It comes to this…

 

A little over two years down the track from the surge of activity in the initial stages of this blog…the final stage, I guess…

In those two years, I ditched the lawyers who could not follow instructions and got recommended to one who wanted to get into the fight. In November 2016, we submitted a detailed complaint to the Banking Ombudsman. It was about 20 pages, cross-referenced to all the supporting documents.

The response from the Banking Ombudsman was that it was the same as the original complaint from 2014. ???? How can that be when the new complaint refers to information, including the loan documents that we didn’t have in 2014? Howq can that be when the 2014 complaint only referred to ANZ’s statements that it did have an obligation to disclose information to guarantors under certain criteria (which we said existed)

Draw your own conclusions if you like. 2014 complaint. 2016 complaint

After three months of pushing the Banking Ombudsman finally deigned to consider the issues raised…kind of…she managed to squeeze a response to the dozen or so questions raised into a single page.

Well, actually, she didn’t…she only considered one small part of the problem and probably hoped that the rest would just somehow go away…feb 17 other.JPG

The use of the ‘ and/other’ construction is not confusing – except possibly for someone trying to weasel out from its common meaning. If we say “apples and other forms of fruit” are we including apples as forms of fruit? Yes, we are. Unsure about this? How about if we spin it around and say “apples and other forms of vegetable”. No? Doesn’t work for you either…?

The Code of Banking Practice is what it is and says what it says not what the ANZ would like it to say or what it might say to make life less challenging for the Banking Ombudsman. It’s in black and white.

What is interesting and totally overlooked by the Banking Ombudsman is that ANZ’s own documents list guarantees as forms of security:

guarantee security
from the guarantee
loan doc security
from one of the loan documents

As Al Gore might say, an inconvenient truth….

And this is the crux of it…by failing to disclose this information to me – as it was required to – ANZ denied me any opportunity to prevent further lending, and mitigate or repay existing debt…

Even after I raised my concerns with ANZ – after learning almost by accident of the debt in 2013 – it still refused to disclose this information…but that’s our next story…

Building the community

Our case is getting to the point where we are confident enough of our position to start determining how many other New Zealanders may be in this same unenviable position…where they guaranteed a company only to later find that ANZ has extended credit far beyond what was ever envisaged at the time of giving the guarantee – that’s bad – and has not fulfilled its obligations to disclose that lending to the guarantor(s) of the lending – that’s worse….

We would be interested to hear from anyone who has given a guarantee to ANZ to guarantee company loans i.e. not personal loans that are covered by the Credit Control and Consumer Finance Act 2003 (CCCFA).

We would like to hear from anyone that ANZ did not disclosure details of the amounts lent, especially if changes to that lending were of a nature that is significant and reasonably and objectively likely to affect a guarantors’ decision to give, or continue to give, the guarantee; or a significant increase or change beyond what was contemplated when the guarantee was given.

We are also interested in any circumstances where ANZ has cited the CCCFA as reason to not disclosure information on company lending to the guarantor of that lending e.g. statements that, under the Credit Contracts and Consumer Finance Act (CCCFA), ANZ is not obliged to provide disclosure to a guarantor in respect of further lending when a business is involved; or that the CCCFA controls the level of information that ANZ is allowed to provide without overstepping the privacy of the company.

Legalling up

In July things go to the point where I felt I needed more to support to see this thing through to the end. I had to lawyer up partially to validate my position as being more robust than just my opinion; and also to introduce another voice into the conversation. I think that ANZ was getting the point where it was just tuning me out regardless of what I was saying.

So, legalling up…an interesting experience…my first big lesson was choose your law firm carefully….I went with a local firm that had some some minor work for us in the past…I mean, like, all lawyers are the same…right…? Well, no…the first firm I went to was absolutely useless…provided bad advice (based on the wrong legislation), did not follow my instructions (which they are obliged to do so long as those instructions are legal and ethical) and in the end decided it was all too hard…waster three months I could not afford to lose with those losers…

The new lawyers, recommended by a personal friend with some experience in these matters, appear a lot sharper, are asking all the right questions, and hopefully will be able to help bring this to a favourable resolution…watch this space…

#anzdotherightthing

Escalation

That first contact scenario took two months into the early part of 2014.

After a month and that branch manager still had not responded. I escalated my request for this information. I did this through the ‘contact us’ email address off ANZ’s webpage – you can’t do that directly now: you have to fill out a contact form. If you do fill out the form, you will however get a response from a monitored email address that you can then use.

In my email, I asked again for the information on the company’s lending to be disclosed to me, as required by the Consumer Credit Control and Finance Act 2003 (CCCFA). You know, the legislation that ANZ cited to me as governing this kind of disclosure.

A couple of days later, this lovely lady (she was, really, very pleasant to chat with) called me to get an initial feel for the issue. I thought that was good but also quite clever – no word by word record of a phone conversation.

Her written response to me was interesting – and arrived only a few days after we spoke: not everyone in ANZ feels they need to drag the chain.

Relevance of the CCCFA

Escalation CCCFA.png

OK, that’s fine. That’s what the Act says. But it surely begs the question: why did ANZ say this if the CCCFA does not apply?CCCFA 1.png

Access to company information

escalaltion - company info.png

Actually, no I didn’t…I stated that ANZ had been negligent in disclosing changes to the company’s lending that did, or had potential to, affect my guarantee; and I asked for ANZ to confirm what my actual liability was.

ANZ does not actually state what legislation does cover disclosure of company lending to the guarantor of that lending. He says again and again that it can’t disclose this information to a relevant interested party like a guarantor but it cannot state what the actual legal obstacle to that disclosure is.

To be continued…

 

Context

Just to add some context around ANZ’s approach to lending, specifically to disclosure and consultation.

I didn’t know very much about this stuff (that has all changed now!). My approach to money has been that you live within your means and occasionally might take out a loan to cover a big ticket item like a car. Of course, the biggest ticket item that many of us are likely to take a loan out for is, of course a home. But even then, you live within your means, you scrimp, you save and you make it work…but the key thing is living within your means…you don’t take out loans that you cannot repay…

In our personal/joint accounts, ANZ took this to the nth degree of pedantry i.e. it was super-pedantic about making sure it consulted with each of us and received our permission before allowing even a small $1-200 extension to our joint overdraft to cover perhaps a pay whoopsy or something like that. Even with two pays going in fortnightly and good payment history, ANZ would still insist on full consultation and our joint approval before enabling any extensions of credit…even small ones…even for only a couple of days…

To be honest, as annoying as it could be at times, I was comfortable with this rigour. I liked that ANZ took this care to ensure that we were both in the loop for any changes to our commitments – no surprises….

Well, they say you don’t know what you don’t know…as the next Act reveals…

First contact

A few months after my partner and I separated, ANZ contacted me.

full guarantor disclosure.png
Highlighting and redaction is mine

This contact was from the manager of an ANZ branch. Being the manager of a bank is a position of some status and I think it is reasonable to assume that bank managers in New Zealand are competent. Certainly I do and I think the onus is on ANZ to prove otherwise.

This is ANZ, coming to me, off its own bat, to ask me about a change to the company’s lending. Please note:

“…I thought it would be prudent to contact you to disclose this information beforehand…”

“…Full guarantors disclosure would be sent to you once it has been set up…”

Does that sound like an ANZ branch manager thinks that ANZ should disclose changes to a company’s lending to the guarantor of that lending?

I responded that I was cool with that holiday but asked for more details on the company’s financial position and to be consulted on any further changes. One of the reasons, beyond simple good practice, was because the stated $36.99/day interest rate seemed a little high for the loan of approx $90k that ANZ had asked me to approve 3-4 years before.

CCCFA 1.png
Highlighting and redaction is mine

I did what most of us would do when referred to a section of legislation; I downloaded it and read it. Oh dear…that Act (CCCFA for short) doesn’t say that at all…

CCCFA - disclosure to guarantors.png

…in fact, it says exactly the opposite…

I responded, pointing this out and asking for the disclosure of the information required under the Act that ANZ had cited. That’s important: ANZ, a major international banking institution, introduced this legislation as governing the disclosure of information relating to company lending. Is it fair and reasonable of me to expect that it knows what it is talking about?

ANZ’s response? Nothing. Nada. Zip. Zilch. Radio silence.

Act I ends.