About 400 angry ex-Bankwest customers say the bank has been colluding with property valuers to force commercial borrowers to default on their loans.
The Perth-based bank is facing two potential class actions over the way it re-valued assets and called in the loans of hundreds of its small to medium-sized business clients after a takeover by the Commonwealth Bank in 2008.
About 400 former Bankwest loan customers, who have formed a group called Unhappy Banking, says Bankwest has been aggressively manufacturing loan defaults since the CBA takeover.
Unhappy Banking founder Geoff Shannon said he believed Bankwest had, in many cases, scrapped previous valuations and replaced them with lower ones to trigger loan defaults.
He claims the bank took unnecessary recovery action.
Unhappy Banking’s concerns have sparked a broad Senate inquiry into banking practices during the global financial crisis.
Mr Shannon claims valuers were working with the bank to deliver the low valuations it wanted.
He has shown AAP email correspondence he says is between two senior Bankwest staff about a former borrower’s property.
The email says: “I have spoken to the valuer again Friday to gauge his opinion and I suggested a reduction of say 20 per cent on the existing valuation …”
Senator John Williams, who successfully pushed for the Senate inquiry along with Mr Shannon, said he’d seen the email and found it very concerning.
“Valuers are supposed to be at arm’s length. But to see a bank suggesting a 20 per cent asset reduction does really concern me,” he told AAP.
Unhappy Bankers and law firm Slater & Gordon are investigating separate class actions on behalf of aggrieved former Bankwest commercial borrowers.
Both are looking at the conditions around the CBA’s purchase of Bankwest and how that may have negatively affected some borrowers.
Senator Williams said the Senate inquiry, expected to begin hearings in August, would probe those conditions, and allegations of collusion between the bank and valuers.
He said he’d also seen documentation from several former Bankwest borrowers who’d never missed an interest payment but were forced into foreclosure.
“I can’t work out why a bank would sell someone up when they have never missed an interest payment and this is what I am seeing,” he said.
Mr Shannon said Bankwest used “ruthless” tactics that brought borrowers to their knees.
“Many of our members lost everything. They lost their homes and were reduced to sleeping in their cars,” he said.
Bankwest denies the allegations and blames the lower property valuations on the global financial crisis.