A tale of two banks
The Bank of Queensland (BOQ) is believed to have threatened to sue the clients of financial planning group Storm Financial for misrepresenting their income levels in loan applications, according to a lawyer close to the issue.
The Bank of Queensland’s response to the issue is now in stark contrast to that of the Commonwealth Bank of Australia's (CBA's), with the latter acknowledging yesterday that it had found shortcomings in how it lent money to clients of Storm Financial.
Law firm Slater & Gordon has been acting on behalf of hundreds of former clients of Storm Financial, who were also clients of CBA and BOQ.
Slater & Gordon practice group leader Damian Scattini said the BOQ is yet to take any responsibility for its involvement in the issue, and in fact has said it “will sue the customers for misleading us about their income”.
He said the CBA’s admission yesterday was “obviously a welcome development”, and one that was in stark contrast to the response from the BOQ.
But BOQ head of corporate affairs Caroline Dunworth refuted the suggestion that the bank would take such action against individual clients.
The spokesperson for BOQ said the bank is not currently reviewing its lending practices in relation to clients of Storm Financial, but that any clients in a distressed situation would be considered on an individual basis.
Nationals Senator for New South Wales John Williams said the CBA’s admission yesterday was an overdue win for Storm Financial clients and one that would be “a boost for those investors who have been devastated”. Williams described the bank’s admission as “the first step in righting some wrongs”.
He said the Storm Financial issue had been “a public relations disaster for the CBA and other financial institutions”.
More details regarding the events that led to the collapse of Storm, as well as other failed financial services groups, will come to light in the public hearings for the inquiry that will begin next week.
Williams said he met with the Storm Investors Consumers Action Group (SICAG) last week, and that the group has “a mountain of evidence” to present to the parliamentary joint committee inquiry into the financial services sector.
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