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Economics References Committee - 28/04/2016 - Scrutiny of financial advice

KESSEL, Mr James, Private capacity.


CHAIR: Welcome.

Mr Kessel : It is a pleasure to be here. G'day everyone.

CHAIR: Thank you very much for appearing before us today. I understand you have gone to some lengths to get here.

Mr Kessel : Yes, it is just another challenge, you know.

CHAIR: I do appreciate that.

Mr Kessel : That is all right.

CHAIR: I invite you to make a brief opening statement, if there is anything you want to say before we get going, and then we will open it up to questions.

Mr Kessel : The first thing is Dr Koh is a champion. What a man! He stuck his neck out on the block for what was right, and everything he is saying is right. He has done the right thing because he could not live with himself to lie about things. They wanted him to change and hide documents and say things that were not right. His values and morals are correct. I have spoken to him on the phone. What a very nice man. He has been broken by this and in hiding because he fears for his life. That is why he is not here. He does not want photos so people can identify him. I am treading on dangerous ground. Does everyone understand that? He has put himself out there, and when you really think about it anything is possible, and he fears for his life.

CHAIR: That is a fairly dramatic claim.

Mr Kessel : It is dramatic but it is true, because you are dealing with a big powerful identity here. I have spoken to Dr Koh, and he is genuinely scared. He did the right thing by everyone, and I think he is a fantastic guy. Without him, there would not have been this at all. Following on that, Adele Ferguson and the Four Corners team—what a crew. They are like an extended family now. For people like that to stick up for the underdog is amazing, and I am truly thankful. I wanted to catch up with Dr Koh, but he will not do that until it is all said and done because he does not want to put himself out there.

CHAIR: Can I just go to your own personal experience with your policy and your claim. It seems that you have had the life insurance policy since your early 20s.

Mr Kessel : I do not remember actually what age—but 20s, yes.

CHAIR: Have you ever added up how much you have spent on premiums over that period of time?

Mr Kessel : I did a bit of a rough estimate. Have you done the figures?

CHAIR: No, I have not.

Mr Kessel : Neither have I. I know it would not add up to the amount that they paid me. They paid me—how good is that! I was blown away. It was a week or two after the Four Corners show when I was told by my lawyer that they said they are going to do the right thing. I was sweating on this money. Mate, I had debt like you would not believe. I was checking the bank every day. I was going to the flexi-tell, and I would think, 'Still nothing there.' I sort of just gave up on it. One day ago down I went down there thinking, 'I better get some milk and bread,' and I thought I should have $50 in there. I pulled the receipt out and looked at the receipt and I thought, 'Something is wrong here; that must be the receipt number or something.' I had to make sure no-one was there. I just could not believe it.

CHAIR: There was an extraordinary effort required to get to that point.

Mr Kessel : It was just unbelievable. I had given up on the whole thing. My girlfriend down the back, Cherie—after I had a heart attack and I was in recovery mode, I rang the man who sold me the policy, who is retired now. I did not mention his name because I did not want it to affect him. I rang him and he said, 'What? You had a heart attack?' I told him what happened. He said, 'They'll pay you. No worries—there's the question.' I said, 'Are you sure?' He said, 'Yes.' So I thought, 'No worries.'

Senator DASTYARI: With a heart attack its hard to, you know—either you do or do not have a heart attack.

Mr Kessel : The thing with is heart attacks is that people have heart attacks and there are various levels of heart attacks, as we have all learned. You can get chest pain, which is the start of a heart attack, but cardiac arrest is the end result of a bad heart attack and then you stop. If you are not somewhere to be jump started, you are gone and you meet the maker. It is a scary moment when that happens to you. You know when you are going to die. I can tell you how it goes.

CHAIR: I will just take you to the point. It is interesting, but unfortunately we have limited time. At what point did you realise that you needed to engage solicitors to get your entitlements?

Mr Kessel : It was just before Christmas when I was dealing with the claim. I had the heart attack on 19 September 2014. Weeks after that, I found out what I needed to do—I needed to get claim forms, fill them in and blah blah blah. I started the process. I filled the forms in and then I rang them and asked how it was all going. They said, 'We need medical records going back three years.' Then they wanted more medical records—I gave them all my medical records. I had to chase all of these records up, because they did not pursue it. I could not understand why they were not doing this. I did it all. It was a real problem.

CHAIR: So they made you do all the work, after you had had a heart attack?

Mr Kessel : Yes. I just could not believe it. I thought: 'Okay, I'll do it, because I know my doctors.' I even drove back to Guyra and spoke to Dr J. I had more paperwork copied from the actual day about what was happening, because of this troponin level thing. It was a real problem. Did you watch Four Corners?


Senator DASTYARI: Yes.

Mr Kessel : When your heart stops, your heart stops. If you are not somewhere you can be fixed, you are finished. I am lucky. I am thankful to be here—very thankful and happy. My life is different, but you forget about it after a while and you just go back to working hard and carrying on with life.

CHAIR: So it was only after the Four Corners program that you received a payout which was commensurate with the terms of the policy?

Mr Kessel : Yes.

Senator DASTYARI: It seems ridiculous. Firstly, I have to say it is fantastic that you have been paid—not that that should be a huge event. You were paid what you were entitled to be paid. You had been paying into a fund for years, so you were getting paid your entitlements, as you should have. But what do you think it says that, to get the payment that you were entitled to, you had to go to such extraordinary lengths? It took a Four Corners expose for your situation to be resolved. Do you believe that, if it had not been for media scrutiny, the whistleblower or people like Adele or Four Corners, there is any chance you would have been paid?

Mr Kessel : No, not a chance—no way. There is no way. Nothing would have happened. It scares me to think how many other people have been through this and are out there. It is just ridiculous and wrong. How else do you describe it? It is criminal.

The payout figure is determined on what your premiums are. I will tell you how it worked for me. I needed to have a big policy because I was over $1 million in debt with cotton-picking machinery. I was a cotton-picking contractor. I think I was $1.7 million in debt. I figured $1 million would relieve some of the pain for whoever had to clean up this mess after I was gone. The trauma was a bit of an extra thing. I thought: 'I'm never going to need that—I don't get sick. I'm good. I'm healthy. I'm bulletproof.' Anyway, the premiums were very high. If you are a smoker, the premiums are nearly double, and that is what I was, so they were very high. I do not know if they still do that these days. Can you get trauma and life insurance if you are a smoker?

Senator DASTYARI: I do not know.

Mr Kessel : I do not know. I have not looked into it. But that is why the premiums were high back then, to be honest with you.

CHAIR: After the Four Corners program, Mr Narev explained that he would personally contact all the customers such as you and review the claims. What was your experience?

Mr Kessel : With the CEO?


Mr Kessel : Every Friday we catch up down at the local! I have not heard from him yet. He has contacted my lawyer and asked if I was still interested in catching up. Yes, I will meet the man. He is just a man. The thing is I do feel a little bit sorry for the guy, because he is not the boss. Well, he is the guy to look to, but—

Senator DASTYARI: He is the definition of the boss!

Mr Kessel : Yes, but there are people above him, aren't there?

Senator DASTYARI: There is the board.

Mr Kessel : Yes, and they are telling him what to do, what to say. So he is taking the brunt of it, and he does not want to lose his job, does he? He is getting $8½ million a year. You do not want to chuck that in.

CHAIR: So your lawyer has heard from somebody from the bank, but you personally have not had any contact?

Mr Kessel : I have not spoken to him yet, no.

CHAIR: What about anybody else from the bank, to apologise for what has happened?

Mr Kessel : No, no-one.

CHAIR: You have talked about the fact you have received a payout. Was that the full payout you were expecting, or was it somewhat less than the full amount?

Mr Kessel : It was spot on.

CHAIR: That is good.

Senator DASTYARI: You said before there are others. Dr Koh mentioned this earlier. There are an unknown quantity of other people whose circumstances may be the same as yours but who have not been paid out. I do not want to say you were 'fortunate', because you are entitled to this money, but because of good journalists and whistleblowers your story was able to be told. As you said before, your issue got resolved because your story was told.

Mr Kessel : Yes.

Senator DASTYARI: What would you say to the bank? What would you say to Mr Narev, who said that they only need to look back through two years of files and that the bank can do it itself? Would you have felt more confident if your situation were handled independently, externally? Or do you have faith that the bank can fix these issues itself?

Mr Kessel : There is no way. Would I have faith in the Commonwealth Bank?

Senator DASTYARI: Yes.

Mr Kessel : No. Who would, really? They have been doing the wrong thing. Everyone makes mistakes, but they are making some big mistakes and they are messing with people's lives. I thought this was a sure thing when it happened to me. I thought: 'I've done the right thing. I've given all the information they wanted and paid the dues.' I thought it was clear cut, but no, because of this troponin thing. 'You didn't die.'

I went to a cardiologist and his ultrasound guy was a real mongrel. As soon as I walked in there he said, 'What do you expect out of this?' I thought, 'Gee, he's spoken to these guys already.' They must have rung him. I said, 'Just what I'm entitled to.' I said, 'I had a heart attack and my heart stopped, so I died.' He said: 'You didn't die. You're not dead until you are brain dead.' I thought to myself, the only thing brain dead here is him. It made me so angry. He was so negative. I was thinking: 'What is going on here? Maybe they did talk to this guy.' I do not know, but they are doing the wrong thing.

When I found out that they said no altogether, it put me in a spin. You want to rebuild and get better, but I just went straight back to work. I had to—I had no choice about going back to work. But you get depressed. Suicide would never enter my mind at all because I was brought up in a Christian family and it is just not an answer. But a lot of people would go that far, because you get to this dark place. Unless you have some backup like family, friends, God—He takes care of you; He took care of me, and that is why I am still here—it is terrible. It must be a terrible place to be. I am sure that this is happening to people because of this sort of thing, and it is just wrong.

CHAIR: Have you come across people yourself who have gone through the same experience?

Mr Kessel : With insurance claims? No, I have not spoken to anyone. Actually, now you say it, people have come up to me and said, 'Back in 1982 we went through the same sort of thing with a heart attack too,' but I do not know the details. All they said to me was, 'Good luck with that.' I said, 'Watch Four Corners and we will learn something,' because I learnt a lot from watching that program. I did not realise there were these other guys. I felt terrible watching it, because I feel good. I am alive. My heart is weak, but it is going to have to deal with me because I am just going to keep pushing it! The muscles are thin in the lower part. I have to take medication every day—blood thinners. If you cut your arm, it looks like you are cutting your arm off, in that you just bleed like anything. But I am here and life is good.

CHAIR: When you received your settlement, were you asked to keep that confidential?

Mr Kessel : No, but I was not running down the street yelling out, 'They paid! They paid!' I had a lot of debt: $1 million. It seems like a lot of money. It is a lot of money, but these days it does not go far if you buy a house and you buy a car. I am not going to do that. If I do, it will be an old thing so I would still have money. But when you get credit card debt overdrafts and all of the rest of it, $100,000 is not a lot. There are not many 100,000s in a million. So it is not a lot of money these days—but it is. It is a lot to not have, and then when you have got it to be able to pay debt, it is great. I am thankful that I had the policy, and I am thankful it has gone the way it has. Without Dr Koh, I would still be very worried, because I would not have been able to repay the debts unless this had happened. I am very thankful to him. Please look after that guy. He deserves it. He has uncovered this rot. He is gutsy for standing up like that, don't you think?

CHAIR: Mr Kessel, I think you also deserve to be commended for coming forward and for the same sorts of things as Dr Koh.

Mr Kessel : It is easy.

CHAIR: You are in business for yourself.

Mr Kessel : I was for years. I am still self-employed. I am a diesel fitter, mechanic. I do just about everything. I am a bit of handyman. But I cannot stress enough: this Dr Koh—it is destroying him, and he deserves better. Please, you have got to make sure they do the right thing by him and everyone else in the future. I can only imagine what has been going on. It was only by accident. I read the paperwork. In the first five minutes of the interview—I had no idea—Adele handed me this paperwork and it said on the paperwork, 'There's no reason why this man should not be paid.' They had all the medical records. Everything was legit. There was no game. There was no trick. And I thought, 'What?' That paperwork was either withheld from the board or they wanted to change it. Is it just greed? I think it is greed, isn't it? The CEO makes $8½ million a year. There is something wrong with the system, isn't there?

CHAIR: Are you disappointed that Mr Narev is not here today?

Mr Kessel : Not really. I am not happy with the guy, but it is weird, because I should be saying, 'Thank you very much for paying me,' but he would not have done it unless they said—well, he has not done it; the whole team has. He is the frontman who says what he has to say, and he is the leader of the group, but there are people above him. They are all accountable. He is on the firing squad. They are all looking at him, but I believe he is doing as he is told too, isn't he? Is that correct?

CHAIR: Mr Narev can speak for himself, but unfortunately he is not here today.

Mr Kessel : Are you going to talk to him on the—

CHAIR: We are intending to.

Mr Kessel : I feel a bit sorry for him, because it is a mess-up, isn't it? Imagine being him, and this has happened, and it is like, 'Oh gee, I'm in the crap here.'

Senator DASTYARI: It must be tough on $8 million!

Mr Kessel : Yes, you are right. Horrible, isn't it!

Senator DASTYARI: I want to thank Mr Kessel for coming forward. I understand you travelled quite a bit to come here.

Mr Kessel : It was only 600 kays. It was nothing. It was just time, but it was a challenge. Sydney is a wild place. Do all you guys live here? It is a rat race, isn't it? Just getting here was a challenge, but it was fun. Is that it?

CHAIR: That is it. Thank you so much, Mr Kessel, for coming. We do appreciate it.

Mr Kessel : Thank you for having me. It was a pleasure.