When threatened by a bank there are three main ways borrowers react:
1. They pay in fright either by selling assets or re-financing
2. They put the default notices in the bin or bottom drawer and hope the problem will go away
3. They engage a financial counsellor who comes free, is mostly government funded, may receive funding from banks and who knows the local banks so well from constantly dealing with them that they will not take very heavy action to seriously disadvantage them. Such counsellors may also not wish to go against the government which in fact allows banks to behave so badly towards borrowers. 4. They engage an independent banking consultant to fight the bank with the intention of winning in a substantial way. That is where GBAC comes in.
Taking on the bank has proven to be very effective and profitable. Many borrowers have earned more money by fighting their bank over loan treatment than in the previous 5 or 10 years of running their business or farm.
The first step in fighting the bank is serious research. That includes learning all about the circumstances under which the bank was approached for or marketed the loan. It is vitally important for this research to be thorough so that the bank cannot drop any unpleasant surprises on the consultant during negotiations. It will generally be found that the bank has broken the law somewhere along the way. Don’t most people sometime travel at 60 in a 50 zone or 115 in a 110 zone, breaking the road safety laws?
The recent Banking Royal Commission did not even scratch the surface because the politicians who tried to prevent it happening insisted on such a short time frame that only a tiny fraction of bank dishonesty was aired and probably not the worst of it.
Once such dishonest action has been identified it needs to be very carefully investigated to obtain all the facts. In addition to blatant dishonesty, many banks indulge in what one might describe as stupid lending practices. They lend to people who do not have and never have had, any chance of servicing and repaying the loan in accordance with the loan terms. In this way banks bait a customer trap into which the customer walks and cannot get out. They are stuck with a loan that can only grow larger and attract more and more interest. Banks do it to acquire the security property which can be sold with huge recovery costs added to the already blown out debt. The property may be owned by the borrowers or guarantors.
The second step is to prepare a vast array of information to send to Members of Parliament asking them to investigate the specific activities of the particular bank. This information can be sent to all MPs in small packages over a long period of time so that the MPs can become familiar with what that bank is doing. It is probably treating many clients just like it is treating this borrower. This is a reserve strategy in case the bank declines to negotiate in good faith, which is often the case. Members of Parliament can bring a dishonest bank to its knees, having regulators prosecute directors and staff and even considering its fitness to hold a banking licence.
The third step is to prepare for and execute a very serious negotiation with the bank for the borrower to be compensated for all illegal or predatory conduct to the full extent that it has affected their business or health. A firm like GBAC would send senior consultant to negotiate for or with the borrowers. They know both the banking industry, having negotiated for bank clients since the first moves to de-regulate banks in the 1980’s. They also have intimate knowledge of politicians and the political processes by which borrowers are most likely to obtain justice if the bank will not treat them fairly. It is time-consuming and stressful, but can pay very big dividends. Banks have written off up to 50% of debts negotiated by GBAC over the last 25 years to compensate for their wrong-doing.
One does not have to “Hate” the bank simply because it has done something silly or wrong. Most people and organisations do that some time. What is important is having all of the borrower’s suffering taken into consideration and securing a settlement which the borrower and the bank consider to be fair. It is extremely rare for the entire blame for a debt in default to rest with the borrower. The bankers are the experts and all Australian banks have been doing it for at least 100 years. They know lending far better than the borrowers do.