News

Rural debt: Qld cattleman’s win over major bank

James Nason, 31/08/2015
ANZ chief executive officer Michael Smith apologies to Winton cattle and sheep producer Charlie Phillott (image from footage televised by Channel Nine's 60 Minutes Program).

ANZ chief executive officer Michael Smith apologies to Winton cattle and sheep producer Charlie Phillott (image from footage televised by Channel Nine’s 60 Minutes Program).

The boss of ANZ has personally apologised to an 81-year-old Queensland cattle producer after the bank attempted to force the veteran landholder off his family property of 50 years despite having never missed a loan repayment.

Channel Nine’s 60 Minutes program last night focused on drought-ravaged Carisbrooke Station at Winton where Charlie Phillott and his family have been fighting moves by ANZ to evict them from the property for close to five years.

In 2010 the Phillott’s loan was acquired by ANZ when the bank purchased Landmark’s loan book. The program reported that within months of that takeover dozens, if not hundreds, of former Landmark borrowers found themselves facing default and foreclosure.

Journalist Michael Usher said the bank was accused of using aggression and legal bullying tactics to remove some of those loans from its books.

Mr Phillott told the program that following ANZ’s takeover of his family’s loan, the value of his property was halved without notice, his funds were cut off and his loan was defaulted even though his family had never missed a payment.

In a stunning turnaround, the program last night captured ANZ chief Michael Smith’s visit to the property where he personally apologised to Mr Phillott for the bank’s actions.

Mr Smith said he had instigated a thorough internal investigation of the Phillott’s case following extensive media coverage and found the bank had been at fault.

Over a pannikin of billy tea on a red ridge overlooking the vast Winton property, Mr Smith told Mr Phillott he was sorry for what the bank had put him and his family through, adding that it “hasn’t been our finest hour”.

“I felt we had not covered ourselves in glory to be perfectly honest, there was quite a bit of fault on our part,” he told Mr Usher during the 60 Minutes program.

Mr Smith also revealed last night that ANZ will add a nationwide one year extension to the one-year-moratorium on foreclosures where farms are affected by drought, which the bank announced in early December last year.

Following Mr Smith’s intervention in their case, the Phillotts will effectively get their farm back plus a reported “six figure” compensation sum that will help them to overcome the cost of having had their operation put on hold while trying to fight the eviction.

It is a significant turnaround from May, when, according to the program, the bank demanded Mr Phillott come up with $600,000 to buy back the central-west Queensland property or accept $25,000 “to walk away and stay quiet”.

“It’s taking time to digest,” Mr Phillott told Michael Usher on 60 Minutes. “We don’t celebrate it. We’re thankful for it but it was a long time they put us through it for no reason at all.

“It was unnecessary (and) it should never have happened.”

Coincidentally, Mr Phillott will speak today at a Rural Debt Crisis Summit being hosted in Charters Towers today by the Katter Australia Party.

On last night’s 60 Minutes program Mr Katter urged farmers who are being shut down by banks to stand up and fight, stating that “there are people who will come in on your side”.

Clawback schedule

The program also suggested that ANZ had used a “clawback” schedule written into the Landmark purchase agreement to foreclose on loans of the former Landmark borrowers, often without having personally visited any of the clients in question or their properties.

Mr Usher told Mr Smith it appeared that since taking over the Landmark loan book in 2010, ANZ had used a very deliberate, systematic strategy to revalue equity, downgrade the value of properties and engineer them into default.

“It was in the best interests of the bank under that clawback provision that these loans were seen to be unprofitable,” Mr Usher said.

Mr Smith denied the bank would do that, saying “that is just not how a bank operates”.

“The best thing we can always do is to get the loan repaid and to make the customer successful, that is why we lend money to people,” he said.

“I understand the logic, but I don’t think it is a realistic logic from the bank.”

He said that in an organisation the size of ANZ, inevitably sometimes things go wrong.

“I admit that. We can’t always get it right,” he said, later adding that the bank had been “too legally processed.”

“The fact that there are cases that fall through the cracks is very unfortunate,” he said.

Banks should not allow cracks to open

A private debt strategy consultant has told Beef Central this morning that it was unacceptable for banks to allow clients to “slip through the cracks”.

Former high-level banking executive Damien Simonfi is the chief executive officer of private debt strategy consultancy DJ Partners in Melbourne, which specialises in negotiating with banks on behalf of borrowers.

“We saw Michael Smith say last night that is unfortunate that some people slip through the cracks,” Mr Simonfi said.

“Well it is not unfortunate, it is unacceptable, none of them should slip through the cracks, and if you are understaffed, get the right people in there to do the right job, because that is someone’s life you are dealing with.

“Not all banks are bad, there are good banks and bad banks, there are good people in banks and bad people in banks, there are good clients and bad clients as well, but what we look for are clients who have had an injustice that don’t need to go through the wringer, they simply just need somebody to put a bit of professionalism around their matter, because it is their life.”

Mr Simonfi said that what 60 Minutes documented last night was not a one-off but a systemic issue.

“It really is a systemic issue because we have had half a dozen Landmark clients that were shifted over to ANZ who had never missed a payment but are in technical default,” Mr Simonfi explained.

“They do engineer it, and I don’t care what anyone says, I am a banker by trade, I know how banking systems work.”

‘There are always options’

He said landholders should realise there are always options and to seek professional assistance when they find themselves in difficulty.

“Everyone has options, the problem is they don’t know what the options are,” Mr Simonfi said.

“When times are good you get the Rolls Royce treatment from the area manager, but if something goes wrong, you are dealing with someone at the back end of the bank, they don’t know your property, they don’t understand your property intimately like you do or the highs and lows, they have a mandate and they have the KPIs they have to meet.

“They go through the motions and it is a bit of a slow steam roller if you want to call it that.”

Options included dealing with different business streams in the bank, Government backed mediation services and ombudsmen, and putting credit science around the problem.

“The best option available is you have someone who is in your company or on your on your property that can speak bank language and understands litigation, they understand the pressure points, they understand bank’s appetites, they understand credit science, they also understand their own business and that is how you convince a bank to use their discretionary powers, because the heavy handed stuff (of bringing in lawyers) just doesn’t work for clients, they almost always come off second best.”

  • To view last night’s 60 Minutes segment “Charlie’s Victory” on the Channel Nine website, click here

 

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Comments

  1. Marie Parker, 02/09/2015

    Soon to cease being an account holder of ANZ. Appols over Billy tea is one thing. But I am sure this shyster still hold his big annual salary etyc. Too little, too late.

  2. JAY STEPHEN, 31/08/2015

    Very true Michael, there is more to this story, good on Charles for standing his ground , unfortunately there are many in this simular situation that have been “bluffed” by these rotten banksters and have capitulated to their (bank demands particularly ANZ and several other majors , using grubby receivers to do their dirty work). In particular note under “the Claw -Back” options of the sale agreement between the two mentioned parties, and how that was unlawfully used !!.
    Jay Stephen

  3. Edgar Burnett, 31/08/2015

    Would this have happened if Alan Jones, Bob Katter and Rob Katter and the resultant media coverage had not not got involved?

  4. Michael Vail, 31/08/2015

    Finally some common sense.

    Being in default means you have missed more than one payment, and a pattern has emerged without consultation with your lender. Technical insolvency is where you are unable to pay your debts as and when due.

    Neither of these events happened!

    Why did it take 5-years to remove the blinkers?

    More questions to be added, and answered in this matter …

    When will the quantum of rural debt figures, and the trend in data be released?

    Michael Vail

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