm Debt Mediation rules set up 20 years ago. We understand banks must meet the rules set out in:

  1. Internal Dispute Resolution (IDR) procedures
  2. hardship provisions (clause 25.2 of the Code)
  3. the AS 4269-1995 Standard, and
  4. effective disclosure of information.

The 26 million Australians, 3.5M small businesses, and 230,000 farmers can now, after 20 years of criminal practices by banks, protect property, machinery and livestock and funds they saved for generations.

Please confirm by return email when you received this important letter that should be forwarded to the bank’s directors since 2004.

I have been attempting to resolve my disputes with Suncorp Bank, the banking industry regulator, and Commonwealth Ombudsman, but sadly without success. I have now filed complaints with the government. My family believes the state government, for 20 years, profited from the bank and its regulators’ crime. It should have known about this, which it has concealed or compounded to protect the bank, not customers like us. I never can accept that these events could happen to me and my family in Australia.

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