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Banks face borrower revolt in NCCP class action

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Australian Broker | 16 Jan 2012, 07:00 AM Agree 0
Australian banks are being targeted in the first serious test of nascent consumer protections under NCCP, with a mass class action being readied by lawyers and distressed borrowers
  • ozboy | 16 Jan 2012, 10:09 AM Agree 0
    Mmmm good luck with that, didn't they actually apply for the loan?
  • Brad Q | 16 Jan 2012, 10:19 AM Agree 0
    I agree, applying for the loan indicates some form of agreeance that you can afford the repayments... that wont fly too well....
  • SMc | 16 Jan 2012, 10:26 AM Agree 0
    The borrowers circumstances, actions and personal habits contributing to defaults would be scrutinised under an impartial justice system. However, the same doesn't necessarily apply under trial by media, or by consumer groups.
  • Jaime | 16 Jan 2012, 01:59 PM Agree 0
    At what point in time will borrower’s accept responsibility for their own actions, they enter into a loan facility bright eyed & bushy tailed, full of enthusiasm encouraged by achieving the “Great Australian Dream”, often without having done any of the hard yards, wake up to yourself people, if you borrow money the key word “BORROW” you are required to pay it back under the terms & conditions that were documented BEFORE they signed up and took delivery of the dream, pay the bill or suffer the consequences I say.
  • Casey | 16 Jan 2012, 04:52 PM Agree 0
    Agree with Jaime. It is definitely a case of responsibility coming back to the borrower for the ultimate decision to accept the loan. NCCP puts the onus on all other parties to make reasonable enquiries and disclosures. When does the borrower have to take responsibility to declare they have taken reasonable steps to understand their commitment? However it also begs the question of wider community education which is the domain of the government. Without over simplifying the root cause, I think there should be some significant changes in our secondary education system. To begin a mandatory inclusion of financial principals of budgeting, borrowing and managing of financial affairs for every student not just those taking economics. Just image a better financially educated consumer making smarter, more balanced financial decisions that they can manage. OK enough daydreaming, back to work...
  • Jeff | 17 Jan 2012, 01:53 AM Agree 0
    So is the answer to cease lending to everyone so no one can complain. "Roger Brown" leading the charge, how about you take up bolws and stop making other people lives misery, you must have too much time on your hands, my son.
  • Donut | 17 Jan 2012, 07:33 AM Agree 0
    I am interested in how many of these, so called 300,000 borrowers had the loan organised by a broker. I can't imagine, under NCCP, that there would be too many brokers that would allow first home buyers over commit. I know I wouldn't and I don't know a broker that would. I am liking to theory that some people simply want to blame someone else.
  • Positive Broker | 17 Jan 2012, 07:47 AM Agree 0
    I would like to a class action for the opposite problem. How about the people with excellent track records and genuine savings who can't get a decent loan because a minor $400 telco default listed years ago. Banks & LMIs have forgotten the art of risk assessment and taken the easy road of credit scoring.
  • Country Broker | 17 Jan 2012, 08:20 AM Agree 0
    Is this a Fairfax and Legal Co beat up ? History shows , the courts are less than enthuastic about supporting claims like this , if there was a contribution by the borrowers to partial responsibility , the banks and the LMI companies in Australia have always been responsible in assessment of ability to repay using a 1.5% or 1.75% increase in the assessment rate over the actual rate, that will come out in any class action , the suitation of course was made in some ways created by the FHOG increase as part of the GFC stimilus package it helped many home buyers access te market , but it was and still is hard to get a deal approved if it is marginal, that should not change . the class action is ambitious.
  • Tim | 17 Jan 2012, 08:25 AM Agree 0
    Just another example of the Labour/Greens coalition of incompetence. You get an ex trade unionist like Bill Shorten holding hands with legal aid lawyer lobbyists and you get the NCCP Act. See you later NSW economy because all this results in is 'NO CREDIT FOR YOU!!!!'
  • Ujak | 17 Jan 2012, 09:04 AM Agree 0
    I hope the borower will return any profit made on the purchase back to the lender.
  • JohnnyWakko | 17 Jan 2012, 09:28 AM Agree 0
    Classic example of NannyState syndrome. Always someone else to blame. The old saying, "Banks are great when they give you money, but as soon as you have to pay it back."

    300,000 people need to grow up.
  • Viren Anand | 17 Jan 2012, 09:41 AM Agree 0
    I think this should have been expected,NCCP puts all the responsibility and blame on banks and brokers. Easy way out of a mess borrowers put themselves without understanding the implications of over commitent.
  • JB | 17 Jan 2012, 10:06 AM Agree 0
    AS Donut said how many of these so called 300,000 borrowed through brokers Im sure we've all had cases where we advise a client they dont qualify for a loan on servicability only to find Later a BANK branch has approved a loan?????
  • Allan Faint | 17 Jan 2012, 10:20 AM Agree 0
    amazing how people are no longer resonsible for their own actions. these idiots will now make it harder for those who believe a loan has to be repaid, as the banks will become more restrictive
  • JF | 17 Jan 2012, 10:23 AM Agree 0
    Jaime hit the nail on the head. I am fed up with borrowers trying to avoid responsility. I would also like to know the stats on how many of these are broker loans. At what point is a consumer accountable for their decision? Interesting point also Viren.
  • Roberta | 17 Jan 2012, 11:15 AM Agree 0
    With over 12 years as a broker, the single biggest complaint I ever get is, "Is that all you can lend me?" I don't doubt the banks and some brokers must share in some level of 'irresponsible lending' particularly in the case of some 'low or no Doc loans' but I still don't believe the home loan itself is the problem. Maybe the wide screen tv, the motor bike, new car, holidays on credit, new lounge suites and all those things us 'older' people had to save for. The ease of obtaining 'junk' credit, where you pay no deposit and no payments for 5 years is one major cause of financial distress. That's probably a bit to complicated for our current Government to understand, but it may give them somethiong to do, another reform with another compensation attachment.
  • Garry | 17 Jan 2012, 11:56 AM Agree 0
    When in hell are consumers going to start taking resonsibility for their own actions?
    Rarely is the home loan that puts them under preassure. Its what they do after the loan has settled and the lies they tell to the lending institutions for the multiple credit cards and personal loans. People of Australia need to grow up and look at their own spending habits and stop blaming the banks for their own stupidity.
  • Chris | 17 Jan 2012, 01:57 PM Agree 0
    Another thing that comes to mind is automatic credit card limit increases, people accept the increase spend the money and then when it suits blames the bank for giving it to them. Just because the local shop sells smokes doesn't mean we should buy them - I think people should start taking more responsibility for all aspects of their life.
  • Damien | 17 Jan 2012, 04:16 PM Agree 0
    Just another non-topic , that all of a sudden becomes a topic, just another sad reflection on this incompetent government
  • | 17 Jan 2012, 07:03 PM Agree 0
    I Think Positive Broker has hit the nail on the head...

    We have a system that makes it Bl%$#y hard for my kids to get a home loan these days and heaven forbid them having bad credit for not paying a bill on time.

    We help clients every day that have had their dream of home ownership Ripped out from under them after saving for years to get the deposit and associated fees only to apply for a mortgage and be declined for a small Telco or other type of default.

    And this supposed "positive Credit Reporting" that's due in soon, that'll make it great for the lender, not to great for the consumer...

  • John | 19 Jan 2012, 08:50 AM Agree 0
    I cannot understand how you can have a class action for 300000 people when every loan application is differant. surely they would have to be assessed on an individual basis.
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