Attwood Marshall Lawyers, Commercial Litigation Lawyer, Georgia Taylor, discusses how customers affected by banking scandals continue to come off second best with “remediation programs” implemented by the banks experiencing ongoing delays.
Attwood Marshall Lawyers have been heavily involved in cases against NAB and other lending institutions for matters including unfair conduct, negligent and fraudulent financial planning advice, irresponsible lending, and the famous fee-for-no-service ‘scams’.
The Hayne Royal Commission was a shakeup for the industry which has been a great outcome for those affected by decades of financiers behaving poorly. However, it has brought forward new challenges to the ever-changing sector.
In 2015, NAB rolled out wealth remediation programs in order to work through the case files of customers who should now be entitled to compensation after being charged for services they never received, or being given negligent financial advice that did not align with their risk (usually involving advice to invest in NAB owned entities).
In order to handle the estimated tens of thousands of claims, NAB handed the bulk of these customer problems to Deloitte to assess and ultimately determine the outcome for each customer.
Taking on the high volumes of customer claims from the likes of the big banks drove Deloitte to set up a low-cost delivery arm to assist with processing claims. Deloitte rolled out these programs as Project Hunt and Project Zeus. These projects were aimed at compensating customers for the ‘fee-for-no-service’ scandal and dodgy financial advice. NAB expects Project Hunt to be finished in October, 2020.
ASIC alleged that NAB had broken the law more than 12,000 times and NAB has made provisions for upward of $2 billion dollars for customer compensation which will be paid out under these schemes.
The reports say that poor administration is to blame for the ever-growing delays in customer compensation. This delay in the compensation process is a further insult to bank customers who have suffered losses at the hands of the banks and now have to battle them to get their redress.
Who is Deloitte?
Deloitte is a multinational professional services network and one of the biggest accounting organisations and audit firms in the world. The firm operates in over 150 countries and offer four main services – audit and enterprise risk services, consulting, tax and financial advisory.
Deloitte is not new to controversies with previous litigation surrounding some of their audits. They also received media attention in 2017 when they fell victim to a major cyber-attack which breached client confidentiality.
What is the remediation operation Deloitte is running for NAB?
In the wake of the Hayne Royal Commission report handed down on 1 February 2019, there was an increase in industry demand for experts in risk and compliance. The focus was on the banks to work with experts and to assist in implementing change through the sectors. More importantly, these experts were tasked with picking up the pieces of the banks injured reputations. The role of the assessors was (and is) to understand the regulations for providing financial advice, and to be able to review customer files to determine what, if any, compensation was owed to the customer.
Made up of inexperienced junior graduates, the externally housed sector of Deloitte is reported to have experienced a high turnover of staff which caused a significant slowdown of the processing of customer claims within these projects. It is reported that staff expressed their dissatisfaction when working for the programs, stating the low income, poor work environment and demand on churning through files quickly was unmanageable. Staff were allegedly quick to jump ship to work for boutique firms where they were enticed with larger salaries and better working environments.
Why isn’t it working?
As a result of being understaffed and experiencing high staff turnover, Deloitte have had issues whereby claims are excessively delayed and there are many cases where compensation is incalculable. This is due to bank employees and ex-financial advisers disposing of client documents for risk of their deplorable behaviour being exposed which could result in a loss of the respective employee’s financial services license. The lack of documentation and transparency from banks during these transactions in question, have left advisors and consumers in the dark. This has only added to the workload and stress for all involved.
Again, it seems as though the banks are being pushed to provide consumers with the outcome they deserve because of historical misconduct. Thankfully, the regulatory body ASIC has told institutions to be generous in their payment of compensation. The banks notionally have said they’ll settle for a fair and reasonable payout in circumstances where documentation is scarce or non-existent. However, our experience is that the banks continue to ‘dodge’ claims wherever possible and make it a difficult process with lodging claims. Some of the tactics have been:
- Requesting the same documents numerous times despite them being submitted by post, email and online;
- Delays in responding to emails, correspondence and phone calls;
- Delays in processing the claims and providing a decision with respect to the claim;
- Making a decision concerning the claim which denies any wrongdoing or loss of the clients, despite clear evidence to the contrary;
- Refusing to cooperate and provide copies of documentation in their possession;
- Raising limitation period defences in circumstances where the banks have caused and/or contributed to the long delays in bringing a claim;
- Denying the existence of financial advice and/or assessing the financial advice pursuant to the bank’s own assessment, rather than that of the customers losses or external experts.
What can you do if you have been impacted?
Attwood Marshall Lawyers have experienced similar difficulties with deciphering customers claims as a result of the conduct displayed by banks, dating back to the 1990’s. We can’t express the importance of customer’s holding onto all documentation from banking matters in order to assist in getting a fair outcome.
Haynes recent report has highlighted how ineffective the big banks were, the little control they had over their staff and of course how this misconduct is still impacting consumers today. It has been noted by ASIC that many past and current programs developed to assist with compensation for customers have failed to reach a good standard of consumer outcomes.
How can Attwood Marshall Lawyers help?
Attwood Marshall Lawyers have developed a stream-lined system that not only assists consumers with their claims, but also provides the necessary information to the bank’s advisors in the driver’s seat who are determining a claim for compensation. We use reputable forensic accountants to assess the conduct of the bank and calculate the losses suffered as a result of this conduct. Our Commercial Litigation Lawyers are experienced in dealing with lending institution matters and are highly specialised in all areas of business and commercial law with a key focus on dispute resolution. The team have the local knowledge and industry experience to advise and guide you through the ever changing and complex commercial litigation and dispute resolution law system, in order to obtain a positive outcome.