National Australia Bank has been caught charging an elderly blind farmer from rural Victoria 28 per cent interest rates on his mortgage. The punitive charges were more than 25 per cent above the Reserve Bank cash rate for the past two years, and even beyond credit card charges, at a time when the region of Northern Victoria, where he grows peas, wheat and other grains, was affected by drought.
Since 2014, he accrued more than $1 million in interest charges on his $1.8 million loan.
The farmer, who spoke to the author on condition of anonymity, has since negotiated a settlement with the bank via advocacy service Unhappy Banking.
Before a settlement was reached, the bank declined to comment on the matter except to say, “To respect the privacy of all parties we are unable to comment on the specifics. We will continue to work with the client on this matter.”
On the farmer’s bank statements — those pertaining to $1.8 million in loans at rates of 28.12 per cent and 27.37 per cent — there is no mention of “default” or “penalty” rates. He had previously been paying 15.87 on a default account for a loan facility of around $400,000. Subsequently, in 2014, the NAB rolled his loans into a “matured facility account” for $1.8 million, whose interest rates started at 28.12 per cent.
As part of his dispute resolution, the farmer recently asked the bank for his loan documents and these were duly provided. However, he told the author on August 8 that the interest rate figures on the statements had either been removed or omitted.
After complaining earlier this year about the usurious interest rates, the bank lowered the interest charges to 17.37 per cent.
The NAB has since promised to apologise to the farmer and to refund the additional interest charges, which it said were incurred “in error”.
This is not the first time NAB has charged its borrowers in excess of 20 per cent interest. In the controversial case of Cubby Farm, the largest irrigation project in the Southern Hemisphere, the bank charged 35 per cent.
Read the bank’s full statement on the matter:
Thanks for your email and for your interest in this matter.
I can confirm that the interest rate charged was an error, and it should not have been charged at that rate.
We have refunded the amount to ▓▓▓ ▓▓▓’s account. This was processed late last week and has been communicated to Mr Shannon who is representing Mr ▓▓▓ yesterday.
We have been and will remain in communication with Mr Shannon about this issue.
This should not have happened, and we will be apologising to Mr ▓▓▓ for the error.
We will be meeting with Mr ▓▓▓ face to face to offer our sincere apologies for the error and for the delay in rectifying the error.
This was a mistake, and we have rectified the matter and do sincerely regret any anxiety this has caused Mr ▓▓▓.
Thanks for your email Michael, and for your ongoing interest in this matter.”
Michael West is a Walkley-award winning journalist whose work exposing multinational tax avoidance led to last year’s Senate tax inquiry and subsequent tax reforms.
This Article first appeared in newsdaily.com.au
Author: Michael West