Bombshell! Denise Brailey on the mortgage fraud that will smash Australia’s financial system!

26 Sep

Ms Catherine Livingstone


Commonwealth Bank of Australia

Ground Floor, Tower 1.

201 Sussex Street

Sydney NSW 2000

2nd January 2018,

Dear Madam Chair,


Our consumer group has been supporting victims of bank driven mortgage fraud for over a decade. Our members come from every state in Australia. The complaints we receive as a support group are mostly with the Major Banks and predominantly relate to Mortgage Fraud and unaffordable interest only lending. My experience in such matters regarding fair and responsible settlements with banking complaints date back to 1996.

As the head of BFCSA (Inc) I have been compelled to write to you as Chairman, and the members of the CBA Board, to specifically alert each one of you to the difficulties our members face when dealing with CBA complaint handling services.

The main issues are those of: –

Fairness in the approach to settlement of complaints,

2. Legal issues offered that are clearly erroneous (as per the lead of the Courts)

3. Decisions delivered that clearly advantage the Bank, rather than the Customer

4. Bank Lawyers are driving the agenda and outcomes and not consumerism.

5. Lack of knowledgeable well-trained staff engaged to deal with the significant problems experienced by CBA customers: compounded by erroneous thinking that somehow the customers are responsible for the borrowing in the first place and that the bank has some right to then profit from the approval of the mortgage, despite the deceptions uncovered in relation to approvals of unaffordable loans.

6. Lack of understanding of the grief attached to home loss and homelessness.

7. Lack of training as to the inappropriate approval of such unaffordable mortgage loans in the first instant.

8. The refusal of CBA to hand over the full set of documentation, given the seriousness of allegations made by the bank to its customers.

9. The handing over of discoverable documents (hidden from customers) include: the complete Loan Application form signed by the customers, the FOSSIC Notes, the completed Tracker, the Serviceability Calculator “attached” to the complete LAF and the Valuation, since that specific document is responsible for other misinformation and therefore deserving of scrutiny relating to the LVR.

10. The Boomerang letters sending the complainant from one department to the next with the same outcomes for one-size-fits-all: close the file.

11. The Bank has the power of policy to override the excuses on offer within the structure and hierarchy of the Institution.

12. CBA has refused to use those powers to benefit their aggrieved customers.

FOS inappropriate handling of the complaints during the past decade, has thus caused the boomerang system of complainant handling to have complainants return to the IDR system.

CBA customers are the end users of the complaint handling system. The allegations on each file received by CBA are very serious indeed and deserving of a higher standard of scrutiny and outcomes.

Since our group is acknowledged by authorities as being the peak consumer group in Australia, experienced in the discovery of widespread mortgage fraud in the banking industry, we are seeking to remedy some of the more serious cases. You may be aware that my work is voluntary, and I use my skills as a criminologist, specialising in the investigations of white collar crime, to assist borrowers of mortgage loans. I wish to point out that our members are not complaining about the courtesy or otherwise of staff.

I am asking the Board to insist that a well-educated person with a background in law, history of banking and economics be appointed to deal with the more serious cases. There must be a genuine line of communication rather than the “flick” method of “hardship” plans that CBA staff seemingly have been instructed to adopt. Covering up of bank “errors” is hardly the best way forward for the bank, nor its customers.

Whomever is responsible for the framing of this inept version of consumer policy is not overly assisting the CBA’s image right now.

Our BFCSA case letters are initially sent to your Chief Executive Officer, Mr Narev and then passed down to the “basement” version of complaint handling system. Our collection of “flick letters” are not the most appropriate way to handle a scandal that has caused widespread calls from all States in Australia, for a Royal Commission into Banking. Our aim is to act with fairness and come to some arrangement of settlement to the benefit of both parties.

Customers need outcomes that lead to various types of settlements which can easily be discussed as I have done in the past and achieved good results with other banks.

The Federal Government is asking for changes in lending conduct to be made. The Customer Experience in complaint handling through the EDR’s has proven to be woefully inept and, not in-keeping with best practice. Suffice to say FOS does not follow the lead of the courts and is inclined to cherry-pick legal arguments that is preferred by the bank’s legal team. The new AFCA is expected to be more of the same disappointments and disagreeable determinations and headed by the same suspects. We have not been enamoured of FOS complaint handling services and have campaigned for some time to have the FOS system demolished.

Shocking complaint handling outcomes, place customers with legitimate serious complaints in a highly disadvantaged position. My concern is that several cases we have sent to the Commonwealth Bank, via the CEO in the past few months, the standard of cut and paste answering is poor.

I specifically ask that the Board consider the standard of complaint handling and the acknowledgement, by experience of the end users, to be of a very poor standard. To further understand that unpalatable matters fester on for months and even years. In fact, as our members have experienced, the lowering of standards in lending have serious consequences for the banking sector, its competitors and its customers. We have not been enamoured of the EDR complaint handling services and have campaigned for some time to have the EDR system demolished. Hence, we have turned back to the IDR system with some success with at least two major banks which demonstrates fairness is possible.

It appears none of the handlers of these complaints have tertiary level skills. The ill-conceived complaint handling system is fraught with stress and the files littered with terribly short letters of assessments. Any reasonable thinking manager could not approve of such practice.

The anger and frustration with all CBA customers are now building, and I have proven by reactions to those circumstances, the public, and shareholders will not be overly impressed if these activities start to affect the nation’s economy. In the meantime, mistrust and lack of confidence in the industry continue to roll in the front door. Such extreme outcomes are avoidable via sensible conversations with consumers.

Our members have had a dreadful time trying to deal with the various complaint handling sections of the Commonwealth Bank of Australia.

By way of “cut and paste” response as an example, I received this from one complainant today. His case has never been to court and was badly handled by FOS.

Denise, just how absurd and ludicrous for “A” on 24th Nov to state “you can contact the CBA Customer Advocate for independent review “….and when we do on 22nd Dec the response from “C” at the CAS on 28 Dec is “we don’t review cases that have been to FOS or the Australian Courts.” both responses in the full knowledge that we have been to FOS and CBA are well aware thru your 8-page letter, of all the deceit and fraud, but CBA then use their own rules to deny 000’s of customers any access to justice.

CBA is out of step with complaint handling when compared with other Major Banks. Some victims of loan fraud have unaffordable loans with two banks, so they are able to compare “services.”

For the moment and, to alleviate the pain and frustrations for customers when having to deal with CBA, I am trying to avoid taking cases back to the media. The cases I deal with are where, time and again, CBA has breached the Australian Banking Code of Conduct and caused severe hardship relating to loans that ought to have been rejected on day one.

Each time I have asked for a senior executive officer with experienced legal knowledge of the main issues to have a conversation with me. Instead, the customers have been sent to the “basement” version of complaint handling which throws the customers into a form of “Doom Loop” system. Staff, are taught to use robotic answers to bury the consumer in platitudes producing a string of frustrations. The CAS was supposed to address these problems, but they also have a list of five main excuses why they cannot re-open the file. The long-suffering CBA Customer cases are then marked closed. The captives are then sent to the “lion’s den” – ie the sub-contracted law firms, with orders to seize the home. Nothing is settled, and the Doom Loop cycle has been completed in favour of the bank.

This type of approach solves very little, except for CBA to steal the home, via “asset-stripping.” Home-loss via fraud, causes immense stress and anger for not only those affected but also their extended families causing a ripple-down effect of feeling financially abused by CBA.

Closing the file does not rid the bank of responsibility nor does it achieve ridding the bank of the customer. We all have to deal with this boomerang system and its consequences.

I have been called upon by Senators to give evidence as a key witness to various related Banking Inquiries. As a criminologist, and specialist in white collar crime, I have long term education and history of using my skills for the benefit of community.

The complaints we make relate to the handling system and outcomes. Our aim is to bring these significant issues to the attention of the Board with a request once again that an educated officer be appointed to converse with me and be given a realistic rein to appropriately deal with past and present cases.

Yours sincerely,

Ms Denise L Brailey

President of BFCSA (Inc) BaPSc, BLS, BaCrim, Adv Dip Accting.

Banking and Finance Consumers Support Association (Inc)

[email protected]

Mob: 0401 642 344

Published on 6 Sep 2018

Australia’s leading expert in mortgage fraud BY BANKS, Denise Brailey of the Banking and Finance Consumers Support Association (BFCSA), gave the following presentation to the CEC’s 30 June seminar in Perth. Denise exposes the mechanics of the massive mortgage fraud perpetrated by Australia’s banks, with the complicity of the regulator APRA, to pump up one of the biggest housing and debt bubbles in the world. This is the same fraud that fuelled the US sub-prime bubble which triggered the global financial crisis 10 years ago this month, and will likewise crash Australia’s banks and economy when the bubble bursts here. Denise digs deep into the scandal that the royal commission was only able to briefly touch on, due to its restricted terms of reference and time.