The Unpleasant Truth About Australian Banking

My name is Paul Nielsen, and I would like to tell you a story about Ann Genner, who I met a few years ago. Ann arrived in Australia from Berlin with her mother shortly after the end of the Second World War. Her story is particularly disturbing: she was cheated by her bank and its directors. Recently, Ann found that her bank committed a massive crime, or was it simply negligent?

One of the small business councils reviewed her case and prepared a short submission. It outlined the reasons Ann believes her bank sold her a predatory loan and was involved in criminal conduct. The bank denied this. Ann has asked me to prepare this story about her case.

Ann has been a long-term resident of the Wentworth electorate and has always been disappointed that neither Malcolm Turnbull nor David Sharma would help her. With the Royal Commission, Ann asked a law firm to help her resolve complaints with the bank, but the bank took no action. Ann believed that resolving complaints with her bank should not be difficult because she had rights under the 2004 Code, but later she found it would not help her.

In 2018, a respected law firm prepared an outline of Ann’s case and provided it to the bank’s directors and later to the Senate, but they dismissed it. During this period, Ann was in poor health. Expecting her bank to comply with the 2004 Code, she had to accept that she was cheated, and her bank had intentionally left her with nothing.

Ann was born in Berlin in 1944. She migrated to Australia with her mother in 1950 and they joined with her father who had migrated earlier. When Ann was fifteen, she left school and worked in her mother’s shop. In 1964, Ann was 20, when her mother died from cancer. In 1971 she married a man who was later a successful businessman.

In November 1990, Ann was divorced. In the divorce settlement, Ann received the house in Victoria Road, Bellevue Hill, and rented it to cover the cost of her debt. Ann obtained a mortgage from Australian Securities Limited.

On 11 March 2008, Ann was offered a loan from Westpac. She accepted it because Westpac was one of Australia’s leading banks. At that time, Ann did not understand the difference between a home loan and a business loan, and therefore signed the bank’s business loan agreement.

Given the complexity of loan terms, when signing the loan, Ann believed that she only needed to pay minimum repayments of $10,000 per month. The rent from her house was sufficient rent to pay that amount. Actually, the interest was approximately $32,000 per month.

Ann was 15 years old when she left school. When she signed Westpac’s loan contract it was almost 50 years later: she was 64 and working as a shop assistant earning $400 a week. I discussed this with Ann, and it was difficult to accept that the bank’s experts would require her to agree on the conditions and standards of the loan contract without legal assistance.

In April 2010, the bank increased her loan limit, which would expire in October, six months later. The variation had a special condition attached, which required Ann to have a contract signed and sell the house by 31 July 2010, 90 days later.

On 13 October 2010, Westpac called in Ann’s loan, and she was distressed. The bank told her that her house was valued at $7.5M and if she did not sell it, the bank would. Ann said this was more frightening than being in Germany shortly after the Second World War, and therefore did everything possible to sell the house for $7.5M. She contacted leading agents in Double Bay, and none said that they could sell the house for $7.5M. Ann was frightened.

On 14 December 2010, the agents found a buyer who purchased the house for $5.5M, and shortly after Ann wrote to Gail Kelly, Westpac Bank’s Chief Executive. Ann said:

I am writing to you as a last resort. As a lady and the reputation, you hold of being fair, I plead my case. All I request is that you look at my mortgage with Westpac and see if under these extreme circumstances that you could make changes to the enormous interest rates which I have been charged over the period of my mortgage loan.

The pressure, duress, and circumstances leading to the acceptance of the contract of Sale of my home to a conclusion that has left me virtually penniless, with no way of buying a home and now having to sell my furniture and belongings just to live.

Gail Kelly did not reply.

It suggested the bank sold Ann a predatory loan. She had no business in 2008, how did it sell her a business loan? Westpac was probably negligent and/or reckless when her sole asset was only a house that was part of her divorce settlement.

If Westpac had complied with the special conditions of the business loan, it would have found that Ann had a job as a shop assistant in a clothing store and she was earning $400 a week that barely covered her living costs. It meant that she would be earning circa $19,000 a year when the interest and repayment costs were about $32,000 per month.

If the bank had sold her a home loan, there would have been safeguards in the contract protecting homeowners, but not businesses. Faced with the bank selling her home, Ann treated the repayment as a fire-sale and lost her equity.

Ann’s initial complaint was that Westpac did not provide her with essential documents about her loan or include a copy of the 2004 Code of Banking Practice.

Gail Kelly should have understood what happened when Ann wrote to her. Ann had suffered difficulties because it had taken a long time before she understood the licensee had to meet its responsibilities. Her complaints should not have continued for ten years, and during this time Ann’s health has deteriorated.

As mentioned, Ann wrote to Kelly in 2011, who had previously been Deputy Chair of the Australian Bankers’ Association. Kelly at this time was supported by the industry body that drafted the 2004 Code. However, Westpac’s staff were not required to investigate Ann’s complaints, preferring to breach the dispute provisions in clause 35.1 of the 2004 Code. If Kelly resolved the dispute free of charge, her staff would have met the cheap, speedy, fair, and accessible alternative that remains available to Ann.

In June 2018, Ann’s solicitor (O’Brien Criminal & Civil Solicitors) filed a submission with the Banking Royal Commission. It outlined Ann’s complaints, and her losses since 2011, which should not have occurred.

As part of his endeavour, on 4 November 2018 Ann’s solicitor lodged a complaint with the Westpac Chief Executive, Brian Hartzer. The complaint, like the earlier one with Kelly, remains open.

I do not believe Westpac Bank, the licensee, met its requirements under the Corporations Act 2001. Ann had right to have her disputes resolved as set out in the 2004 Code and the bank had to meet relevant provisions in the AS4269-1995 Australian Standards. Its directors and senior managers did not meet these requirements.

In summary, the licensee did not engage honestly and fairly with Ann to resolve her dispute when the loan was impaired. The bank’s threat to introduce an external controller to sell the house meant that Ann would lose her rights and trust the bank to sell it at the best possible price.

When O’Brien Criminal & Civil Solicitors filed Ann’s complaints in 2018, Hartzer knew Ann could not afford to pay the interest costs. It meant the licensee had sold Ann’s loans without checking her creditworthiness or ability to pay the interest.

The bank knew, in 2007, that Ann had not always paid the ASL interest on time and that her taxable income was Nil. Her tax records would support this. This demonstrates that the bank behaved in a deceptive manner and imposed unreasonable and unjustifiable loan terms. It required Ann to sell the house above its current value within 90 days.

Westpac’s directors misled Ann when they offered her a business loan, secured by her house, to refinance ASL’s home loan. The licensee provided her a business loan when she did not have a business. This was evidence that it sold her a pure-asset loan. This, as well as her limited education, meant the bank should not have asked her to sign the loan contract without legal advice.

I finished my education at UNE 25 years ago, and this was the first time I had attended a Senate Standing Committee on Economics. It was held at Fraser Suites, Pitt Street Sydney.  Ann Genner’s case was included in four submissions to the public hearings on 10 June 2021 and was one of four cases in relation to banking practices.

The Senate References Committees Members attending were its Chair Anthony Chisholm, Deputy Chair, Slade Brockman, and Members Anthony Brag, Jenny McAlister, Rex Patrick, and Jess Walsh. There were also 60 participating members, Mat Caravan, Katy Gallaher, Jacky Lambie, Susan McDonald, Bridget McKenzie, and Penny Wong.

On 7 August 2021, two months after the inquiry, I was experiencing difficulties obtaining transcripts. I wrote to Mark Fitt, Committee Secretary, and said Ann was concerned that the Senate would not release the document outlining her case which raised very serious allegations about misconduct by her bank. I told Fitt that she was “aged and weak and would like her complaints resolved without any unnecessary delay”.

Fitt, two days later, said, “Ann has no other route to access private industry documents and in reference to your request to contact witnesses, the answer is no. Any further actions will constitute contempt of the Senate.” I withdrew my comments. However, I was concerned that the Senate References Committee Secretary and members had evidence of a crime but preferred to be guilty of concealing this crime.



This story has been prepared for and at the request of Ms. Ann Genner. In preparing this story, I have relied on the source information provided to us by Ms. Ann Genner and have believed this information is accurate and complete.

I have also supplemented the source documentation provided with publicly available information, where appropriate.




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