BANK VICTIMS CALL FOR "A ROYAL COMMISSION INTO BANKING PRACTICES" OF THE BIG UNCONSCIONABLE FOUR BANKS
More and More VICTIMS are coming forward, putting their stories on paper. The actions of the Big Four Banks so unconscionable and corrupt they have to be stopped.
This recent story of Philipp and Lynne Kreutzer, so clearly and blatantly shows how the NAB can do whatever they want to bring you down, simply because "they didn't want your sort of business" a successful business paying $340,000.00 dollars interest per year. You and your business are not safe with these preditors. They can do to you whatever they want. They can foreclose on you, even if you are not in default, they can make you default, they can ruin you. Simply because they can.
"NAB is a Corrupt and Criminal Organization that Masquerades as a Bank"
"THE PEOPLE WILL NO LONGER BE SILENCED"
NAB can take your home, even if you have never missed a payment. This is what the NAB did to Philipp & Lynn, a couple of hard working Aussie farmers.
Philipp and Lynne Kreutzer - THIS IS OUR STORY.
When, in 2011, the NAB began its campaign of bullying and intimidation against us, by manufacturing defaults and setting up predatory loans designed to fail, we had been loyal customers for over nineteen years. Over that time we had had more than twenty different loan facilities and accounts with the NAB. Not one had ever been in default. We had had a good relationship for many years with our local manager and trusted his advice.
In 1998 we bought land in Northern NSW and established an organic coffee plantation from scratch. Prior to this we had been country solicitors who had become increasingly disenchanted with the legal profession. Our families had farmed for many generations, so the change of career was not too radical a move. For fifteen years we toiled through the usual vagaries of farming - drought, flood and cyclones, planting and tending the trees, harvesting, processing, roasting and packaging coffee. We won over forty medals for our coffee and after about ten years hard work, our plantation finally began to break even. During the last three years that we owned the farm it had become a profitable enterprise.
In April 2011 we approached the Bank for an extension of $100,000 on any one of our numerous facilities. We needed this money to undertake renovations and to cover the shortfall in income that we expected when a rental property we owned became vacant. We estimated it could take up to twelve months to find a replacement tenant due to the nature of the property and the depressed market. In fact we found a new tenant just on the twelve month mark.
The Bank agreed to lend us the money, but only as a new loan and only for effectively a five month term, upon which it had to be repaid in full. We told the Bank we didn't believe it was possible for us to meet this short time frame and again requested that any of our existing mortgages be extended by the $100,000, as all had ample equity. Failing that, we asked at the very least that the Bank give us a twelve month term, as we felt confident we could meet this time frame to repay the loan. The Bank refused, and as they held all our properties as security, we couldn't raise the money with any other lender. Unable to negotiate more suitable terms and needing the capital, we accepted the only offer on the table. We hoped that things would work out and we could sell the properties as demanded, or at the very least that NAB would renew the loan after five months expiry date when they saw that we had continued to maintain all our loans in order.
When we went to sign the mortgage we discovered that the Bank had included all our other properties as security for this $100,000 loan. This was inappropriate and unnecessary given that the combined value of these properties was some eighty times the amount of the new loan. We had not agreed to this, but once again the Bank would not negotiate with us. As this loan was a consumer loan and was regulated by the National Consumer Credit Protection Act (NCCP), it was a breach of that Act for the Bank to lend money unless it had determined the loan was "not unsuitable." This loan was clearly not suitable to our circumstances and we told the Bank we didn't think we could repay it in the short period the bank was insisting upon. There were a number of suitable alternatives but the Bank refused all of them even though their position would have been as equally protected. Additionally, the Bank had included our principal place of residence as security, which is prohibited by the NCCP Act.
In retrospect it is clear that NAB were setting us up for default so that they could use this predatory loan to seize all our assets.
Then in December 2011, without any warning or statutory notice, (as required under the NCC), NAB sent us a letter informing us that it had commenced recovery proceedings against us for all money owed i.e. $4,000,000, not just the $100,000. Most of the loans were ten or more years old and had been used to buy the farm and establish our coffee business and to purchase several investment properties. This had been done with a view to providing for our retirement down the track, as we had no superannuation. We had not been irresponsible with this borrowing and had always been able to service the loans and had never missed a payment.
The Bank gave us no prior notice it was about to take this action even though a few days earlier we had met with the new branch manager to discuss amalgamating several loans in order to obtain a better rate of interest. This letter was extraordinary in that it did not state why NAB was taking enforcement action, or what loans or amounts it referred to and the author, described as a "senior legal counsel" did not provide their name or contact details on the letter (which is a breach of the Legal Practitioners Act) so we could not contact him / her and ask why such a distressing letter had been sent. I emphasise again, that not one payment had ever been missed, and we were paying the Bank more than $340,000 per year in interest.
NAB also sent this enforcement letter to my elderly parents who were co borrowers in relation to two of the investment properties we owned jointly. My parents were in their late seventies and, as could be imagined, were extremely distressed to be told that the Bank was taking action against them when all their loans were, and always had been,in order. The Bank also sent this letter to our former legal practice, which we had sold some fifteen years earlier. This firm did not even have loans with NAB and had no ongoing connection with us.
When my father rang the local manager to find out what was going on, he was told that all his loans were in order. The manager wouldn't tell him why the Bank had sent him this distressing and false letter. During the conversation with my father the manager told him that my husband and I could not afford our loans, which was not only false and defamatory but also a breach of our privacy. The NAB has never withdrawn this letter or apologised, even though it was sent to people who either had no loans,or had loans that were completely in order and which the manager said no action was being taken.
When we telephoned the manager to ask why this letter had been sent, she told us that it was probably "just a hurry up" as the Bank would like to "encourage" us to sell up and pay back our loans. When asked why, she replied that the Bank no longer wanted "our sort of business," which we took to mean agri-loans and small business loans.
The FOS case manager also confirmed this same sentiment. Apart from describing what the Bank was doing to us as akin to “crushing a walnut with a sledge hammer,” he also said that the Bank’s actions were "nothing personal, it is just that the Bank does not want to support your category of loan anymore." I can tell you, from our perspective it is very personal when a Bank bullies, intimidates, and defames you in order to frighten you into paying back all money on threat of it seizing all your property.
We now believe that this enforcement letter is a "fake" in that it was sent to us and various people associated with us, in order to embarrass, bully and intimidate us into repaying debt that the Bank could not otherwise legitimately call in. Section 2.2 of the Banking Code of Practice requires the Bank “to act fairly and reasonably in a consistent and ethical manner, considering our conduct, their conduct and the contract between us.” Given the Bank had not in fact commenced action against the recipients of this letter as claimed and hadn't sent the statutory notices, or given the minimum 30 days to rectify any alleged breaches as is required under the NCC, it is clearly in breach of the Code.
It could also be argued it is also a breach of the Crimes Act 1900 NSW s.192 G, in that the Bank intentionally wrote a "false and misleading" letter with "the intention of obtaining a financial advantage or causing a financial disadvantage." The Bank later admitted to Legal Services Commission (LSC) that many Bank solicitors had used this pro forma letter over a long period. We therefore believe it has been used as a tool to intimidate and frighten other people into selling and paying back loans they should not have had to. This would not be the first time NAB has been caught out using these tactics. Fairfax journalist Nick McKenzie exposed similar behaviour in October 2010 in an article titled “Revealed NAB’s dramatised debt collection tactics" - http://bit.ly/1zl0csg.
When we argued that it was unreasonable to expect we could sell everything immediately, given the economic downturn and poor state of the property market and that we needed more time, the Bank manager told us it was out of her hands as our file was now with the enforcement section. We asked to speak to the author of the letter, she refused to tell us who that was or even what state it came from. We then wrote to the Bank, protesting that it was unconscionable to call in our loans when we were not in default. NAB's response was to begin manufacturing defaults in order to justify their action.
This started with appointing valuers to revalue our property at considerable expense to us, in order to try and trigger the loan to value default provisions. However even though valuations came in very low, they still showed our equity was more than sufficient to support the loans. Having failed to trigger default by revaluation, NAB next resorted to cancelling the automatic payment authorities without telling us, causing our loans to not be paid automatically from our accounts. This technically put us in default until we realised what had been done and we rectified it by paying the interest manually.
Next NAB claimed our income to loan ratio was insufficient to support the loans. We challenged the Bank to show that this was the case. The manager came back with a spreadsheet that misstated our income to be $120,000 less than we were actually receiving and showed interest that was more than $75,000 higher than we were paying.
Despite us providing accountant's statements, bank statements and tax returns to prove the true position of our finances, NAB refused to correct the mistakes.
Finally NAB said it didn't matter what our financial position was anyway as they were going to rely on clauses in our mortgage contracts that allowed them to call in loans at anytime without cause. At this point they also began to impose "penalty interest" (their term) upward of 20% on several of our facilities.
Banks are not entitled to charge penalty interest; the Bank can only charge a default interest rate where it is a legitimate pre-estimate of the extra cost of administering an account that is in default. In our case the manager told us the penalty interest was being charged to encourage us to sell quickly.
We lodged a complaint with FOS and during the conciliation conference the Bank manager conceded that she had breached our privacy in discussing our personal finances with third parties and apologised. However, in an attempt to justify its actions against us to the FOS, the Bank dishonestly claimed we had been in default on four separate occasions. Of these, two related to a Council Bond taken out by us and four other people. The Bank concocted a story that the Bond had expired and they were not going to renew it. This was a total fabrication as it had no expiry date and had always had been in order. The other two involved an overdrawing of our personal account by a matter of $300 following overnight payments of a private health insurance premium and a car lease payment. Both were remedied the same day.
It is important to note not one of these trumped-up “defaults” actually related to any of our fourteen loan facilities and therefore they were not defaults at all. When we proved the dishonesty of this claim NAB simply backed down. However it refused to withdraw its demand that we sell everything and pay back all loans. By the time of the FOS conference we had already sold two properties and had paid back four loans including the $100,000 referred to above.
As a result the Bank had agreed to give us to the end of the financial year to sell the rest, including the farm. However, at the conference the Bank went back on this written agreement and reduced the time to only three months (which included the Christmas/New Year period) in which to sell or hand them over with vacant possession.
Again, this was totally unreasonable given both the state of the property market where we lived, and the time of year, but also because our commercial properties had tenants with registered leases, so even if we had wanted to give the Bank vacant possession, we legally couldn't. Then - when we did replace the tenant that had vacated, the Bank refused for several months to consent to the lease.
These unreasonable demands and actions reveal the NAB's unconscionable intention to cause as much financial harm to us as possible. We were only able to make repayments because we received income from tenants and from our coffee business. Causing us to abandon the farm and coffee business and to remove tenants who paid rent, and hand these properties to the Bank vacant, would leave us without any income and would severely impact on the value of those properties.
NAB wanted to put us in a position where we had no income or resources and therefore could not fight them. Then, once they had run the debt up sufficiently by employing huge penalty interest charges, while letting our farm to deteriorate and business to become non-existent, they could sell the properties cheaply, taking all the proceeds and probably bankrupting us in the process.
We believe we were targeted as we were in a category of farm/ small business loans that NAB no longer wanted and we had assets that the Bank could seize. How we had conducted our accounts for decades, our fiscal responsibility and our long relationship with the Bank,counted for nothing.
As concerning as NAB's behaviour is, it has been the willful blindness of the agencies such as FOS, ASIC and Legal Services Commission (LSC) and their failure to apply or enforce the law that has been the biggest shock of all.
These agencies have resolutely refused to take any action against the Bank, providing various excuses including: that there was no proof that the behaviour we complained of was "systemic" (ASIC); or excusing it as simply the
Bank making "commercial decisions" (FOS); or refusing to act on the basis "we do not act for individuals" (ASIC); or excusing the Bank's lawyer from being accountable for breaches of the Solicitors’ Rules because every lawyer at the Bank had been doing it, and not one of the dozens of senior lawyers working there knew it was a breach and now it has been bought to their attention they promised not to do it anymore, (LSC) and finally, that we should simply seek other avenues of redress (ASIC, LSC).
None of the Agencies provide any right of independent appeal or review and therefore they can get away with blatantly protecting the NAB, safe in the knowledge that no one will call them on their bias.
As a result of NAB's actions we have been forced to sell our farm at a heavily discounted price in order to meet the Bank's unreasonable deadline on threat of repossession. The coffee business and income that we spent fifteen years establishing, along with all the stock and equipment has been lost, as it had to be included in the farm sale at no extra cost, in order to induce a quick sale. We have also disposed of two other properties in the depths of the property downturn at fire sale prices to meet unreasonable time frames. The Bank took the entire proceeds of these sales and would not even allow us to retain enough to cover the capital gains tax that was payable.
NAB now has the audacity to claim that all the property they forced us to sell at under threat of repossessions were sold "voluntarily" and therefore any loss to us a result cannot be blamed on them. The sheer magnitude of the dishonestly is breathtaking.
As the Bank does not communicate with us we don't know what their next move will be, or when. We have refinanced half the remaining debt but still have three loans with the NAB. While these are all in order, we now know that means nothing. The NAB's unconscionable and predatory actions have been emotionally and financially devastating, but we fight on.
All banks want their victims to believe the circumstances they find themselves in as a result of predation is entirely their own fault, thus silencing them through fear and embarrassment. This, together with the insidious practice of having anyone and everyone they can sign confidentiality agreements, has been very effective in hiding bank malfeasance. But as Bank Reform Now founder Dr. Brandson says, "the jig is up."
We all need to speak up, to expose the corruption, greed and fraud. Together we can make enough noise that won't be silenced until the system is transformed.
Thank you for taking the time to read our story. We hope it helps to bring about changes that will help everyone.
Regards and good wishes for a successful New Year,
Philipp & Lynne
This story was first shared on Bank Victims Face Book page by Paul Herman NAB Fraud Fighters
Bank Victims Founder: Thank you Philipp & Lynne, for letting the Australian people know what the National Australia Bank is still doing to the Australian people.
I am ashamed to say NAB is an Australian Bank.
This year will be the year the NAB is made accountable to it's many Victims.
Ph: 1300 366 923
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Suzi Sunday, 15 February 2015 05:12 Comment Link
I am not shocked to hear of your issues. I too have a case against the Commonwealth Bank and a business loan (but no where near the size of your issue) FOS found them Guilty of maladministration but FOS made many mistakes themselves and refuse to rectify those mistakes. The bank are now about to foreclose on me again. I also believe the valuations on my property prior to the loan were inflated and then severely deflated when it was sold in a "fire Sale" . Again ASIC refuse to investigate what I believe to be Unconscionable conduct by FOS and well the Commonwealth Bank continue to get away with wrong doing. I thank you for sharing your story and hope you reach a positive outcome.Report
Barry landa Monday, 05 January 2015 08:40 Comment Link
Phillip and Lynne you have been banking with nothing less than thugs .....how dare they? .....this can only be fixed by presenting our cases before a Royal Commission .....they the banks and finance companies are allowed to break financial laws with impunity and the law and courts support it ......so does the Abbott and Hockey government ......it's unconcionableReport