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.

Remember Venn diagrams

Venn diagrams are the shapes we used to draw in primary school maths to show ownership or membership relationships…

Venn diagram
vɛn/
noun
 1. a diagram representing mathematical or logical sets pictorially as circles or closed curves within an enclosing rectangle (the universal set), common elements of the sets being represented by intersections of the circles.
a20subset20b1

Another sleepless night last night…in all fairness to ANZ’s cumbersome bullying, I popped a disc in my back a couple of weeks ago: while improving, it is not helping at the moment and I find that it disturbs my sleep less if I leave the ‘lectric blanket on…the flip side of that is that the extra heat keeps the rest of me awake…lots of time to think…

It occurred to me about 3AM that the definition of security in the Code of Banking Practice is consistent with the definition of security in the original guarantee. the root of my problem. That’s this definition which quite clearly includes a guarantee as a subset of security:

guarantee security

Similarly, under the Code’s definition, under the guarantee the bank still has security for the credit that it extended to my ex-partner’s company

security 3

I really don’t think that we need top split hairs over this one anymore. Even if we did, what would take precedence, noting that the Code is just that, a Code and not a law: what ANZ writes in its own documentation – we still assume that it is competent – or what is in the Code?

I would argue that ANZ’s wording indicates a higher standard than the Code requires – for which ANZ should be commended – and thus that higher standard, that it has set for itself, is the standard that we should expect ANZ to apply…would that be fair? Reasonable? Consistent?

Hmmm…those words again…

Tap dancing

For most people tap dancing may be Shirley Temple’s main claim to fame, but it also has a specific sense where someone is desperately trying to avoid being called on a subject. Having set the scene, let’s see what ANZ’s Customer Relations team had to say….

They start with two extracts from the Banking Ombudsman’s guide Guaranteeing Someone Else’s Debt:

custome rrelations 1

Nice but whatever…nothing there says that ANZ cannot disclose information on company lending to the guarantor of that lending. Remember, ANZ has already said that it has an obligation to disclose this information if it is likely to cause the guarantor to affect their decision to give or continue to give the guarantee; or if that lending is beyond what was contemplated at the time of the guarantee being given. This guide does not – not once, anywhere – say that a bank may not disclose information on a company’s lending to the guarantor of that lending. 

ANZ continues…

customer relations 2 Now, this sounds good but when you read it, it is actually only talking about disclosing if the guaranteed company has financial difficulties, and even then, it only says that the bank could be in breach if it does this. ‘Could’ not ‘would’! I’d argue that the circumstance of financial difficulty would also qualify as something likely to cause the guarantor to affect their decision to give or continue to give the guarantee. This does not say that a bank may not disclose information on a company’s lending to the guarantor of that lending.

Would you not think that if there was a clear legal obstacle to disclosure ANZ would have cited it by now?: Wouldn’t you…if such an obstacle existed..?

security 1

Now we’re starting to get into some nitty-gritty…ANZ may choose to believe that the separation of security and guarantees is intentional. It is certainly convenient for it to believe so however its guarantee defines security:

guarantee security

In other words, the guarantee, the root of this whole problem defines a guarantee as a subset of security. It is reasonable then to expect that anything that applies to security then, unless stated otherwise, to guarantees.

The Customer Relations team continues…

security 2

No, the Code’s glossary does’t say that. It doesn’t say that at all. It doesn’t even list ‘security providers‘ let alone offer a definition for that phrase. The 2012 Code of Banking Practice defines ‘security‘ as:

security 3

I have included the items above and below ‘security’ to show that there is no other listing for ‘security provider’ in the Code’s glossary. The glossaries for 2007 and 2002 versions of the Code have the same definition of ‘security’and no definition for ‘security providers’.

Just for the record, here is the Code’s definition of a guarantee:

security 4

This is also the same in the 2007 and 2002 versions.

I think it’s reasonable to assume that ANZ employs competent staff. If not, it’s up to ANZ to prove that its staff are not competent. What does it say to you when a staff member from a major banking institution like ANZ makes a statement that is so patently untrue..?

What didn’t they say?

Not one thing about their obligation to disclose material change in the lending to a guarantor. Not one word. Just tap danced right around that one…

Legal advice

In her response to me, the ANZ regional manager told me that I should have obtained legal advice before giving my original guarantee.

I did. In fact, I had to as that was a legal requirement then (it possibly still is). That consultation was for me a bit of a non-event: I made an appointment with a solicitor – I didn’t have one of my own – and met with him for all of about twenty minutes.

He was quite dismissive of the whole thing “Nothing really to worry about” “I don’t know why there’s still a requirement for legal advice for one of these” referring to the draft guarantee. On the basis of that reassurance, I signed the guarantee and he witnessed it.

I approached him, describing my current situation, recounting my recollection of our meeting, and requesting his thoughts.

His response was that such a guarantee is nothing to take lightly and that he would have given me all the appropriate advice and warnings.legal 1.png

As all his advice was verbal and I received nothing in writing, I expected that this would be a he said/she said stand-off. What he proceeded to say was a lot more interesting:legal 2

legal 3.png
Highlighting is mine

Like a bank manager, one would reasonably expect a lawyer, having been read into the situation, would give credible advice. I mentioned several times in my initial email that this matter related to a company account and  also attached a copy of the original guarantee that he had witnessed for me in which this is clear.

At time, in the face of everything else going on, I simply thought he had gotten this wrong, although he had been confident enough to put this opinion in writing. More recently, having trawled through every relevant piece of documentation and correspondence that I have, I could not find a single thing, rule, law that obstructed the disclosure to a guarantor by ANZ of changes to lending that he had guaranteed.

He may have been right, after all.