The committee’s annual report for the 2020 financial year called out the non-major bank for breaches around the code’s consumer protections for debt repayment.
The committee noted it was only the second time since 2008 that it had considered breaches by a bank serious enough to warrant a public call-out in its annual report and on its website.
Great Southern collapsed in 2009 owing more than $600 million to investors, including a significant number of advice clients, many of whom had taken out loans through Bendigo and Adelaide’s Great Southern Loans (GSL) business unit to take part in the investment scheme.
“In deciding to name Bendigo and Adelaide Bank, the committee has given careful consideration to a number of factors, including the seriousness of the breaches and their likely impact on GSL customers,” committee chair Ian Govey said.
“We acknowledge the work the bank has undertaken to date to address the issues that came to light following an audit into GSL’s operations, and to fix the root causes to ensure code compliance. We also note Bendigo and Adelaide Bank has commenced efforts to remediate customers who were adversely impacted by non-compliance with the 2013 code.”
Responding to the findings, Bendigo and Adelaide said it had “taken swift and decisive action” to remedy historical breaches to the code’s debt collection practices, the majority of which it said occurred during 2015 and 2016.
“We regret our actions and sincerely apologise for any negative impacts these breaches have caused for our customers. We fell short of our own expectations and that of our customers and the community. These actions do not reflect who we are and what we stand for. We always strive to put our customers and communities first and these historic issues are not acceptable,” the bank’s managing director Marnie Baker said.
“The bank has addressed the operational issues to prevent this from happening again and has established a remediation program to provide payments to customers where we made mistakes that had an adverse customer impact.”
Bendigo and Adelaide said it had taken a number of specific actions to ensure better compliance with the code’s debt collection practices in future, including integrating the team responsible for collection of Great Southern loan repayments with its financial difficulties team, and strengthening its oversight processes to “regularly review all Great Southern collections and financial difficulty activities”.
The news follows ifa reporting in July that a Sydney law firm had gathered almost 600 expressions of interest for a new class action to challenge the validity of loan terms agreed to by Bendigo and Adelaide Bank customers caught up in the Great Southern collapse.
i thought it was also elders selling these on behalf of Bendigo?
Bendigo Bank were ruthless in their pursuit of outstanding loans. Many people have been bankrupted and their unwillingness to show flexibility was breath taking. This finding is overdue.
Wow lightning fast action from the watchdog, only between 5 -11 years late!! Amazing.
What about the lawyers who told investors not to pay back their loans? It was very bad advice!! Where is the compensation for those victims? Those loans ended up doubling in size due to the high interest payments compounding, plus penalty interest. I met two of these victims, when they came to me out of desperation. If was bad enough that they were given bad advice to enter these schemes from an accountant who later fled the country. But then the vulture class action lawyers entered the picture and piled on more pain to these unfortunate souls. These lawyers need to be held to account. I do not want to see that sort of behaviour EVER AGAIN in this country. Maybe we should have a Royal Commission into the legal profession and accounting professions? It can be headed up by a financial planner as we see the damage crooked lawyers and accountants do to consumers
Just because they didn’t win the legal case it does not therefore make the legal advice bad advice.
This is analogous to saying anyone who was recommended by a FP that they invest in Australian shares at the start of this year was given bad advice too.
Incorrect, you need to separate product from advice. It’s more like telling someone to breach their super caps, or recommending someone makes a contribution before considering the work test.
Is Mike Hirst still advising the Federal Government?
More misbehaviour from banks with little to no consequences.
If a financial adviser makes a mistake their livelihood is taken away from them
You just need to publicly apologise and state “These actions do not reflect who we are” – that’s all that’s required