POL.9100.0001.0979_0001

Hon MP Hon Chris Bowen MP Clare O'Nell MP Leader of the Opposition Shadow Treasurer Shadow Minister for Shadow Minister for Indigenous Shadow Minister for Financial Services Affairs & Aboriginal and Torres Small Business Shadow Minister for Justice Strait Islanders Member for McMahon Member for Hotham Member for Maribyrnong POL.9100.0001 .0979_0002 02

1. Townsvllle, QLD 10. Perth, WA 2. Sunnybank, GLD 11. Canberra, ACT 3. Melbourne, VIC 12. Allee Springs, NT 4. Glandore, SA 13. Launceston, TAS 5. Southport, GLD 14. Karratha, WA 6. Windsor, NSW 15. Newcastle, NSW 7. Brisbane, GLD 8. Grovedale, VIC 9. Frankston, VIC POL.9100.0001.0979_0003

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Completed: Brisbane. QLD Milton Dick MP Melbourne. VIC Hon Bill Shorten MP Ringwood. VIC and Clare O'Neil MP Hon Bill Shorten MP and Clare O'Neil MP Glandore. SA Hon Senator To be held over the upcoming week and Clare O'Neil MP Alice Springs. NT Townsville. QLD Warren Snowdon, MP Clare O'Neil MP and Cathy O'Toole MP Karratha. WA Senator Sue Lines Brisbane. QLD Clare O'Neil MP Launceston. TAS and Graham Perrett MP Clare O'Neil MP and Ross Hart MP Newcastle. NSW Sharon Claydon MP At least one additional roundtable will be held in each State and Territory again Geelong, VIC before the end of 2018. Invitations will Hon Richard Maries MP be extended through our portal, so if you and Clare O'Neil MP want to attend, please sign up through:

Perth. WA www.alp.orq.au/banksrc Matt Keogh MP

Seaford. VIC Clare O'Neil MP

Gold Coast. QLD Senator

Windsor. NSW Susan Templeman MP

Canberra. ACT Ctwo forums) Clare O'Neil MP POL.9100.0001.0979_0004 04

Summary 2. Legal system not bringing Justice for customers The Banking Royal Commission has been critical to exposing a systemic culture of Participants described being issued misconduct in financial services. w ith default notices and subsequently having to face up against QCs and top­ Labor fought for the establishment of tier solicitors in court, w ith difficulty the Banking Royal Commission, against obtaining their own legal counsel due opposition from the Liberals and then to many firms being conflicted out of Treasurer - who voted being able to act against big banks, and against the establishment of a Banking other smaller solicitors being unwilling Royal Commission 26 times. to commit to action against the big four. Many people ended up representing When the Liberals finally relented, themselves in court proceedings they they gave the Royal Commission an could barely understand, fronting up unreasonably short timeframe - and while against a team of partners and lawyers Commissioner Hayne has done an excellent from major law firms. job so far in this timeframe, it is clearly a deliberate tactic by the Government to 3. External Dispute Resolution not limit how long these issues are in the public working adequately arena. Participants did not feel they had As a result, only 27 victims have been able received procedural fairness or a to give evidence in person, despite more just outcome from the Financial than 10,000 submissions being made to the Ombudsman Service. Royal Commission. 4. Actions of banks, valuers, liquidators Labor initiated a roundtable process to give and receivers around the Global more victims a say and to share their direct Financial Crisis targeting victims experiences - it is particularly important to have victim voices in any reforms that come After the GFC hit, financial institutions out of the Banking Royal Commission. insisted on revaluations, which came in significantly lower than the previous Findings valuations. It is unclear whether this was due to market forces or increased 1. Severe Impacts on victims - mental scrutiny on valuations w ithin financial health, suicide, physical health, losing institutions as a way to manage risk. family - without reasonable and fair­ minded offers of compensation Many participants who were farmers or small business owners were pushed into Victims spoke of long-lasting and often non-monetary defaults because their permanent consequences on their loan to value ratio suddenly blew out. health and financial wellbeing - w ithout fair and reasonable compensation from the banks POL.9100.0001.0979_0005 05

5. Lack of common decency and a. Lack of accountablllty and Inadequate hardship pollcles Inappropriate behaviour by bank staff

Many participants reported that Many participants expressed frustration lenders appeared to view hardship as a at what they perceived to be a two­ temporary delay to the process of default tiered system of accountability. Even and repossession. Lenders frequently where participants had been victims offered participants very short periods of of misconduct that had severely hardship relief - between 1 and 3 months impacted on their lives, they felt as - even where borrowers request and though nobody at the bank was made demonstrate the need for a longer period sufficiently accountable. of reduced payments. 9. Inadequate remediation of consumers 6. Banks choosing lengthy lltlgatlon processes Instead of reasonable Many participants remain settlement with victims uncompensated. In some cases, key evidence was not uncovered until Most participants who had been involved after statutory time limits for taking in legal proceedings against their bank legal action had expired. In other had made offers to the bank to settle cases, victims of misconduct simply their matter along the way. Often, banks did not have the resources to bring refused these offers and persisted with the legal action necessary to obtain costly, lengthy litigation processes and compensation, and banks steadfastly in some cases appointing expensive refused to offer compensation liquidators and receivers. voluntarily.

7. Withholding of Information so victims 10. Not enough time for bank victims to can't make clalms of misconduct have a voice In the process

Several participants reported that Participants frequently expressed a banks had withheld information during view that the Royal Commission needed disputes to prevent them from making more time to drill down into the detail out claims of misconduct. In some cases, of some issues that it examined, and to this involved withholding of documents consider some key matters that were requested through internal disputes or out of scope but are directly relevant the FOS process, unavailability of call to participants' experiences of bank recordings which customers believed misconduct. would prove their claims, or unavailability of particular witnesses from the bank to be examined in court about their actions. POL.9100.0001.0979_0006 06

INTRODUCTION

"We were homeless for 2 years, and it Labor has long had concerns about the tore the family apart. I had a big mental conduct of financial services institutions in breakdown and had to start getting Australia. Over the past few years, it became counselling" - Townsville, QLD obvious that misconduct within financial services, and in particular the big banks, was "There were some who attempted suicide, not a case of a few bad apples. The culture some who had heart attacks, and some who within these institutions was damaged by now have chronic anxiety. You're looking at greed. one right now." - Glandore, SA "The lawyer I hired said 'you'll never beat the bank'." - Seaford, VIC "Privately, the bank basically admitted they're wrong, but they just say I'll have to take them to court if I want to do anything about it." - Newcastle, NSW POL.9100.0001.0979_0007 07

Labor was proud to take what was, at the of Australians have been affected by time, a controversial stance, and advocate bank misconduct in one way or another. for a Royal Commission to address these More than 10,000 submissions have been concerns. provided to the Financial Services Royal Commission so far. Despite this, only 27 We applaud the conduct of the Commission victims had the opportunity to share their and the way in which Commissioner Hayne experience through in-person hearings. has sought to forensically examine the issues under review. We commend the work Labor believes victims of bank misconduct of the Commission, and we are grateful have a right to participate to a greater for the hard work, the intellect, and sheer extent in this process, and the government tenacity, which is being applied to these has deprived them of that right. crucial problems. Labor has called for the Royal Commission We regret that due to the impossibly to be extended to hear from more tight timeframe provided by the Morrison victims. This Royal Commission is a once Government, victim stories have not played in a generation opportunity to reform a greater role in the Commission's work. our financial services sector. It's crucial This is not a criticism of the Commission, it that we get it right so that the stories of is a criticism of the Morrison Government. misconduct that we have heard through our roundtables are not repeated in the It is no secret that the Morrison future. Government never wanted a Royal Commission. The current Prime Minister Stories are important. When we speak with labelled calls for a Royal Commission "a ordinary Australians about their take on the populist whinge" and "a QC's complaints Royal Commission, they almost always raise desk" and voted 26 times against a human story they have heard through the establishing the Royal Commission. process. That attitude was reflected in the short timeframe provided for a final report. Our view is that we have much to learn from the stories of ordinary people as they In effect, the Turnbull/Morrison have engaged with the banks. Government provided just over a year for one Royal Commissioner to review To try to ensure that victims could misconduct by all banks, other financial contribute to this conversation, Labor services including financial advice, lending offered what is very much a second-best both to consumers and businesses, all option compared to giving evidence at of insurance and superannuation, and the Commission itself. Labor leader Hon the regulation and regulatory bodies Bill Shorten MP, and Shadow Minister overseeing these industries. This is a truly for Financial Services Clare O'Neil MP, mammoth task. announced on 2 October that Labor would hold a series of roundtables with victims One of the implications of this restrictive of bank and financial service provider timeframe was that the Royal Commission misconduct. Labor MPs travelled the had very little time to hear from victims country, providing as many people as of misconduct. Many, many thousands possible the chance to share some of their story and tell us what they think needs to be done differently. POL.9100.0001.0979_0008

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Labor has held roundtables from Perth to subject. Dealing w ith victims in a fair and Newcastle, Townsville to Geelong, the Gold respectful manner is an opportunity for Coast to Glandore, Windsor to Seaford. the banks to take responsibility for past misconduct and show that the changed Labor w ill hold further roundtables attitude they profess is real. throughout November and December to continue to hear from victims of The Interim Report of the Commission misconduct. highlighted shocking misconduct a culture of greed and avarice being prioritised over Some have sneered at the idea of talking honesty, fairness and ethical behaviour. w ith people about their experiences of dealing w ith the banks. That is snobbery. The looming challenge for the Australian Victims are entitled to participate in this community, for the Royal Commission, for conversation. Indeed, these discussions industry and for policymakers is to design have highlighted a range of concerns and implement a range of reforms to and additional issues that are not likely prevent misconduct from occurring in the to be resolved through Commission future. recommendations. As this submission outlines, the stories This report is not exhaustive. It is not a of victims we have met with through our replacement for a Royal Commission and roundtables have shed llght on several it is not meant to be. It is Labor's attempt types of misconduct that the Royal to ensure that the crucial experiences of Commission has not had the time to these victims, and the pain that misconduct Inquire Into. has caused to them and their families, are captured and fed into the policy process. The roundtables reinforced to Labor the crucial importance of understanding the More w ill come from these roundtables. short and long term effects of misconduct Labor Members of Parliament have had on people's lives and families. the opportunity to question the big-four bank CEOs through the House Economics The impacts are not just financial. Some of Committee about specific cases and issues the victims we spoke w ith lost farms that that have come up in the roundtables. their family had been farming for more than The response has been powerful. In some 100 years. Many lost the roof over their instances, people locked in conflict w ith a head, some literally ending up homeless. bank for more than two decades have had Many ended up struggling w ith their mental the opportunity to share their story directly health, w ith broken relationships. w ith a bank CEO.

More broadly, we w ill continue to push the banks to demonstrate a tangible commitment to building community trust by making reparations w ith those who have been hurt by misconduct, and we w ill continue to hold them to account on this POL.9100.0001.0979_0009 09

The emotional and psychological impacts the decision to walk away from a decade­ can tear families apart and leave people long conflict because they can't deal with scarred for the rest of their lives. another court hearing, emotionally or financially, and the bank refuses to come to Any policy proposals designed to prevent, the negotiating table. deter or punish misconduct in the future It is an unacceptable state of affairs for must be formulated with the impact of so many Australians to be facing severe, misconduct on victims in mind. lifelong impacts as a result of misconduct of bank officers, and coming up against We present these findings as the result banks and financial institutions that are not of hundreds of emails, consultations, making reasonable and fair-minded offers phone conversations and discussions. of compensation. This suffering must be We respectfully ask that you take these addressed. observations into account in your final report Quotes from participants:

• "The emotional toll on my wife and small children and my elderly parents is immeasurable." - Newcastle, NSW KEY FINDINGS • "This has caused our family emotional destruction and despair." - Geelong, VIC Severe Impacts on victims - mental health, suicide, physical health, loslng f amlly - • "My husband said he felt like going without reasonable and fair-minded offers out the back and shooting himself" - of compensation Glandore, SA • "I do know families who have lost family The most striking theme to emerge from members through heart attacks, and our roundtables was the horrific human stress" - Townsville, QLD impact that the banks' actions had on participants. The depths of despair that • "It destroyed our marriage and broke have been created by past misconduct is our family up." - Canberra, ACT unimaginable - until you meet someone • "Mum's in hospital now because of what who has lost everything to a dispute. the bank put her through" - Melbourne, Participants shared stories of suicide VIC and attempted suicide, of homelessness, ongoing mental health impacts, stress­ • "This is eating me like you wouldn't related physical conditions, family breakup believe". - Glandore, SA and divorce caused directly or indirectly by the misconduct of their bank. For many participants, life will never be the same again. Some damage cannot be undone. Participants told us of how they feel broken by their ordeal, worn down emotionally by their inability to access a just outcome, and financially destitute as a result of disputes. Some have made POL.9100.0001.0979_0010

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Legal system not bringing Justice for There is a significant gap in community customers legal services for small business customers. Currently, it is difficult for small One of the most common issues raised businesspeople in disputes with financial by participants was that banks used legal service providers to access advice or processes ruthlessly to obtain outcomes. representation through community legal Some participants noted that banks centres. appear to give inadequate consideration Bank customers who are served with to the costs and other impacts of legal default notices are almost always in proceedings on the customer or the bank significant financial hardship, and so itself. they are unlikely to be able to produce significant amounts of money upfront to Participants described being issued with pay solicitors or court fees. default notices and subsequently having to face up against QCs and top-tier solicitors Taken together, upfront costs, the risks in court. Some of these participants of losing in court and having to pay the had significant difficulty obtaining their bank's legal costs, and difficulty finding own legal counsel due to many firms legal representation, make it extremely being conflicted out of being able to challenging for customers to get a act against big banks, and other smaller fair hearing through the legal system. solicitors being unwilling to commit to Effectively, for many, even when the banks action against the big four. Many people had done the wrong thing, the justice ended up representing themselves in court system offered no justice. proceedings they could barely understand, fronting up against a team of partners and Quotes from participants: lawyers from major law firms. • "Lawyers from the bank said 'the best In some instance, when the wrongdoing way to resolve this quickly is to drag was clearly on the part of the bank, they them in and out of court until they would tie up the wronged party up in break'." - Canberra, ACT long, complex litigation. The bank would • "The lawyers I've got said that if the then offer a tiny settlement compared dispute goes too far, they'll have to pull to what was owed. In some instances, out because of conflict issues with the customers ended up taking the settlement bank." - Seaford, VIC because they just couldn't continue the battle. People we spoke to felt completely • "The second you're in dispute with powerless. The continuing refrain we heard the bank, you're 10 steps behind." - was, "I didn't think this could ever happen Glandore, SA in Australia. But it did." • "The legal system is being used as a weapon against us." - Seaford, VIC POL.9100.0001.0979_0013

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External Dispute Resolutlon not working 6 years to take legal action even if we adequately wanted to." - Townsville, QLD "Even though FOS found the loan had It was almost uniform across the been lent irresponsibly, they said we roundtables that participants did not feel had to pay the whole thing back in 6-12 they had received procedural fairness months" - Melbourne, VIC or a just outcome from the Financial Ombudsman Service. Participants Actions of banks, valuers, llquldators and reported: receivers around the Global Flnanclal Crisis targeting victims • decision-making that participants believe did not take into account Before the Global Financial Crisis (GFC), relevant evidence or information, or did valuations of commercial properties owned not give it sufficient weight; by many participants were artificially or insufficient interrogation of the naturally inflated. evidence, or of the bank's position; After the GFC hit, financial institutions pressure from case managers to accept insisted on revaluations, which came offers of settlement that participants in significantly lower than the previous felt did not reflect a fair outcome; valuations. It is unclear whether this was • participants being told that if they due to market forces or increased scrutiny continued further with the process, they on valuations within financial institutions as would not get a better outcome, so a way to manage risk. they should accept offers from banks, that they subsequently discovered were Many participants who were farmers or below what they should fairly have small business owners were pushed into received; non-monetary defaults because their loan banks taking enforcement action to value ratio suddenly blew out. despite FOS disputes being open; and Despite never missing a payment, the bank • case managers refusi ng to consider told them they were in default and so they particular legal issues unless the non­ lost their businesses and farms. legally trained participant had raised them correctly in their application. To compound the impact of this conduct, in some cases receivers and liquidators Quotes from participants: sold commercial properties in a 'fire sale' • "We had 6 case managers at FOS. We for well below fair value, and took a cut of finally got the decision 12-18 months the sale price as their fees. This left many later." - Seaford, VIC participants in the position where they not only lost their farms and businesses, but • "I didn't know the right questions to also their family homes, because the sale ask to get the answers I needed at the price of the commercial properties was time." - Geelong, VIC insufficient to discharge the business debt. "At the end of the day, FOS made this ruling, and they said take it or leave In the space of a few months, having never it. We went to get some legal advice, been behind on payments, these families but by that point the whole thing had went from running successful farms and taken so long that we were outside our small businesses to having nothing. POL.9100.0001.0979_0014

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Quotes from participants: Unfortunately, many participants reported that lenders appeared to view hardship as "They said 'put your house up as a temporary delay to the process of default security to expedite the loan, and we and repossession. Lenders frequently can revisit that later'. We never did offered participants very short periods of revisit it." - Glandore, SA hardship relief - between 1 and 3 months • "They sold our houses for next to - even where borrowers request and nothing." - Seaford, VIC demonstrat e the need for a longer period of reduced payments. "After a couple of bad years on the farm, the receivers are issued and then In addition, there are many ways in which a all of the assets were sold under value" hardship arrangement can be implemented. - Perth, WA For example, arrears can be due and "They told us if we sold one property to payable immediately at the conclusion pay down the debt a bit, we'd be fine, of the hardship period, or they can be so we did. Then a couple of months recapitalised into the loan. Interest can later they said we had to sell another continue to be charged during a hardship one. And I went down to the bank and period, or it can be waived for the period said 'hang on, what's going on here?'." - where there is a payment moratorium or Townsville, QLD reduced repayments.

Lack of common decency and Inadequate Where there is possible misconduct or hardship pollcles unethical or dishonest behaviour by the lender that has caused hardship, lenders There is a legitimate expectation in should be more flexible with the terms the community that where borrowers of hardship arrangements. For instance, encounter life events that significantly lenders should be more willing to offer impact on their ability to repay a loan, interest freezes, recapitalised arrears and the lender will attempt to negotiate an payment moratoriums where they are affordable modification of repayments aware that they may have engaged in to enable the borrower to get back on misconduct that has contributed to the their feet. In some cases, the life event customer's hardship. Lenders should also may be so significant, such as the sudden consider customers' circumstances more death of a family member or a protracted holistically when considering hardship drought, that the borrower may need a applications, including considering the longer period of relief in order to continue consequences on the borrower and their servicing the loan. family of enforcement action, and the costs to the lender of the loan coming to an end. Whether the hardship is short-term, medium-term or long-term, there are strong ethical, economic and social reasons for the community to expect that lenders will be understanding and fair-minded in their approach to borrowers. POL.9100.0001.0979_0015

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Quotes from participants: fees, trustee fees and under-value sales of secured property are taken into account. "The reason they t ake everything off you is because you're defenceless." - Banks and financial institutions should Seaford, VIC place more emphasis on ethical, "It hurts that you can work so hard, compassionate behaviour towards be so honest, do so much good in financially stressed borrowers, in particular life, and you're not even listened to the impacts of enforcement action against when something like this happens" - secured property on borrowers and their Townsville, QLD families. Where those borrowers display an inclination to restructure their affairs, "What they really wanted to do was or present a credible roadmap to the bank asset strip us and sell our farm" - for a return to financial good health, the Canberra, ACT bank should endeavour to reach a fair "My father died unexpectedly in and reasonable resolution that does not an industrial accident. It changed involve court action and enforcement. It everything for us. We asked for 12 appears that some banks currently view months of hardship relief, but they only enforcement action as an easy way to exit offered us 4 months." - Melbourne, VIC from complex situations with customers in distress, without considering the human Banks choosing lengthy litigation impact of this decision or their ethical processes Instead of reasonable obligations to customers. In some cases settlement with victims it appears that b anks fail to even consider the cost implications for the bank in taking Most participants who had been involved protracted enforcement action. in legal proceedings against their b ank had made offers to the bank to settle Quotes from participants: their matter along the way. For many participants, this didn't involve waivers of "After the GFC hit, we were having some debts. In fact, almost without exception, trouble with repayment s. We said to participants were clear that they wanted to the bank 'if you can knock our interest pay their debts and felt morally obligated rate down to 6%, we can meet the to do so. The offers many participants repayments and get back on our feet'. made involved temporary reductions or They said 'well show us some good deferrals in payments, non-enforcement faith and sell a property'. So we sold a of non-monetary default clauses, or property, but they never did reduce the compassionate assistance due to drought interest rate." - Townsville, QLD or crop failure. "They could have said 'oh, we stuffed up' and written down the debt as Often, banks refused these offers and appropriate, and everyone would have persisted with costly, lengthy litigation been fine. Instead, they decided to sink processes and in some cases appointing me." - Canberra, ACT expensive liquidators and receivers. In "I had another bank ready to refinance, most of these cases, the bank ended up no better off financially than if it had all I needed them to do was agree to accepted the offer from the customer in release the mortgage. But they refused. the first place, once legal fees, liquidator " - Canberra, ACT POL.9100.0001.0979_0016

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Wlthholdlng of Information so victims • "You are completely helpless, you have can't make clalms of misconduct no control. But the banks have all the control" - Perth, WA Several participants reported that banks had withheld information during disputes Lack of accountablllty and Inappropriate to prevent them from making out claims of behaviour by bank staff misconduct. In some cases, this involved withholding of documents requested Many participants expressed frustration through internal disputes or the FOS at what they perceived to be a two­ process, unavailability of call recordings tiered system of accountability. Even which customers believed would prove where participants had been victims of their claims, or unavailability of particular misconduct that had severely impacted witnesses from the bank to be examined in on their lives, they felt as though nobody court about their actions. at the bank was made sufficiently accountable. Equitable and timely access to information is a vital part of ensuring a just outcome Participants complained of unacceptable in any legal proceeding. A concerning behaviour by senior bank staff, sometimes number of participants reported that over significant periods of time. banks had withheld or failed to provide information that the participants believed This included allegations of: was essential to ensuring a just outcome in their case. • bullying and intimidatory behaviour; • inappropriate surveillance; This issue is inextricably linked with the • inappropriate language; broader concerns that participants raised about the cost of litigation, the financial • visits to participants' homes or farms and costs pressures on customers and the to push them to sign forms or agree to pressure to settle for less compensation changes to their financial arrangements; than they appeared legally entitled to. Each • continuous changes in who customers of these matters speaks to an imbalance are dealing with at the bank, causing between banks and customers in dispute them to have to re-tell their story and resolution processes, and a tendency by relitigate the same arguments over and the banks to exploit this imbalance to over again. minimise compensation paid to customers, even where misconduct is acknowledged or Quotes from participants: is plainly evident. • "I've been put under surveillance 3 times Quotes from participants: in the past 7 years since I made my insurance claim" - Geelong, VIC • "They withhold all the documents so • "He called me up and said 'have you got you can't defend yourself." - Glandore, any super?' I said 'yeah, why'. He said SA 'you should call your super fund and • "The court subpoenaed the two bank see if they'll release the funds so you officers involved, and they still didn't can pay it towards the loan'. Thankfully turn up" - Canberra, ACT my super fund manager refused. He said 'don't just throw your super at them, they'll just take it and you'll still POL.9100.0001.0979_0017

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be behind'. I'm so glad he didn't let me banks have an ethical obligation to contact give it to the bank, because super is the affected customers and fully remediate only thing I have left now." - Townsville, them. QLD • "As recently as last week, the bank In many participants' experiences, even wouldn't return our phone calls or sit where misconduct has been proven to have down with us and talk about the issues." occurred, banks attempt minimise their - Geelong, VIC liability and display a lack of empathy for the victims of that misconduct. In some • "It seemed like every time I called up cases, banks have pushed victims into there was a new staff member in charge accepting settlements well below their of our case, and I'd have to tell the legal entitlements. whole story again" - Melbourne, VIC Quotes from participants: Inadequate remediation of consumers • "Please don't leave victims behind. A concerning number of cases discussed at There has been no redress." - Geelong, the roundtables related to known or proven VIC misconduct, but participants remained uncompensated. • "I've now lost everything, after getting a loan I couldn't afford to pay back In some cases, key evidence was not because of the advice I received from uncovered until after statutory time limits the Bank." - Perth, WA for taking legal action had expired. In other • "Once you lose the family home, you've cases, victims of misconduct simply did lost everything." - Seaford, VIC not have the resources to bring the legal • "If you and I do anything wrong we pay action necessary to obtain compensation, the penalty. If anything, they've been and banks steadfastly refused to offer promoted." - Glandore, SA compensation voluntarily. Not enough time for bank victims to have Some participants have been through a voice In the process lengthy legal battles against QCs and top tier law firms and agreed to settle their Participants frequently expressed a view matters for far less compensation than that the Royal Commission needed more they were entitled to, just to put the matter time to drill down into the detail of some behind them. Others have settled for little issues that it examined, and to consider or no compensation at all and subsequently some key matters that were out of scope discovered key evidence to support but are directly relevant to participants' their case but been bound by settlement experiences of bank misconduct. agreements that they were pushed into signing. For example, the actions of, and potential misconduct by, valuers and liquidators Banks are regularly failing to provide working with banks that foreclose on small sufficient clarity about their remediation businesses or farms was not considered. processes for victims of past misconduct, whether it has been examined specifically In addition, it was a very common theme by the Royal Commission or not. Where that participants viewed the fairness and banks admit misconduct, or where the quality of decision-making in the Financial Commission finds that misconduct Ombudsman Service process as poor. occurred, it should be made clear that POL.9100.0001.0979_0018

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Although external dispute resolution was The stories that we have through this peripherally considered by the Royal roundtable process have provided Commission, participants expressed additional clarity and breadth to the concern that the Commissioner may not preliminary conclusions about bank culture have gathered sufficient evidence to make that the Commissioner outlined in his recommendations for significant reforms interim report. They have also shed light on to the new Australian Financial Complaints some widespread issues with process and Authority. culture that were touched on only briefly in the interim report, or were not covered at Quotes from participants: all.

• "I thought I was the only person in The reason that Labor has had to Australia they'd done this to, then undertake this roundtable process is that I heard the stories at the Royal the Government did not give the Royal Commission." - Glandore, SA Commission the time and resources to • "There are other victims who you should hear these victims' voices and stories. We really be hearing from, but they can't be have made every effort to give victims a here because they're in such a bad way." chance to be heard and to have their views - Seaford, VIC reflected in this submission. We have done what we can, but we know that this • "There's a whole lot of people relying is not an adequate substitute for a proper, on the fact that you'll just give up. But thorough examination of these cases I won't stop until I've got justice" - through the Royal Commission process. Newcastle, NSW Labor is hopeful that by drawing the Concluslon Commission's attention, however briefly, to the issues in this report, the voices of There are a wide range of alarming issues these victims will be heard in a small but that have been revealed through Labor's significant way. roundtable process that demand further attention from industry and Government.

Labor is hopeful that by drawing these issues to the attention of the Royal Commission, the Commission will be able to consider and address some of them through the policy round in November 2018 and in the final report in February 2019.

The response of financial service providers to misconduct revealed in the Royal Commission will be a threshold issue in their quest to regain the trust and confidence of the Australian community.

Labor believes that it is essential for past victims to be properly remediated where misconduct is identified by the Commission. POL.9100.0001.0979_0019