Michael Sanderson is"ecstatic" that the corporate regulator is taking the Bank of Queensland and Bendigo and Adelaide Bank to court for imposing"unfair" contract terms on their small business customers.Many banks had"non-monetary default" clauses in their loan contracts, particularly for business customers
In Mr Sanderson's case, it was due to his"change of circumstances" — as the value of his property had fallen below the amount he borrowed .That is one type of"unfair" term that BoQ and Bendigo and Adelaide Bank — via its subsidiaries Rural Bank and Delphi Bank — allegedly put in their contracts, the Australian Securities and Investments Commission will argue.
Unfair contracts also give banks a one-sided discretion to alter the terms — without the consent of the borrower.
Why do I find this report both alarming and no surprise at all? The big four banks all got doing this by the Royal Commission, but they didn't get to the next level, headed by the Bendigo Bank. I can only assume that if the big four are doing it, the number 5 saw fit to joint in.
'BoQ initially 'over-valued' his property (at $900,000), before deciding to slash its value to less than half ($435,000) five years later' Is this the customer being penalised because the bank over-valued the property? Surely not but I cannot see any other way to read this.