Updated: 5 October 2020

What is the remediation program?

In its 2019–20 Annual Report, the Banking Code Compliance Committee (BCCC) publicly named Bendigo and Adelaide Bank (BEN) for serious and systemic breaches of the 2013 Code of Banking Practice (2013 Code). The breaches relate to customers within BEN’s Great Southern loan portfolio.

In connection with the BCCC’s findings, BEN has announced that it has commenced a program to remediate breaches of the 2013 Code and the ACCC/ASIC Debt Collection Guidelines in relation to some borrowers within the Great Southern loan portfolio.

This fact sheet provides information about AFCA’s role in relation to the remediation program. 


What is the Great Southern loan portfolio?

The Great Southern group operated various agricultural managed investment schemes that were offered to investors. Investors obtained finance to acquire interests in the schemes from Great Southern Finance or BEN. The various managed investment schemes became unprofitable and the Great Southern group companies were liquidated.

BEN holds the rights of the lender under the Great Southern loans, either because it was the original lender or because the loans were assigned to it by Great Southern Finance. 


What are the Great Southern group proceedings?

In 2010, investors in the managed investment schemes commenced group proceedings in the Supreme Court of Victoria claiming that they were not required to pay the amounts owing under the loans.

The Supreme Court of Victoria approved a settlement deed on 11 December 2014 to resolve the group proceedings. The settlement deed settled all actions and claims by group members about the validity and enforceability of the loans.


What does BEN’s remediation program cover?

BEN remediation program seeks to remediate breaches of the 2013 Code and the ACCC/ASIC Debt Collection Guidelines in relation to some borrowers within the Great Southern loan portfolio. These breaches occurred between February 2015 and February 2019. BEN has advised that the breaches occurred predominantly in 2015 and 2016, when it resumed recovery of debt which had been suspended during the course of the group proceedings.

Further details about BEN’s remediation program can be found on its website.

BEN has announced that it is identifying potentially affected borrowers who had active Great Southern loans from January 2015 and were assessed for financial hardship. BEN will review the loans and provide remediation to customers where it identifies that mistakes were made that resulted in an adverse customer impact that warrants remediation. BEN expects the reviews of all potentially impacted borrowers will take about six months to complete.

At the conclusion of these reviews, BEN will give the borrower a final decision letter, which will advise the customer of the outcome of the review and notify them that they can refer the dispute to AFCA if they are not satisfied with the outcome.


What can AFCA do?

We encourage affected customers to firstly contact BEN and participate in the remediation program. 

If a customer is dissatisfied with the outcome provided by BEN in the final decision letter under the remediation program, they can lodge a complaint with AFCA. A complaint must be lodged within two years of the customer receiving the final decision letter.

If a complaint is lodged with AFCA by a customer who was part of the remediation program, we will review the facts of the complaint and reach a view about whether the outcome provided was fair in all the circumstances. We will ask BEN to explain how it arrived at the outcome, including the information it relied upon and the methodology it used to identify whether a mistake was made and determine the amount of compensation. We will also ask the customer about their experience.


What Great Southern issues can AFCA consider?

As explained above, AFCA can consider complaints by customers who are not satisfied with the outcome provided by BEN under its remediation program. We can also consider any other issues raised by customers that fall within our jurisdiction, subject to the usual timeframes and other limitations that apply under our Rules.

However, there are a number of issues that we cannot consider because they are outside our jurisdiction – for example, issues that were dealt with as part of the settlement of the Great Southern group proceedings.

Issues falling outside jurisdiction

 

Issues falling within jurisdiction

Nature of issue

Why we cannot consider

 

Nature of issue

Why we can consider

Borrower’s liability under the loan
(including irresponsible lending)

This has been dealt with by the Supreme Court of Victoria.
AFCA will not consider any issue raised in a dispute that has been settled by the group proceedings.

 

Financial difficulty

We can consider financial difficulty disputes that do not seek to challenge the validity of the loan.
The obligation to give proper consideration to a customer experiencing financial difficulty is an ongoing Code of Banking Practice obligation that continued after the settlement deed was entered into and approved by the court.
However, we will not require BEN to refund any default interest charged before the date the Settlement Deed was approved (11 December 2014).

Liability under a guarantee provided in relation to the loan

This has been dealt with by the Supreme Court of Victoria.
The Settlement Deed settles all actions as to the validity and enforceability of the loan agreements, including security (such as guarantees).

 

Credit listing before 11 December 2014

This has been dealt with by the Supreme Court of Victoria.
A default listing dispute has been dealt with by the group proceedings. 

 

Breach of debt collection guidelines

We can consider complaints about breaches of debt collection guidelines that do not seek to challenge the validity of the loan. We can consider these complaints even if BEN has obtained judgement for the debt.

Interest or costs before 11 December 2014

This has been dealt with by the Supreme Court of Victoria.
We cannot consider a dispute about the amount to be paid under the loan, including interest and costs incurred before the date the Settlement Deed was approved (11 September 2014).

 

Interest (including break cost) applied after 11 December 2014

The Settlement Deed required BEN to waive ‘Interest Relating to Overdue Amounts’ accrued and unpaid as at 11 December 2014. This term is defined in the deed. 
We can consider complaints about interest and charges (including break costs) applied later that do not fall within the defined term in the deed.


Who do I contact about my concerns?

Who you contact depends on the nature of your concerns, whether you have received a final decision letter from the remediation program, and whether AFCA has jurisdiction to consider your complaint.

  • If you have questions about your loan or the remediation program, contact BEN on 1300 896 818.
  • If you are dissatisfied with BEN’s review, you can contact AFCA through our website at afca.org.au or by phone on 1800 931 678. AFCA will then consider if we have jurisdiction to consider the complaint.
  • If your concerns fall outside the scope of both the remediation program and AFCA’s Rules, you should seek legal and/or financial advice about your options. For example, the remediation program and AFCA will not consider matters that have previously been addressed in court, such as the enforceability of the Great Southern loans. 


What is AFCA’s role?

We are an independent complaint resolution service offered as a free alternative to the courts. Our role is to investigate and resolve complaints about financial firms that are AFCA members that come within our Rules. You can find out more here.

AFCA does not regulate the Australian financial services industry. The regulator is the Australian Securities and Investments Commission (ASIC). You can find out more about ASIC’s role on its website.


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