NATIONAL AUSTRALIA BANK/AFCA .

MY STORY. HOW I WAS TREATED BY MY BANK, AND THEN MY ATTEMPT TO MAKE THEM ACCOUNTABLE THROUGH AFCA ( AUSTRALIAN FINANCIAL COMPLAINTS AUTHORITY ) AFCA WAS SET UP BY THE GOVERNMENT AFTER THE BANKING ROYAL COMMISSION TO HANDLE FURTHER COMPLAINTS.

A LOT OF PEOPLE HAVE SUFFERED AT THE HANDS OF BANKS.

Did the commission really look at all the bank’s unfair dealings? I’d like to tell my story of how one of Australia’s leading banks treated me as a farmer, when my business operation was affected by the Global Financial Crisis (“GFC”). The fact that I had been their client for approximately 50 years, and my father 50 years before, counted for nothing. I was not the only one of their clients that received this treatment during the GFC leading up to 2014.

The bank acted unfairly and unreasonably, putting pressure on me to liquidate my assets at any cost, and far below their value, even at that time. They, of all people knew the extreme difficulty to sell assets in the property market created by the GFC. There was no confidence in the finance world, there were very few buyers for our assets, and the sales that I was forced to make, were a fraction of their value before the GFC. I was still made to sell buy my bank. The banks refusal to allow me to reinvest some of the proceeds generated from these forced land sales on our home property, to fund more subdivision, to make available more 100 acre blocks, that were indeed selling, ended the best chance I had to recover.

BANK’S CONDUCT DURING THE GFC.

My experience here, is about the bank’s handling of a long term agricultural client during the GFC. The bank gave me no opportunity to trade my way out in these very difficult times, instead choosing to rush into a fire sale. There was no support, no discussions about the propositions I put forward to trade my way out of this, no effort to assist me in my hour of need, and no duty of care to a long term client, only pressure to sell my assets or they would do it for me. They would have known it was an impossible task in this economic climate to sell an asset for any reasonable value, let alone putting time limits on sales they wanted achieved or they would appoint receivers. I dreaded those phone calls. My health deteriorated because of this. The pressure was enormous.

The bank willingly loaned money to me prior to GFC. This was done with their knowledge of my full operation for years, I had their approval and the approval of our financial advisers. The position we and many others found themselves in was not a result of reckless spending or bad management, in fact in my initial telephone conference we had with the bank, at our property homestead with my wife and I, and the local Townsville Branch manager and a phone link with their manager in Brisbane, he said, the position you are in, is not of your doing, it is not your fault, it is not from bad management or reckless spending. That’s how it started, after that, it was just pressure to sell assets, or they would do it.

We were willing to cooperate with them when we could, we accepted we had a debt, which we were having difficulty servicing at this time because of the economic situation in Australia. A situation beyond our control. We were trying every way possible to generate income and sell our assets. It was an impossible task made worse by the banks imposing penalty interest and continual pressure to reduce debt, and threats to foreclose. Prior to this, I was subdividing parts of our home property to make sales to reduce debt, as I was heading towards retirement. Now with this pressure from the bank, I was really pushing these sales, and they were happening. I was also selling cattle, machinery and anything we could to help pay bank interest and development costs for subdividing 100 acre lots. It was extremely stressful.

We were operating in a very depressed market and sales were slow and difficult, however the subdivision blocks were selling.

Initially the bank was letting me keep some of the proceeds from these sales in order to continue subdividing, they then changed their mind and took all the sale proceeds. This action ended any chance I had to recover. We were struggling, the bank knew we were struggling, but still they inflicted penalty interest rates on us of 15 and 16 %, resulting in massive amounts of interest to pay, and more pressure, and with running costs, we were unable to make ends meet. I cashed in insurance policies to live. We had sold all our cattle and machinery, and almost all the 100 acre lots we had title for. The plans were drawn up for 19 more blocks, Council approval and ready to develop, but we had no money to do this unless the bank let us keep some of the proceeds from these sales, we needed more 100 acre blocks to sell. We could see that this was the way to clear our debt, but we needed some funds from these sales, and more time. The bank refused our request to support this plan.

I was trying to sell everything, and found a developer who was interested in the Lot I wanted to subdivide into 19, 100 acre blocks, he made a written offer of $1.2 m to the bank for the lot. The bank refused that offer, and later after they called in receivers and auctioned it, they sold it to him for $700,000.

When they decided to foreclose, their reason was that they had given me enough time to bring the account in order. I had been to other lending institutions to try to refinance. This was eventually successful, and an offer was made to our bank. They refused this offer. The offer made at that time, turned out to be substantially more, almost a $1mil more than what they got from sales made by their receivers. When they decided to auction the homestead property and the Lot that I wanted to subdivide next, my solicitor and I pleaded with them to let us do this auction ourselves if it had to be done, if receivers did it the results would be heavily discounted. They refused and sent in receivers. The market was very depressed and probably represented about half the value before the GFC. Now with receivers auctioning the property it was a sign for bargain hunters and the result was another massive discount. The bank got valuations of Lot 2 and Lot 800, the home block and proposed subdivision block, they billed my account for this, but would not tell me what the values were. Advice was given by the valuer re the marketing to achieve the best result, this was included in the valuation, the bank ignored this advice and went straight to a forced auction which contributed to the fire sale result. The auction was handled badly with no documentation such as terms and conditions available until the start of auction, and they didn’t know what the reserve was so there was no negotiations that day. Receivers made sales from low offers in the days after the auction. The Homestead block and the block I had earmarked for subdivision sold for $1.65 m, (less the Receivers costs). A Herron Todd White valuations I got at that time for the two blocks they auctioned, was over $4 m. That same developer bought the lot with the plans for 19 more 100 acre blocks ready to subdivide for $700.000. ( he had previously offered the bank $1.2m ) and they sold the homestead block for $950,000, totalling less than half of the current HTW valuation. Two years later the developer had sold $2m sales, and all the other of the 19 blocks grossing over $4million in the next year and a half. This could have cleared the debt.

The bank acted like this GFC was the end of the financial world, and there would be no recovery. They had to recover as much of the debt asap, before these assets lost more value. They had no thought for their client. The bank did not follow good industry practice, no duty of care to their customer, even after such a long relationship.

Well what happened was that after they sold everything, the bank got it’s money back that they had lent me, but not all the interest and penalties they had charged me, and for me, I lost everything. Lost all my life’s work. My home, my property, all my investments, all my assets. Fifty odd years in agriculture. From Jackerooing after leaving school in the 1960 s, to eventually buying my first small property with my Dad, developing it then selling it for a profit, then doing the same to three more properties, developing a 1,300 acre sugar cane farm from my cattle land in the Burdekin, creating a 16,000 tree mango farm and packing sheds, sending fruit down south and flying fruit into Europe, all with this banks involvement. Over those years we both did well until times got difficult, and they let me down. They saved themselves at the expense of their long time client.

I needed support from my bank at this time, I expected it, but never got it. Australian banks were also put under pressure by the GFC, and needed assistance also, from the Australian Government (the taxpayer) to guarantee their viability. We gave them this assistance.

What caused our problem was beyond our control, like a natural disaster, I think the bank panicked and handled my situation, and many others very badly. Hard working people putting everything into their business. We deserved better from the banks. This situation we were in was so foreign to us, we looked on our banks as people we could trust, work with and support us through tough times like this.

We all know what happened, it wasn’t the end of our economy, the worlds economy recovered as it had done before, recovering from other crises,  Australia’s economy recovered. Cattle property prices reached all time highs, cattle prices went to all time highs. As I previously said, the developer who bought the lot from the receivers, the Lot that I planned to subdivide next did very well. The people who bought the other parts of my property, and our off farm investments did very well, purchasing for bargain prices. But I lost everything, thanks to my bank, my business partner who pressured me to sell at the worst possible time.

As well as loosing all my life’s work, I lost my best mate as a result of all this trauma, stress and pressure, my wife, when for the first time in our wonderful marriage, she indicated she was reluctant to stay with me knowing that our financial future would be grim, still a debt to the bank, and our life would be nothing like the life we had lead throughout our marriage living on the land, after all we had gone through. A lot of pressure had been put on our relationship by my bank, the loosing of our home, moving out of our family home to live in a shed, in a container, all assets liquidated so far under value, and the pressure the bank had put on us, all by my business partner I trusted for all those years.

To be made to walk away from your family home, the home where I raised my three daughters after their mother lost her four year battle with leukaemia, the youngest was only seven, to have their home taken from them, the property, all my life’s work, being left with nothing but a debt to the bank ( interest and penalties) that you have no ability to repay, is indescribably heartbreaking and mentally degrading, well, it takes you to a place you never though you would go, a place that would end the pressure, the loss and humiliation. I can understand how some farmers took their lives. I am forever grateful to my family and friends who rallied around me and kept me strong, otherwise I would have been one of them. Looking back, it is hard to accept that this could have happened. The banks initial admission, that it was not my fault, that I did nothing financially wrong in my business, and they still sold me up at the worst possible time to save themselves. How many people did they do this to? Please tell me if you were one. Today we see businesses struggling from the effects of COVID-19 on the world and our economy. I wonder how the banks will treat their struggling clients today. Government is assisting this time, handing out massive amounts of money.  I think it will be  different this time. I don’t hear yet of foreclosures, thank God. I hope banks are more understanding today. I hope businesses can survive, they are the backbone of our economy. If banks treat businesses today as they treated me and others during the GFC,  it would be so wrong, it would bring our country down. It was wrong back then. How did they get away with it? Government did nothing. Today I am trying to make my bank show some accountability for what they did to me through AFCA. I can tell you it’s a David and Goliath battle.

I think the banks should be ashamed of the way they acted during those years, and I don’t know how their employees who carried out the banks instructions sleep at night. I can remember their arrogance, their ultimatums, the pressure was enormous. Surely there should be some moral obligation by the banks, to not treat people that way. When I was struggling, my bank made it harder for me, increased the interest rate, inflicted penalties and sold my home and business and destroyed my life, all to get their money back, which they did, I’m sure their management told them they did a good job, their managers probably got a raise in pay. More than money you boast, eh. I say Bullshit. I know you put money before people.

AFCA. The Australian Financial Complaints Authority. My Experience.

I decided to contact these people in 2019 after talking to some Law firms and Legal Aide. The idea of taking on a major bank on my own, even if I had some money, was just plain stupid, so I have put my faith in AFCA.

I submitted my initial complaint to AFCA Nov 2019. They replied saying they would except the case.

I was appointed a case manager and she was very helpful. My complaint was explained to AFCA and they thought I had a good case. I had and still have a law firm in Townsville reprsenting me, and my three daughters assist also, one is a lawyer. All my information, records and emails has been supplied to AFCA. They informed me in one of the numerous phone calls that this was one of the biggest cases they are handling.

I have had other lawyers and a Barrister give an opinion on this case and they are appalled at the banks actions.

This latest submission sent to AFCA consisted of 254 pages on the 23 / 12 / 2020.

A new Case Manager was appointed on the 4 / 02 / 2021. Number 2 On the 15 / 04 / 2021, we were told this new Case Manager is going on extended leave. We are advised a new Case Manager will be appointed.

New Case Manager appointed 4 / 06 / 2021. Number 3

AFCA now advises they cannot find my Submission. Incredible. We resubmit the submission.

Case Manager number 3 looks at my case and his recommendation is received. He says, THE BANK ACTED APPROPRIATELY IN RESPECT OF MR. JOHNSON’S FINANCIAL HARDSHIP.

We now discover this AFCA Case Manager number 3, was employed by my bank, from May 2009 to 2014, as Senior Credit Partner, Business Banking Centre, Business Banking Executive, Senior Credit Manager and Manager—Credit and Risk, all at the same bank I have the action against. Therefore, over the entire period of the relevant events which comprise the background of my complaints with my bank, this AFCA Case Manager was in senior management and credit management positions with my bank. Under these circumstances, any concept of achieving or showing independence or fairness, actual or perceived, in consideration of the complaint and reaching a recommendation is impossible.

WHAT SORT OF AN ORGANISEATION AM I DEALING WITH ? WHERE TO FROM HERE. I’LL KEEP GOING.

PETER JOHNSON.    sunsethill49@gmail.com