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ASIC misrepresenting the facts: Spin doctors - Caught out! Lying to Parliament

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20 September 2012 Page 1 of 11

Inquiry into the post-GFC banking sector

Questions on Notice taken by ASIC at the public hearing on 8 August 2012

Question 1 (Hansard Ref: p. 55)

Senator CAMERON: When you say ASIC will act on issues if they are raised, the
evidence we had from the previous witness [Denise Brailey] was that
correspondence had gone to ASIC seeking some support on the FirstMac and
Streetwise issues and no support was forthcoming. Is that correct?

Mr Kell: I am not in a position to comment on individual matters. What I can say
is that ASIC had some complaints brought to it about low doc loans. These
instances have almost exclusively, from my understanding, all concerned loans
made prior to the GFC and prior to the introduction of the national consumer
credit protection regime in July 2010. In some cases they involve matters where a
finance broker has been charged by the police, so another agency is taking action.
In some cases ASIC sought follow-up information to these complaints, but I am not
in a position to comment on the particular matter that you have raised. If you want
us to take a question on notice, we are happy to do so.

Senator CAMERON: You are not indicating to me that you would comment on a
specific matter; you just want time to have a look at the question that is raised.

Mr Kell: I would have to understand whether it is a matter ASIC has looked at,
whether it is still looking at it or whether it might face confidentiality constraints. I
am not able to provide that sort of information at the moment.

Senator CAMERON: What I am interested in—and there might be other views on
this—is you said if matters are raised with ASIC then ASIC would deal with them.
That is contrary to the evidence we had in this particular matter. If you could,
have a look at the Hansard on that matter from the previous witness and come
back to us, firstly, with what steps ASIC took in the matter and, secondly, what
steps as an institution ASIC has put in place to deal with any forthcoming issues of
that type. Is that clear?

Mr Kell: I am very happy to do that. I think that would allow a more considered
response to those issues.

Firstmac and Streetwise
ASIC intervened in foreclosure proceedings seeking to enforce low doc loans
commenced by Tonto Home Loans Australia Pty Ltd (now Firstmac) and Permanent
Trustee Company Ltd to repossess the homes of Streetwise investors which had been
mortgaged to secure moneys lent to them by Tonto to invest with Streetwise. ASIC’s
intervention was welcomed by the lawyers acting for the borrowers in the case who
were the subject of legal proceedings to repossess their houses. ASIC did not provide
funding to Ms Brailey to take legal action in relation to Firstmac and Streetwise.
ASIC intervened to assist the Court in relation to the construction and application of the
Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission
Act 2001 (Cth) ("the ASIC Act"), and in particular the construction and application of
the unconscionability provisions in Part 2 Div 2 of the ASIC Act. In short, ASIC argued
that the actions of the credit provider were unconscionable in the circumstances, having
regards to the manner in which the low doc loan transactions in question were arranged
through various intermediaries (eg finance brokers, loan originators and managers).

20 September 2012 Page 2 of 11

ASIC's intervention involved appearances before the NSW Supreme Court in 2009, the
NSW Court of Appeal in 2011 and the High Court in 2012. The High Court refused
Firstmac's application for special leave to appeal the decision of the NSW Court of
Appeal. As a result the decision of the NSW Court of Appeal stands which found that:
 Streetwise (the finance broker) was not the agent of the lender and the lender’s
conduct would therefore not be unconscionable under the ASIC Act; and
 the contracts were unjust under the Contracts Review Act 1980 (NSW) and relief
was granted to the borrowers in accordance with their specific circumstances to
avoid the relevant unjustness.

It is noted that the Full Court of the NSW Court of Appeal, in its decision on costs
handed down on 9 May 2012 stated that, "... without the slightest intended disrespect to
counsel for the respondents to the appeals, the presence of ASIC was of great assistance
in the conduct of the appeals."

For more information on ASIC's intervention in these proceedings, see media releases
09-39AD, 09-169AD and 11-314AD.

ASIC separately pursued enforcement action against Kovelan Bangaru of the Streetwise
group of companies, resulting in Mr Bangaru being extradited from the US, convicted
of fraud in 2010 and sentenced to a term of imprisonment of 8 years and 6 months (for
more information see media releases 05-240, 07-98, 08-114, 10-181AD and 10-
272AD). The NSW Court of Criminal Appeal recently dismissed Mr Bangaru's appeal
of both the conviction and the sentence.

The courts have set a high bar for establishing unconscionability. Generally each
decision turns on the particular facts of each transaction and often the court's decision is
based on a combination of several factors (see for example "Knowledge and neglect in
asset based lending: When is it unconscionable or unjust to lend to a borrower who
cannot repay?" by Dr Jeannie Paterson (2009) 20 Journal of Banking and Finance Law
and Practice 18 or "Asset Lending and the improvident borrower" by Lee Aitken (2012)
86 Australian Law Journal 134.) Generally, there is a lower threshold for establishing
that a loan was unjust.

In determining whether a transaction is unconscionable the courts look to whether the
borrower is under a special disability or disadvantage (such as poor English language
comprehension or infirmity of mind or body) and if the lender had sufficient knowledge
of this to make the lender's conduct, in acting to its own advantage in the circumstances,
unconscionable. However, there is no set definition of what constitutes a special

In Tarzia v National Australia Bank Ltd[1996] ANZ ConvR 379, the Federal Court
found that: "...[it] cannot be the position that a combination of ignorance of English, age
and lack of business experience necessarily puts a person at a special disadvantage in
dealings with a bank on a guarantee. For one thing, the description presumably covers a
great number of astute and capable Australians. Age itself does not raise a presumption
of weakness. The same may be said of their ethnicity and fluency in English. Such
factors may contribute to a relevant disadvantage in some people, and not in others."

20 September 2012 Page 3 of 11

It is more difficult to establish unconscionability where a broker is involved. This is
because the lender typically deals with the broker and may not have any direct contact
with the borrower. In these circumstances it is difficult to establish that the lender has
sufficient knowledge of the borrower's special circumstances. As the courts generally
view brokers as agents of the borrower, rather than the lender, the knowledge of a
broker cannot necessarily be imputed to a lender.
While the effect of a loan being unconscionable is usually that the transaction be varied
or set aside, it would be rare for a borrower to enjoy the benefit of a loan without any
obligation to repay. See for example, in Perpetual Trustees Victoria Ltd v Ford (2008)

Details of some actions taken by ASIC in relation to the unconscionable conduct
provisions of the ASIC Act are outlined in our response to question 2.

Responsible Lending Obligations
From 1 July 2010 the National Consumer Credit Protection Act 2009 (the National
Credit Act) introduced a number of additional statutory requirements for both lenders
and finance brokers, including licensing requirements (including the need to be a
member of an ASIC approved external dispute resolution scheme) and responsible
lending obligations.

The responsible lending obligations require finance brokers and credit providers to
make reasonable enquiries into and verification of a consumer’s financial position prior
to the provision of credit. Before providing credit, or suggesting that a consumer apply
for a loan, credit licensees must undertake an assessment as to whether the consumer
will be able to comply with the financial obligations under the credit contract, or could
only comply with substantial hardship. It is presumed that if a consumer will only be
able to comply with their financial obligations under the credit contract by selling their
principal place of residence, then the consumer could only comply with those
obligations with substantial hardship, unless the contrary is established. Credit providers
are prohibited from providing credit if it is likely that the consumer would be unable to
comply with their financial obligations under the contract, or could only comply with
financial hardship.

The responsible lending obligations in the National Credit Act provide a more explicit
regulatory framework around what credit providers and intermediaries (including
finance brokers) must do before providing credit, as compared to the general prohibition
on unconscionable conduct in the ASIC Act. As such, these responsible lending
obligations have significantly increased the level of protection for borrowers.

Residential Property Investment
To the extent that a consumer's inability to repay a loan arises from non-performance of
an investment in residential property, it should be noted that advice on direct investment
in residential property is not regulated as a financial product under the Corporations Act
2001 or the ASIC Act.

The states and territories have primary responsibility for the regulation of real estate
transactions. Although the National Credit Code has been extended to cover loans
entered into from 1 July 2010 for investment in residential property, it does not regulate
advice about direct investment in residential property.

20 September 2012 Page 4 of 11

Question 2 (Hansard Ref: pp. 55-56)

Senator CAMERON: What the constituent raised with me was they had been
advised by a relationship manager, an assistant manager of the bank at Forster
and the financial planner northern region on some financial transactions they were
going to take out. To make a long story short, they borrowed $2 million on this
advice. They are saying that there were bullying tactics, high-pressure tactics; they
had their funds all go into debt reduction; they were asked to sign blank
documents; they were told not to date documents; they were advised that they
could not change any of the conditions they were not happy with, were told 'just
sign them and the bank would fix them up'. The bank told them that if they did not
sign the documents that the bank would bundle the file up and send it to
Melbourne and then they could deal with Melbourne but would not get as good a
result. The proposition is that it was common. The allegation from my constituent
is that it was common for the ANZ Bank to send blank documents to them to sign
and then they would be filled in later. I am not trying to justify people signing
blank documents but this seems to me to be to be consistent with the type of
behaviour that the consumers group, the Banking and Finance Consumer Support
Association, described in their evidence. Does ASIC receive complaints of this type
about the Australian banking system?

Mr Kell: Not in any significant numbers. ASIC does hear these types of allegations
occasionally raised in public. It needs further information to pursue action than
those sorts of general descriptions you have just provided. If ASIC is to take an
action it needs specific evidence and that is not always forthcoming. No, ASIC does
not have widespread evidence presented to it of some kind of systemic criminality
of that sort, if that is how you characterise it, in the Australian banking system.

Senator CAMERON: No, I do not think I said systemic.

Mr Kell: In some ways I think that is what you are suggesting. Is ASIC getting a
lot of complaints about that across different banks, across different areas of that
sort of systemic behaviour? The answer to that is no.

Senator CAMERON: Whether it is systemic or not, the behaviour is not behaviour
that ASIC would tolerate in one incident if it was correct, would it? What role
would ASIC play in these types of allegations?

Mr Kell: It is difficult to comment without further information. ASIC does take
action—and I can give you examples—against lenders and brokers that engage in
unconscionable conduct. There was a case this year involving the Australian
Lending Centre. I would be happy to run you through that. It demonstrates where
ASIC does take action when brokers have sought to engage in actions that are
significantly detrimental to their clients and that is exactly the sort of thing ASIC
will take up if it comes across it.

Senator CAMERON: We would be happy to receive some documentation on that
rather than spend much more time on that issue.
ASIC assesses all reports of misconduct from the public for potential breaches of
legislation it administers.

ASIC's work before 1 July 2010
Before 1 July 2010, the States and Territories had primary responsibility for the
regulation of consumer credit under the Uniform Consumer Credit Code (UCCC). At
that time, ASIC had a more limited role in relation to the regulation of credit through
the prohibitions on unconscionable conduct and misleading and deceptive conduct

20 September 2012 Page 5 of 11

contained in the ASIC Act. As noted in our response to question 1, there are also a
number of legal complexities in cases concerning unconscionable conduct. Nevertheless
ASIC was active in the industry during that period.

While not the primary regulator of consumer credit, ASIC identified risks related to low
doc loans arranged by finance brokers on the fringe of the market in its 2008 Report
Protecting Wealth in the Family Home: An examination of refinancing in response to
mortgage stress. This report was referred to in the Government's 2008 green paper
setting out options for Commonwealth regulation of consumer credit and subsequently
informed the Government’s development of the responsible lending requirements in the
National Credit Act which commenced in July 2010.

In addition, ASIC did previously take enforcement action under the ASIC Act in
relation to unconscionable conduct and misleading and deceptive conduct. Below are
some examples of this enforcement activity.

Australian Lending Centre
In 2010, ASIC commenced proceedings in the Federal Court of Australia against
Australian Lending Centre Pty Ltd (ALC), Sydney Lending Centre Pty Ltd (SLC), and
Christopher John Riotto in relation to loans brokered to five clients between 2005 and
2008. ASIC also brought proceedings against a lending company also controlled by
Riotto, AMR Investments Pty Ltd (AMR), alleging that it engaged in unconscionable
conduct in relation to the loans.

On 3 February 2012, the Court found that in four of the five cases, the companies
engaged in unconscionable conduct by having clients sign broking contracts for
business loans when they knew that they wanted personal loans. The Court also found
that on two occasions, the companies engaged in misleading or deceptive conduct by
representing to lenders that the loans were for business purposes. The practical effect of
this conduct was to remove important consumer protections provided by the Uniform
Consumer Credit Code (UCCC) – which applied at that time.

The Court also found that the loan brokered for one of the clients was unconscionable
because it was secured over his house and the relevant broker (ALC) knew that he could
not afford to make the repayments. The Court also found that brokering such a loan
was, in itself, unconscionable conduct.

In relation to the fifth client, while the Court found that the loan was accurately
categorised for a business purpose, the Court nonetheless found that there had been
unconscionable conduct because the client, a pensioner, suffered from a clearly
identifiable mental disability which the companies exploited by having him sign a
broking contract and loan with an interest rate of 5% per month secured over his only
asset, his home. The Court also found that the company which made this loan (the
related company, AMR) also engaged in unconscionable conduct, and that Riotto was
knowingly involved in these contraventions.

The Court granted an injunction restraining future similar conduct and awarded
compensation to one of the borrowers.

20 September 2012 Page 6 of 11

Shortly after the decision, the companies and Riotto appealed to the Full Federal Court.
However, they have now discontinued the appeal pursuant to a settlement which

 the imposition by ASIC of an additional condition on ALC’s Australian credit
licence, requiring ALC to appoint an independent compliance expert to conduct
reviews of ALC's business over two years; and
 ALC appointing an additional responsible manager to its credit licence.
For more information see media releases 10-112AD, 12-19MR and 12-203MR.

Kelvin Skeers
An early example of ASIC's work in relation to low-doc loans is the action taken in
2006 against Canberra-based mortgage broker Tonadale Pty Ltd and its employee Mr
Kelvin Skeers in relation to two low-doc loans Mr Skeers arranged for a client in
August 2004 and November 2005. ASIC alleged that Tonadale and Mr Skeers

 to the lender the borrower’s financial position in the application forms; and
 to the borrower what would be included in the borrower’s loan application forms.
In October 2007 the Federal Court declared that Tonadale and Mr Skeers, had engaged
in misleading and deceptive conduct and unconscionable conduct when the loans were
arranged and ordered that Tonadale:

 pay compensation to the borrower; and

 establish compliance, education and training programs.

On 28 August 2008 ASIC commenced criminal proceedings against Mr Skeers, alleging
that he knowingly used false accountants’ letters with the intention of inducing a lender
to approve low-doc loans for seven borrowers. Mr Skeers pleaded guilty and on 27 May
2009 was placed on a good behaviour bond for two years upon entering into a
recognisance of $5,000, and was also ordered to perform 240 hours of community
service over the next 12 months.

Following his failure to complete the 240 hours community service from his original
sentencing, Mr Skeers was resentenced on 1 December 2010 to 15 months
imprisonment, to be suspended after serving 5 months weekend detention and entering a
15-month good behaviour bond with a $2,000 surety.

See media releases 06-373, 08-36, 08-198 and 09-99AD for further information.

ASIC's current work
Since the commencement of the National Credit Act, ASIC has been very active in
responding to consumer concerns and seeking to ensure industry compliance through
guidance to industry, administration of the licensing framework, surveillance and
enforcement action.

From 1 July 2010 to 30 June 2012 ASIC has refused seven applications for credit
licences and 722 applications have been withdrawn.

20 September 2012 Page 7 of 11

In addition, since 1 July 2010 nine persons have been banned from engaging in credit
activities, and 14 Australian credit licences have been cancelled. These enforcement
actions have been taken for conduct both prior to and after 1 July 2010, including where
persons were convicted of fraud. ASIC has 17 current investigations concerning alleged
fraud or misconduct relating to information provided by finance brokers in loan
applications. In the majority of cases, these matters concern loan applications to ADIs
which have been identified and reported by industry.

As noted in our testimony ASIC has not identified widespread evidence of systemic
misconduct in the banking sector along the lines suggested by Ms Brailey. In response
to previous general allegations made by Ms Brailey ASIC has requested her on a
number of occasions to provide ASIC with any additional information and specific
evidence of falsification of documents in the banking sector. This evidence has not been
forthcoming. Following her testimony to the Committee, ASIC has again requested Ms
Brailey to provide any such evidence.

More recently, ASIC has received a number of letters from members of Ms Brailey's
Banking and Finance Consumers Support Association, Inc (BFCSA), some of which
raise general concerns about low doc loans and call for a Royal Commission, and others
which raise concerns about their own loan transactions. However, these letters generally
make broad allegations of misconduct and do not contain any specific evidence of the
alleged misconduct. We are therefore encouraging these people to provide us with
additional information and documents to assist us in assessing the matters.

We also understand that a number of BFCSA's members obtained loans from finance
broker Mortgage Miracles. The Western Australian Police has charged Mortgage
Miracles’ director, Ms Kate Thompson, with fraud offences in relation to her conduct as
a mortgage broker and it is understood that a hearing on whether Ms Thompson is fit to
stand trial is scheduled to be held on 12 November 2012.

ASIC identified loans promoted as low doc as an area for review, following
commencement of the responsible lending obligations, due to potential compliance
risks. Our initial report from this review, Report 262 Review of credit assistance
providers’ responsible lending conduct, focusing on ‘low doc’ home loans was
published in November 2011 and can be downloaded from our website. This report,
which focused on practices in the first six months from the commencement of the
National Credit Act, found that finance brokers were generally aware of the new
responsible lending obligations, with ongoing enhancements made to their practices and
procedures during this period as the industry sought to comply fully with the
responsible lending obligations. The report did however identify areas for further
improvement in industry practice and made a number of findings in this regard.
ASIC is currently reviewing how credit providers are complying with their responsible
lending obligations on loans that are promoted as low doc, and how credit licensees
with a large number of representatives are ensuring their compliance with the
responsible lending obligations.

Initial data suggests that credit providers' current lending practices are generally tighter
than those existing prior to the GFC and that the proportion of home loans which are
promoted as low doc has decreased significantly since the introduction of the
responsible lending obligations for authorised deposit-taking institutions in January

20 September 2012 Page 8 of 11

2011. Information from these reviews does not support Ms Brailey's claim that the
broker channel only sells low doc and no doc loans. Rather, information from these
reviews indicates that loans promoted as low doc are generally only a small proportion
of loans written by finance brokers and that there is a low level of complaint by
borrowers to credit providers alleging falsification of information on loan application

Irrespective of whether loans are promoted as full doc or low doc, the responsible
lending obligations under the National Credit Act apply, requiring both finance brokers
and credit providers to make reasonable inquiries into and verification of a borrower's
financial position. Although different types of inquiry and verification may be used
based on a borrower's specific circumstances (eg self-employment), some of the
practices common prior to the GFC would not likely satisfy the responsible lending
requirements. In this respect CP178 Advertising credit products and credit services
noted that credit licensees should consider whether claims about no doc type products
may be misleading or reflect practices that do not comply with responsible lending

Question 3 (Hansard Ref: p. 56)

Senator WILLIAMS: When you say you carefully consider matters that come to
ASIC in the way of complaints, I have a lot of problems with that. For four years,
complaints went to your office about the infamous Stuart Ariff and the way he was
robbing people. Now he is in jail where he belongs. The only reason you acted was
because it went to the media. I know people send you emails and complaints. I have
taken complaints to you myself. I want to take you through a couple. When a
receiver is sent onto a farm—and this is post GFC—does that receiver have the
right to sell the grain on that property if the bank does not have a lean on that

Mr Kell: I cannot answer that question right now. I will take that on notice.
Whether a receiver has a right to sell specific property will depend on the specific
provisions of the original charge/mortgage granted by a company and the specific
circumstances of any one case.
Receivers generally are very careful to avoid selling property not covered by the
security under which they are appointed.

A receiver exercising rights over property to which they have no rights would likely
give rise to a civil claim against them personally for trespass and conversion.
If ASIC receives a complaint about the conduct of a receiver, then ASIC would assess
the specific circumstances to determine whether to take enforcement action or whether
it may be more effective to use other regulatory tools, such as inclusion in our ongoing
pro-active practice review program to see if issues of competence or capacity need to be

20 September 2012 Page 9 of 11


Question 4 (Hansard Ref: p. 58)

Senator EGGLESTON: Have you met with any of the submitters who have been to
this inquiry, or their representative groups such as the Unhappy Banking group,
headed by Geoff Shannon?

Mr Kell: My understanding is that we have received complaints from some of
those individuals. As to whether we have met with them directly, I would have to
check. I would have to check as to the nature of our communication with them.

Senator EGGLESTON: It would help for the information of the committee if you
could give a list of the names and the individuals and the numbers.
Geoff Shannon met two ASIC staff members in person at ASIC's Brisbane office on 3
April 2012. As far as is known, ASIC staff have not met with any of the other
submitters to the inquiry, or any of their representative groups. ASIC's communication
with reporters of misconduct is normally by mail, email, or telephone.

ASIC has received seven reports of misconduct from persons who have made
submissions to the Inquiry that raise concerns similar to those raised by members of the
Unhappy Banking group. This number is higher than the four matters previously
reported to the Committee as it includes reports of misconduct by parties other than
Bankwest, such as the external administrators of companies, as well as a report of
misconduct by Bankwest which had not previously been identified as raising similar

20 September 2012 Page 10 of 11

Other questions raised at the hearing but not listed on the Committee's notification
letter dated 17 August 2012

Question 5 (Hansard Ref: p. 56)

Senator WILLIAMS: On the Bankwest problems, a receiver was sent in to a hotel
and sold up two hotels. The bank was paid in full, about $24 million, and a receiver
was paid in full, and $1 million was left over. The bank would not give the million
dollars back to the bloke who owned the pubs because that bloke was suing
Bankwest. The bank said they are going to keep the million dollars to pay their
legal fees in the situation with the bloke who is suing them. Is that acceptable
practice? When someone is cleaned up and everyone has their money, shouldn't
anything that is left over go back to the owner of the assets, when all creditors have
been paid and the receiver has left the operation?

ASIC: The answer to this question will depend on the application of the appropriate State or
Territory law (examples being the Conveyancing Act, Transfer of Land Act or Real
Property Act), general common law principles and on the individual circumstances of
each case (including by reference to mortgage documents, the nature of the dispute and
so forth).

Mortgagees and receivers ought to ensure that proceeds are properly distributed and if
there is a dispute about the proper distribution of surplus funds, it may be appropriate to
take steps to secure the money while the dispute is determined. For example, this could
include putting the funds into a joint interest bearing account or paying them in to court.
Question 6 (Hansard Ref: p. 57)

Senator WILLIAMS: Section 428 of the Corporation Act—selling assets at around
market value. When a receiver is sent by a bank in to a private home, a block of
land with a house on it, it is not a company. Does the receiver still have to abide by
the Corporations Act and section 428?

We assume that the section referred to is Section 420A rather than Section 428 of the
Corporations Act 2001 (Cwlth).

In terms of corporate receiverships, the receiver will be subject to s420A when
exercising the power of sale in respect of the property of a corporation over which the
receiver has been appointed.

In terms of non-corporate receiverships, there is not an exact statutory equivalent to
section 420A. However, some State and Territory legislation contain similar provisions
with respect to the receiver's duties when exercising the power of sale and, depending
on the circumstances of each case, these may be relevant.

An example is section 85(1) of the Property Law Act 1974 (Qld) which provides that
"It is the duty of a mortgagee…to take reasonable care to ensure that the property is sold
at the market value."

20 September 2012 Page 11 of 11

It is also relevant to note that receivers are governed by common law and duties such as
the obligation to exercise powers in good faith and for a proper purpose.

If ASIC receives a complaint about the conduct of a receiver, then ASIC would assess
the specific circumstances to determine whether to take enforcement action or whether
it may be more effective to use other regulatory tools, such as inclusion in our ongoing
pro-active practice review program to see if issues of competence or capacity need to be
addressed. However, ASIC is only empowered to regulate the conduct of registered
liquidators. Receivers appointed to corporate entities must be registered liquidators but
receivers appointed in a non-corporate context are not required to be registered

Question 7 (Hansard Ref: p. 59)

Senator EGGLESTON: .... The last matter I want to raise with you is that a
number of submitters referred to having to sign a deed of forbearance after
running into problems with Bankwest. The deed included a large fee, an interest
rate of up to 18 per cent and a confidentiality clause. Firstly, why are deeds of
forbearance necessary and what restrictions exist on what may be included in a
deed of forbearance? Secondly, in some cases the only way the negotiating position
of a borrower can be strengthened is through public exposure of the situation, such
as through the media. One must question whether a confidentiality clause is
appropriate in these sorts of circumstances. Would you like to comment on those

ASIC: A deed of forbearance between a bank and a borrower typically involves the bank
making a promise not to sue for the payment of money that is due and owing by the
borrower, provided the borrower gives some consideration, e.g. a sum of money, or
security or additional security for the outstanding debt. Such a deed will often be
entered into as an alternative to litigation.

A deed of forbearance will generally be in the nature of a private contract. Its terms
must be agreed to by both parties. As with other contracts, entry into a deed of
forbearance is subject to statutory and general law principles on unconscionability. A
borrower cannot be compelled to agree to the terms of a deed; but a failure to do so may
mean that the bank proceeds to litigation.

There may be legitimate reasons for both the bank and the borrower to have the terms of
a deed of forbearance remain confidential. Normally confidentiality clauses are not
framed in a way that precludes a borrower from seeking legal advice or taking legal
action where they are of the view that the deed of forbearance or any of its terms may be
contrary to law.


What's the penalty for misleading Parliament?

Interesting exercise:

I have on my table two small to medium Lo Doc Fraud loans which could and probably will evolve into 5 or 6 small Lo Doc Fraud loans - that is, if there is any justice in this Australian regulatory and EDR system. 

Then there are the dodgy credit card and finance company deals to be analysed ... around 5 of those to go through ...

That's from one borrower member of BFCSA alone.

Left to ASIC none of this would have been taken seriously. The borrower would be getting the royal run around. I know - we tested it on one really bad looking loan: go to the police - even though it was obvious that the lender had done the LAF alterations and invalidated a legal lending instrument.

That's ASIC - hit anyone BUT the bank!

How many "hidden" loans do you have from each of your current loans?

ASIC: be warned: BFCSA aren't fooled by this, nor will the Senators buy your efforts to minimise and distort the facts. You had plenty of paid time to do your homework. What's your excuse? 

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  • doyla66
    doyla66 Thursday, 18 October 2012

    I have had two rejects of action from ASIC over fraud considering the fact of the statement made by the chairman of ASIC:
    Mr. Greg Medcrafts public statement in ABC news on the Jun 1, 2011
    "To corporate crooks, I would say 'Don't rest easy'," he said. "Because if you've broken the law and we discover it or we're told about it, we will come after you."

    On a side issue I would like to know how of anyone that was placed into false bankurptcy by the banks brokers

    and on that issue how are you treated by the trustee. This tatic is used to stop any further legal fight and take your rights away.
    If the bank or broker was part of this false bankurptcy this is jailable offence.

  • doyla66
    doyla66 Thursday, 18 October 2012

    ASIC just keep on being the "Willbees" who will wait until someone else gets the ball rolling before they issue any statements that they "will be" looking into something/anything. It is because they are the "Willbees" that they are unable to actually be proactive in anything at all. ASIC simply want to jump in & join up once a party has started. These "Willbees" are simply gatecrashers at best.

  • doyla66
    doyla66 Friday, 19 October 2012

    Lying to Parliament is a CRIMINAL OFFENCE. The liars must be prosecuted. Justice must be upheld

  • doyla66
    doyla66 Friday, 16 November 2012

    If the bank or broker was part of this false bankurptcy this is jailable offence. Jail those corrupt bankers & brokers.

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