Loan applications falsified

As a minor Westpac shareholder I was amazed today to read in the Sydney Morning Herald that Westpac is reported to have paid $7.6m in compensation to customers for the fraudulent conduct of its subsidiary RAMS, by falsifying loan application details. Borrowers should beware of the bank debt trap. It is widely used by banks and unseen by most borrowers. That is because borrowers are just delighted to get a loan. They mostly forget to check whether they will be able to repay, particularly if their circumstances change. Lenders’ loan insurance protects the bank but not the borrower. It simply transfers to debt to the insurance company which then sets debt collectors onto the borrowers.

Over a decade ago I discovered that a Westpac bank manager had done that to farmers applying for a loan to purchase a property that had been recommended to them by that bank manager.

In another case decades ago Westpac allowed a young widow with young children to guarantee her brother’s business loan with a mortgage over her home. She had no financial or business knowledge at all. When the brother’s business failed Westpac sold up her home leaving her homeless.

Bank theft exempt from prosecution??

Why is the Federal Government not currently prosecuting the Westpac directors for frauded and breach of Corporations law. Why is Westpac allowed to hold a banking licence at all when its customers could easily be spread around other banks?

Ordinary thieves go to gaol

SMH also reports today on a mother and teens breaking into shops and stealing up to $150,000. That family could end up in gaol for far less criminality than Westpac directors who share  glass of wine around the boardroom table as they laugh about the customers whose lives they have ruined.

Directors need to do what they are paid for

Bank directors are elected and paid handsomely to direct the bank’s operations in a way that is honest and helpful to customers. That responsibility requires them to ensure the design, application and monitoring of systems to do that. That’s their job!!

Gaol for directors as well as minor crooks

Big Bank Billions have been earned on the back of fraudulently lending money to people who could never afford the loans, then robbing them blind with penalty interest rates for years, before selling them up. Gaol is the most appropriate place for Westpac directors right now. That might wake up the directors of the other banks who also make their profits and fees by directing staff to entrap customers in unaffordable loans.