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BFCSA: Ombudsman says there had been a doubling in disputes about "maladministration in lending" since last report

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Did the bank bashing work? Disputes fall 11%

Date October 23, 2013 - 8:04PM

Clancy Yeates

Macquarie topped the dispute rates in home loans and credit cards.

Disputes between customers and their banks have fallen for the first time since the global financial crisis, new figures show.

On Wednesday the Financial Ombudsman Service said in its annual report that the number of disputes had fallen 11 per cent to 32,307 in 2012-13, bucking a steady climbing trend since 2008-09.

Falling interest rates, changes to banks' hardship programs and new rules on flood insurance cover all helped to drive the decline, the industry-funded umpire said.

In line with previous years, 70 per cent of disputes were resolved after customers reached an agreement with their financial institution, without the need for the ombudsman to make a ruling.

Home loans and credit cards were at the centre of most disagreements between customers and banks, and in each of these areas Macquarie had the highest dispute rates.

In mortgages, where Macquarie has been expanding aggressively, the bank averaged 285.5 disputes for every 100,000 customers.

The lenders with the next highest ratios were a mortgage manager called Over Fifty Seniors Equity Release, with 252.5 disputes per 100,000 customers, and GE Personal Finance, with 244.1 disputes.

Among the big four banks, NAB had the highest ratio for home loans, with 74.7 disputes for every 100,000 customers.

Macquarie also topped the complaint list for credit cards, with 50.3 complaints for every 100,000 customers.

The chief ombudsman, Shane Tregillis, said a key reason for the overall improvement was a 22 per cent fall in the number of disputes caused by financial hardship.

“This appears to be a result of the improvements by the major banks and other financial service providers to their financial hardship programs over the last few years following the changes introduced under the 2010 National Credit Code,” he said.

Lower borrowing costs also played a role. Official interest rates also fell by 0.75 percentage points in the year to July, cutting repayments for financially distressed borrowers.

Disputes about insurance cover for natural disasters also fell significantly, a trend the ombudsman said had been affected by the federal government's decision to introduce a standard definition for flood cover in June 2012.

Despite the overall improvement, the ombudsman said there had been a doubling in disputes about "maladministration in lending" – which includes cases where mortgage brokers put inaccurate information in home loan applications without the knowledge of the borrower.

It could not explain the jump, but said there had been increased media coverage of the issue in the past year.

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Comment by Change - To all Brokers - you had been warned a number of times by Denise Brailey.  You are being set up as the "fall guys" for the banks -

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  • doyla66
    doyla66 Thursday, 24 October 2013

    This story exemplifies the problem with statistics.
    People could come away with the impression that the Banks are doing a better job.
    Maybe they are. Not in our experience. They're still making up stories for the FOS cases, against our raw truth and evidence.
    These stats create so many questions in my mind.
    Then we learn there was a doubling of "maladministration" cases - which the Ombudsman couldn't explain ... as if!
    The only place the Fraud Cases could go may have been "maladministration"? - a possible explanation.
    People woke up and realised they'd been fooled and conned by the Australian lending industry for long enough? - an other possible explanation.
    And then the nasty little sting - brokers put wrong information on the loan forms.
    But ASIC said 97% of brokers were ok - only 3% had to be dealt with.
    Logically that 3% must have written one heck of a lot of dodgy business to account for so many extra "maladministration" cases ...
    No mention of the Bank staff who created "errors" in the documentation?
    Or the number of unaffordable loans approved?
    And the number of agreed outcomes with Banks ... how many of those resulted from harassment and threats from the Bank to the point where the borrower couldn't take any more and gave in?
    And what of the agreements which were unenforceable because FOS had lost its teeth? such that even after the agreement was reached the Bank started in on the Borrower again!
    Or the borrowers who sold up because of the stress and the fact that they couldn't afford a proper lawyer to protect them?
    Stats, disinformation, misinformation, spin, hype and selective facts. If you don't ask for it you don't get it. And if you don't get it you can measure it ... or improve it ... and so on ... one of the oldest tricks in the book ... "need to know"
    This data must be unpacked to find the real story behind it.
    FOS does deserve recognition for participating in the Bankster-Borrower endurance race ...
    I hope FOS read Denise's submission (#156) - it may assist them to understand why all these "maladministration" cases suddenly turned up ...
    Looking forward to the Inquiry

  • doyla66
    doyla66 Monday, 28 October 2013

    Statistics are far to easy to fiddle. Of course FOS would need to show that they are indispensable. Lets see the real figures. We have all seen the misrepresentations that have gone on within our own Lenders institutions, how we have been manipulated and taken advantage of, so why would we expect anything but the same misrepresentations to come out in the FOS's reports. Same as the unemployment data, work 2 hours a week and you are considered as employed. That really is some kind of a joke.!!!! Heaven help us. Just what categories have FOS slotted their data into maybe miscellaneous or pests because it is just to hard!!!!! or maybe FOS are afraid that the truth will come out and will see the walls come tumbling down around the FOS and the banksters.

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