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Thursday, 8 June 1989
Page: 3644


Senator McLEAN(1.01) —I return briefly to the theme of banking which, as I am sure honourable senators are aware, I have been exploring for weeks. Since I first raised the question of allegations of banking malpractice in November 1988, quite obviously the profile of the banking issue generally in the community has increased quite dramatically. The focus recently, of course, has been on questions of bank charges-specifically, bank interest charges. The question of charges generally has captured the interest of the public, as have the extraordinary profits-I think the banks referred to them as super profits-announced by all major banks in Australia in recent times.

On previous occasions, I have tabled 39 affidavits relating to allegations of serious banking malpractice. Indeed, I proposed to the Senate that the Senate Standing Committee on Legal and Constitutional Affairs address these serious allegations. I have undertaken on behalf of constituents to table, for the consideration of honourable senators, further examples of these allegations of malpractice. I seek leave to table two further affidavits today.


The ACTING DEPUTY PRESIDENT (Senator Bjelke-Petersen) —Has the Minister had a chance to have a look at those?


Senator Cook —I presume that the usual courtesies would have been entered into, knowing Senator McLean's reputation.

Leave granted.


Senator McLEAN —I thank the Senate. I have circulated copies of those two affidavits to the Minister who was previously at the table and to the shadow Minister on duty. They refer to the cases-I will cite them now, but not in detail-of Michael Patek, who has a dispute with the Westpac Banking Corporation, and Kenneth Whitbread, who has a dispute with the Australia and New Zealand Banking Group. I will not take up the time of the Senate by elaborating the details of these cases, but I have spent some considerable time examining them. They are of a nature that I believe warrant the attention of those senators who are pursuing with some interest this growing issue of banking and, specifically, allegations of malpractice and corruption.

I turn to one further matter which touches on the issue of bank charges and the attitude of banks to those charges. I have received a letter from a Mr D. G. Quinton who is a public accountant and who, like many of us, has a bank mortgage-in his case with the Royal Bank-and who sought an explanation of some of the charges which were being made on his account. He was either unable to follow the explanation or not satisfied by it and he pursued the matter; in fact, he has been doing so over some considerable period. He is obviously a very diligent and fastidious person who keeps very close records, is persistent and does not give in. He was dissatisfied with the responses from the Royal Bank. He approached the Australian Bankers Association concerning this dissatisfaction. He took issue with a press release which it had put out on 3 July 1988. I quote from that press release of the Australian Bankers Association:

Banks will undertake to provide the above information in such a way as to enable any customer who so wishes to calculate independently charges made by the bank and to verify their accuracy. Details of methodology employed will be available on request.

Mr Quinton took that assurance from the Australian Bankers Association on its merits. He sought an explanation for some of the charges. As I say, he was dissatisfied with, or unable completely to comprehend, the explanations that were given to him. However, more recently, in following up these matters, he has received a reply from the Royal Bank which, among other things says:

Please note that further correspondence, unless it is to do with refinancing, will be directed to our solicitors for reply. The costs of their attending to that work will be debited to your loan account without further notice to you.

So this bank has taken the attitude that if one is not satisfied with its answers, one cannot comprehend its answers, or one believes they are inadequate, once it has offered what it considers to be satisfactory explanations, any queries thereafter will be referred to its solicitors and one will be required to cover the costs thereof. Those costs, without further notice, will be debited automatically to one's bank account. That strikes me as a very potent way of truncating the process of open inquiry which had been assured by the Bankers Association in its press release of 3 July 1988.

Mr Quinton, being, as I say, persistent, took the matter up quite recently with the Australian Bankers Association. On 28 April this year he wrote seeking its intervention. He received the following reply. This is the entire text of the letter:

I refer to your letter of 28th April 1989 and advise that this Association is not a governing body for the member banks and it is not within our charter to become involved in individual bank-customer disputes.

That is probably a fairly reasonable position for the Australian Bankers Association to take, but it contradicts its press release of 3 July 1988 and it certainly does not resolve the sorts of difficulties in which Mr Quinton and others find themselves. There has been inadequate explanation of bank charges, and they face what could be substantial legal expenses incurred by banks to respond to requests for explanation. This attitude stands in marked contrast to that which has been espoused by the Australian Bankers Association in the recent suggestions that it will voluntarily set up an ombudsman process. The Australian Bankers Association, as you know, Madam Acting Deputy President, has undertaken to sponsor the process of a bank ombudsman. I think that is quite a positive first step, provided that we can assume the process encompasses a little more than banks looking at banks. We hope that the Australian public will get more satisfaction from this process than they received, for instance, from the process of police looking at police over the last decade or so.

I cite the Quinton case simply to illustrate what I have attempted to illustrate previously, and to demonstrate to the Senate that the ethos of banking and the attitude of banks stand in contradiction to their fundamental fiduciary relationship to the client which requires that they consider the interests of their client as being equal to their own interests. The Australian community has every reason to be dissatisfied with the posture of banks in the Australian community today. On future occasions I will continue to bring before the Senate serious matters in relation to banking.

This morning I had a protracted discussion in my office with a gentleman who is making most extraordinary allegations about the way in which he has been treated by banks in the last two weeks. I am investigating those matters further. Last Saturday I had several hours of discussion with a gentleman who, once again, has given me examples of very serious difficulties with banks which he believes have been inadequately investigated by the Australian Federal Police, the Victorian fraud squad and the Trade Practices Commission. I will pursue that issue further. If I believe it is responsible to do so, I will bring it to the attention of the Senate at a later time. However, on this occasion I seek leave to table Mr Quinton's letters and the correspondence he has had with the Royal Bank and the Australian Bankers Association.

Leave granted.


Senator McLEAN —I thank the Senate once again for its tolerance in this matter. I am quite sure that all honourable senators are aware of the fact that the issue of banking is one of primary concern to the Australian community. I am convinced that as time goes by, as we move towards an election, the Australian community will reinforce my requests that I have placed before the Parliament to regard the whole question of banking as one which warrants the attention not only of Government but of Parliament. I will at a later date again put before the Senate the proposal for a Senate inquiry.