Once again the Office of the Banking Ombudsman strikes with all the power of the wettest of bus tickets…
All we can do is continue to push back…eventually the weak link will give way…
I am concerned that the best time-frame your “Early Resolution Team” can deliver is three months, more so when ANZ is already trying to forcibly sell my home now.
Further, for the record, your office did not respond to my last complaint. You did not comment on the evidence presented to you of:
– ANZ’s quite deliberate deception and obstruction, including the blatant fabrication of evidence.
– ANZ’s acceptance of guarantees as forms of security enabling its obligation of disclosure under the Code of Banking Practice.
– ANZ’s reckless lending and failure to ensure, under the Code, that the – borrower was reasonably able to repay the loaned amounts.
– ANZ’s statements that it did have an obligation of disclosure, especially where additional lending might cause the guarantor to reconsider giving the guarantee or where that lending was outside the purpose for which the guarantee was originally given.
Even when directed by the chair of the Banking Ombudsman Scheme to review this case, your office deliberately restricted that review to the process and not the issues raised.
You have attempted to deflect inquiries to government agencies like the Privacy Commission, Commerce Commission, etc but in each case, these government agencies have referred the matters raised back to you.
Unfortunately for the banking public of New Zealand, your office remains the primary watchdog against predatory bank practices. It beggars belief that even after the two reports released by the FMA and Reserve Bank on banking culture and conduct (Bank Incentive Structures, Bank Conduct and Culture, that your office remains on protecting offending banks from the consequences of their poor conduct. It is the failure of the Banking Ombudsman Scheme that has allowed banks in New Zealand to take advantage of the vulnerable and disadvantaged.
Tenders for my home closed on Friday night and, as I understand it, there was only one response and that was a very low offer i.e. less than the adjacent property that sold a couple of months ago but which is not much more than four hectares of blackberry and a small totally non-compliant residence – compared to a fully compliant three-bedroom home, with a large garage, sleep-out, and sealed driveway on thee hectares of regenerating native bush…
Pretty much what we expected. ANZ is terrified of media coverage exposing its reckless lending and the deceptions it employed to cover it up. In a desperate attempt to shield the forced sale of my home from such attention, it cancelled the well-subscribed auction on 8 November in favour of a less favourable tender process. Many buyers who will happily bid at an auction will not submit a tender proposal because they see it – rightly – as carrying more risk than an auction.
ANZ can accept this low offer – and lose even more. It could reschedule the auction it so untidily cancelled on 8 November – after a suitable period of remarketing. It could accept that this is not going to get any better, cut its losses and make right the damage that it has dome over the last fourteen years…
So, here we are ANZ, Plan B worked no better than Plan A. Your sole response won’t come anywhere close to the amount of money that you are demanding as a result of your unchecked and reckless lending processes, your total and blatant disregard for the obligations placed on you by the Code of Banking Practice.
Maybe it’s finally time to do the right thing, to cut your losses and make good the damage you have done…?
In other news, thank you to every one who called or messaged to give the Banking Ombudsman a nudge on Friday. I think that we can safely say that the message was received. While the Banking Ombudsman was too busy to make a simple call to ANZ to query its tender process under its fair, reasonable, ethical and consistent obligations in the Code, she did find the time to call me twice, and then my lawyer to complain about it.
Unfortunately this is a bed entirely of her own making. If you are going to be a watch dog, you need to be able to bark, not whimper and wag your tail. An agent of the Office of the Banking Ombudsman should enter a bank to the tune of the Imperial March not Here Comes the Sun.
I have been to the Banking Ombudsman three times: 2014, 2016 and 2018…and each time been totally underwhelmed:
Where we provided a legal opinion that ANZ erred in not informed me of the additional lending, the Banking Ombudsman did not explore this further because ANZ disagreed.
Where we requested a review of my case through the chair of the board of the Banking Ombudsman, the QC appointed to that review was specifically constrained to only consider the process followed and NOT the issues raised.
Where we provided evidence of quite blatant obstruction and deception on the part of ANZ New Zealand, the Banking Ombudsman was silent.
ANZ has an obligation under the Code to ensure that any body borrowing money from it is reasonably capable of repaying the loaned amount plus agreed interest. ANZ did not do that with this lending. The Banking Ombudsman would not comment..
The Banking Ombudsman attempted to deflect complaints to government agencies like the FMA, Privacy Commission, Commerce Commission etc. Each agency has responded that it considers the Office of the Banking Ombudsman to be the most appropriate agency for investigation and resolution of these and similar issues. While I tend to agree with the Banking Ombudsman’s logic on this, the Government, at this time, does not.
ANZ has desperately clung to the Banking Ombudsman’s findings as its sole defence against my challenges. Sometimes we wonder if anyone at ANZ has actually read those findings in the context of the actual complaints and whether its “the Banking Ombudsman says” mantra has always worked in the past to keep the light at bay…
Sooner or later, the Banking Ombudsman will need to review her position on these issues. They will not bear up under the light of increasingly public scrutiny…
Damned if you do, damned if you don’t…maybe the Banking Ombudsman is in a limbo similar to my own at the moment…
While everyone seems to accept the findings of the reports, no one yet seems to want to ask the questions around making it right. ANZ New Zealand posted a profit of $1.99 billion in the last twelve months, that’s around $5.4 million dollars a day – profit! Should ANZ be required to allocate a proportion of its profits to making it right for the New Zealander who, to be blunt about it,have been screwed by the greed of ANZ and other banks? ANZ was quite happy to incentivise and pressure its staff into making sales that should never have proceeded and now it needs to make this right.
In 2004, I guaranteed my partner’s company for a house for our daughter when we moved away. That property was sold in 2005 and I thought nothing more of it. At the same time my partner was recovering from a serious head injury. When she was working her income was less than $50k a year and income from her company was limited, less than $10k a year. Still ANZ, from 2005-2009, extended credit to her that, by the time I found out about it at the end of 2013, had accrued to $408k. I don’t not believe that she is responsible for her actions in this period. If I did, then I would be taking the appropriate actions.
When I challenged ANZ over this, it said that it had no authority to discuss this with me. That was not true: the loan documents include a specific clause enabling disclosure to guarantors and the Privacy Commissioner also ruled in 2012 that this sort of information can be considered personal information for the guarantor.
ANZ said that the Credit Contracts and Consumer Finance Act (CCCFA) prevented it disclosing this information.Again, this is untrue: this Act only applies to personal lending and does not mention company lending at all.
To support its position that guarantees are treated differently that security, ANZ then made up information that it attributed to the Code of Banking Practice. Even if that Code did say that, ANZ’s guarantee and loan documents clearly define security as including guarantees.
Under the Code of Banking Practice, ANZ has an obligation to only extend credit if it is satisfied that the person borrowing the money can reasonably pay it back. Under the same Code it also has an obligation to tell people who have offered guarantees and other security of new or additional lending against that guarantee or other forms of security.
The Code also includes a general obligation for banks to act fairly, reasonably, ethically and consistently. While we might agree that they are consistent in their conduct towards customers, the recent reports from the FMA and Reserve Bank find that ANZ et al fall short in acting fairly, ethically and reasonably. Who will hold them to account for their actions?
The reports find the regulatory frameworks in New Zealand for banking are weak. In part this may be due to gaps in legislation and culture of ‘not our problem’ – have a look and see how many government agencies with a regulatory output have more content on their websites about what they don’t do versus what they actually do. From my experience with these agencies, this is largely due to inadequate leadership and an unwillingness to get into the fight. Nowhere is this more apparent that within the Office of the Banking Ombudsman. Although not part of Government – something I hope you will consider changing – this office should be the primary watchdog to safeguard ordinary New Zealanders against predatory banks like ANZ.
In November 2016, I submitted a detail complaint (attached) with supporting documentation to Office of the Banking Ombudsman which initially rejected it out of hand. After three months, it produced a single page response (attached) that did not address any of the issues raised. Acting on advice from the Office of the (real) Ombudsman this year, I submitted a complaint to the chair of the Board of the Banking Ombudsman. Although she did appoint a QC to review my case, he was specifically limited to only review the process applied by the Banking Ombudsman and not the actual issues raised.
ANZ was scheduled to forcibly auction my home on 8 November.I cooperated fully with the real estate agent as, if the sale proceeded, it was in my best interests as much as ANZ’s for the auction to achieve the best possible result. That auction was cancelled an hour before it was due to proceed. I believe that ANZ did this to prevent 1 News screening a story on the auction that night. ANZ did not communicate with me at any time to advice of the cancellation, the reasons for the cancellation or what would be happening next. A week later, the real estate agent called me in tears after she had found out my home was instead to be sold by auction. I don’t believe that I was meant to know about this til it was a done deal. That tender closes 4PM Friday 30 November.
There is probably not much that can be done to deter ANZ from its course this time. Like most bullies, the only things that put it off are a good hard punch to the nose, or being publicly embarrassed. To that end, if you would like to help, please do not go off and punch a banker. Instead, you might wish to ask the Banking Ombudsman or ANZ if they would like to offer some comment on the issues raised in the attached complaint (sorry, it is a bit chunky as there are a lot of issues) or ANZ’s conduct since I first challenged it in 2013 (yes, five years ago) and over its conduct of the tender.
Contacts for the Banking Ombudsman are Nicola Sladden firstname.lastname@example.org for the chair of the Board, Miriam Dean email@example.com. Unfortunately I do not have any direct contacts with ANZ other than to direct you towards its totally inappropriately named Customer Financial Well-being Unit.
Longer term, please consider how best predatory corporates like ANZ New Zealand can be held accountable and required to make good, as best they can, the damage their greed has done to so many ordinary New Zealanders.
My suggestions are that we
bring the Office of the Banking Ombudsman in as an arm of Government;
ensure that other regulatory agencies like the FMA and Commerce Commission are both empowered and energised to pursue errant corporates; and, most of all,
establish a Royal Commission to peel off the scab of banking in New Zealand. I do not believe for one second that the Tasman Sea is a barrier adequate to protect us from the behaviours now being exposed by the Australian Banking Royal Commission.
Throughout ANZ New Zealand has relied on the Banking Ombudsman as the linch-pin of its defence. It really needs a better linch-pin. The Banking Ombudsman (Nicola Sladden firstname.lastname@example.org) and the Chair of the Banking Ombudsman board (Miriam Dean email@example.com) have consistently avoided the issues at the core of this dispute.
All off the record, of course, like anything is ever really off the record, but I understand that some of Nicola’s responses to media inquiries have not been consistent with her formal findings in this case. Once the weak link goes…
These are the questions that Miriam and Nicola do not want to answer and that should be put to them:
ANZ New Zealand’s guarantee and loan documents include guarantees as forms of security. The Code of Banking Practice (until the May 2018 version) says that banks have to provide any party providing security of the details of any lending against that security. This includes
the annual interest rate and whether it may be changed during the period of the credit facility;
all fees and charges (including government charges and taxes);
the period for which the credit facility is available;
the repayment terms, including any terms relating to early repayment costs.
If banks take the Code of Banking Practice seriously – and it’s the Banking Ombudsman’s job to make sure that they do – why didn’t ANZ tell me about all the extra lending to my ex-wife’s company?
Why was the Banking Ombudsman not concerned when:
ANZ New Zealand said that it had no authority to disclose information to me – when it did have that authority and a previous determination by the Privacy Commissioner also said that it should disclose this information.
ANZ New Zealand made up information that it attributed to the Code of Banking Practice to support its position that it did not have to disclose details of additional lending to guarantors.
The Code says that ANZ New Zealand can only provide credit or increase credit limits when the information available to it leads it to believe the customer will be able to meet the terms of the credit facility (that means, repay the loan). The Banking Ombudsman has held banks accountable under this obligation in its case notes.
Why didn’t the Banking Ombudsman consider this obligation when ANZ loaned hundreds of thousands of dollars to a small company with a weekly income of less than $200 (that’s what ANZ New Zealand CEO Dave earns in about 8 1/2 minutes)?
The Code requires banks to act fairly and reasonably, in a consistent and ethical way.
Nicola and Miriam, could you please tell us how ANZ New Zealand’s conduct in this issue could ever be considered fair, reasonable or ethical? Yes, we might give ANZ New Zealand points for consistency but that’s not always a good thing. ISO 9001 just means you can do things badly all the time…
…and just as an aside, I think we can give ANZ New Zealand a great big ‘F for Fantastic‘ on each of those seven principles…