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BarryBevan

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So Ken Henry and his mate are gone. Wasn't he the tax review guy, should we be looking into what he did there. 

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1 hour ago, BarryBevan said:

So Ken Henry and his mate are gone. Wasn't he the tax review guy, should we be looking into what he did there. 

Yeah we should be looking at implementing most of it...

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In the audio from the hearing he came across as an arrogant smug f*cker. 

Obviously now in hindsight he can see the error of his ways,,,,, as they all do.  :rolleyes1:

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I can’t believe none of them will go to jail for fraud. 

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I beat the banks....by having bank shares.  The buggers could be hit by an A-bomb and their shares go up, dividends are still ok.  CBA shares have been brilliant.

Too many Aussies are financial babes in the woods, so get screwed over by the banks.  You owe it to yourself to become more educated about basic financial issues so they don't bend you over.  Like medicos, they are not Gods, so play hardball with the fookers.  If they don't give you a good deal, walk away. And always check your accounts/charges/interest payments etc. to make sure they are correct.  If not, raise Hell.

Back in the 90's, I discovered Westpacs formula for calculating the penalty for breaking a fixed interest rate loan early was wrong.  I emailed them and they agreed !!!!  Wish I'd kept that email for the Royal Commission.

 

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1 hour ago, Peter said:

I can’t believe none of them will go to jail for fraud. 

The big end of town are always protected...unless you are a complete numpty. These guys will walk away with a nice golden handshake (baring in mind the board, the CEO and chairman are all complicit), go on a nice holiday for 6 months and then walk into another multi million dollar year job rinse repeat....

 

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34 minutes ago, Merv said:

any news on how the report affects financial planners ?

I heard an interview yesterday with a mortgage broker saying the new guidelines, if enacted, will force them out of the industry.

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I got this to my inbox today  

Hi Peter

As you may be aware Monday was a very important day for our business with the release of the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. While the report was initiated to bring to light the issues of misconduct by the major banks, it has instead resulted in an attack on the mortgage broking industry and has jeopardised the future of thousands of small business owners.
 
The Royal Commission reported that of the cases investigated and found to be negligent just 0.5% of these were introduced by mortgage brokers. 99.5% of negligent cases were direct bank loans yet mortgage brokers have somehow been thrown under the bus. 
 
Some of the recommendations from the Royal Commission include: 

  • Clients are to pay mortgage broker’s direct for their services
  • Brokers are to act in the client’s best interest 

Rather than a bank paying a broker to introduce a client and service them for the life of the loan the commissioner has suggested you should pay for our services. This would be ok if banks reduced your interest rates based on the money they were saving by not paying brokers, however, this will not be the case, these savings will simply increase the bank’s profits. Since the Royal Commission report was released Monday, banks have added $19 billion to their value, and this was an investigation into their misconduct? Something doesn’t add up.
 
The report is also calling for brokers to act in our client’s best interest. This is something our business has always prided itself on and will continue to deliver. Our business relies on our clients having a fantastic experience and achieving a great outcome. This is what keeps you coming back and referring your family and friends. As of today mortgage brokers account for just under 60% of the home loan market, it is clear we are not the only business providing great outcomes for our clients.
 
So what could all of this mean for you as our client?

By asking customers to pay the brokers direct the commissioner will reduce the availability of our services to everyday Australians that cannot afford to pay fees. Customers will then be forced to use major banks with a reduced level of service.
 
Under the current structure, whether you go to a bank directly or via your mortgage broker, the interest rate and fees are the same, borrowers do not pay anything extra under the existing model. In fact, in many cases, brokers are able to negotiate an even lower rate for you as we have access to a large variety of lenders. If these changes are implemented we will see a significant reduction in broker numbers. With fewer brokers, there will be less competition resulting in the banks increasing interest rates and therefore increasing mortgage repayments for everyday Australians.

As we sit here today these changes have not been implemented and are recommendations only. We feel it is important to share these findings with you now to give you the opportunity to help us fight against them. I would like to stress that as our existing clients you do not need to pay for our services.
 
Lastly, I would like to ask for your support to help us educate the politicians on the vital role we play in keeping the home loan market competitive whilst delivering a fantastic customer experience that the banks cannot compete with. This petition gives you the ability to demonstrate your support for your Inovayt mortgage broker.

If you have any questions at all about the Royal Commission recommendations, please don’t hesitate to contact me or your Inovayt broker.

Nick Reilly, Managing Director

 

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45 minutes ago, Ex-Hasbeen said:

I heard an interview yesterday with a mortgage broker saying the new guidelines, if enacted, will force them out of the industry.

Force brokers out or the planners ?

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I'm not following (due to being 12,000 miles away).  I engaged a broker, I paid him a fee for services directly and he had to declare his total commission that he was due from arranging my loan.  I paid a slightly larger fee than normal because I borrowed relatively very little.

Is that what they are talking about?

Edited by FatPom

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Yeah at the moment here you don’t pay the broker, they get a kickback from the bank for sending them your business. 

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8 hours ago, ComfortablyNumb said:

You owe it to yourself to become more educated about basic financial issues so they don't bend you over. 

 

The whole report was a waste of time, this is what needed to be the bottom line.  Bankers always learn how to play the rules to win, always have, always will.  Everyone of my bank shares went up 10% since the report was handed down, so the people with the money know the outcome.

Instead of bringing in another layer of oversight, there should have been a better government commitment to the community based financial planners who help those in trouble for free.  Increase the program to have someone trained in the language and business available for those without financial awareness to take into the meeting with the bank manager if they wanted to.  Hold the current ASIC crew to account for prosecuting properly with proper penalties and it won't take long to change the culture in the banks.

And don't just worry about Ken Henry, ask why the hell Anna Bligh took on a post to defend the banks.  Working class hero my ass 😋

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8 minutes ago, Cottoneyes said:

Everyone of my bank shares went up 10% since the report was handed down, so the people with the money know the outcome.

 

Damn right, I was LMAO, the inquiry wrapped up and our CBA shares went up.  I feel dirty 😁

BTW our youngest switched from CBA a/c to ING because it was a much better deal interest wise - and the CBA teller who closed her a/c agreed 😆

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I read a news story the other day that the banks sent a letter to ScoMo (when he was treasurer or whatever) detailing what a royal Commission into the banks should cover and how it should be conducted and by who etc, and the following day MT announced the RC!

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30 minutes ago, goughy said:

I read a news story the other day that the banks sent a letter to ScoMo (when he was treasurer or whatever) detailing what a royal Commission into the banks should cover and how it should be conducted and by who etc, and the following day MT announced the RC!

We are just as corrupt as the Chinese, just more discreet. How many politicians end up in plum 'advisory' roles for the organisations they help clear the path for.

Heck look at Alan Fels, chaired the commission looking into the taxi industry that recommend allowing Uber in....And then magically a year or two later has a job with Uber....there are many many many examples like this 

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12 hours ago, ComfortablyNumb said:

You owe it to yourself to become more educated about basic financial issues so they don't bend you over. 

I walked into the bank a couple months ago and said I wanted a better mortgage rate. I'd done a heap of investigation on what I could get elsewhere & what this bank offered new customers. I was hoping to save up to $200/mth in interest. I asked the question, and before I even got to present any of my investigations, I was $400/mth better off, and he'd organised a $1,000 refund on past interest as a bonus.

I'm kicking myself I hadn't done this a couple years ago.

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I mean should he be trusted  given his conduct. Also is anyone doing anything about senior figures in charge of public policy settings then moving to industry where they could benefit from those settings

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16 hours ago, Ex-Hasbeen said:

I walked into the bank a couple months ago and said I wanted a better mortgage rate. I'd done a heap of investigation on what I could get elsewhere & what this bank offered new customers. I was hoping to save up to $200/mth in interest. I asked the question, and before I even got to present any of my investigations, I was $400/mth better off, and he'd organised a $1,000 refund on past interest as a bonus.

I'm kicking myself I hadn't done this a couple years ago.

Yep and they bargain on us being too time crunched or lazy/complacent to check annually on stuff like insurance, finance, utilities, they expect you to just auto-renew and direct debit. Bundling makes it even harder to get out of a relationship with a bank thats bending you over. Made a point of checking all my car insurances every year, plus just about to ditch both major banks I deal with for online or smaller banks who can offer fee free, better interest etc. Utilities are worse, telstra will leave you paying massive overs after contracts run out then whinge when you ask for the same deal offered to new customers. Utilities don;t use a customer service model so you need to be on the front foot and spend the time on this stuff.

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On ‎8‎/‎02‎/‎2019 at 9:36 AM, Peter said:

I can’t believe none of them will go to jail for fraud. 

they were only hit with a feather duster.

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11 minutes ago, Parkside said:

Yep and they bargain on us being too time crunched or lazy/complacent to check annually on stuff like insurance, finance, utilities, they expect you to just auto-renew and direct debit. Bundling makes it even harder to get out of a relationship with a bank thats bending you over. Made a point of checking all my car insurances every year, plus just about to ditch both major banks I deal with for online or smaller banks who can offer fee free, better interest etc. Utilities are worse, telstra will leave you paying massive overs after contracts run out then whinge when you ask for the same deal offered to new customers. Utilities don;t use a customer service model so you need to be on the front foot and spend the time on this stuff.

You are probably just as better off staying with the big banks but also buying there shares. Hence you benefit from there rewards.

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On 08/02/2019 at 8:31 AM, roxii said:

In the audio from the hearing he came across as an arrogant smug f*cker. 

Obviously now in hindsight he can see the error of his ways,,,,, as they all do.  :rolleyes1:

He has lots of flaws and failings as a person, and his performance at the RC was a total ****-up deserving of being booted from the board just for that, let alone being so shareholder-centric he was willing to turn a blind-eye to the corrosive NAB culture. 

But he was essentially on target with most of his work in the public sector, and it's a pity that too much of it was ignored by politicians unwilling to make the hard choices. 

There's a good article on him in today's SMH: The rise and fall of Ken Henry: how 'the smartest guy in the room' came undone

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44 minutes ago, Parkside said:

Agree re the shares. It’s only a rort if you’re not in on it

One of the central issues is that the framework under which banks (and companies in general) operate is one where the primary responsibility of any corporate entity is to its shareholders, not to its customers. It's largely assumed that 'market forces' (and various consumer protection authorities) will sort out the problem of products and services and how that impacts on a business's ongoing performance.

As a general concept, this might work well enough in a competitive marketplace, but in the case of the 4-pillars, they have such an effective oligopoly and such machiavellian control of legislators and authorities, that they are able to perversely provide benefit to shareholders by screwing over their customers, and the worse they behave the more their shareholders are rewarded for it. That shareholders come first and customers a distant second, is summarised in the now famous "To whom should boards be accountable?" comment Ken Henry made in that train-wreck of an RC performance he made.

Many years back now, when it became so bleeding obvious that the re-regulated banks were not only abusing customers but also putting the economy at risk with their activities, that the govt of the day could no longer ignore it, they threatened to impose detailed legislation. However, the finance industry lobbied against it and managed to convince everyone they could be trusted to implement self-regulation with only a legislated framework for that being required. Along the way, they introduced voluntary 'Code of Practice' approaches to regulating behaviour and external dispute resolution schemes (that are operated and financed by the industry) both of which proved to be largely no more than lip-service.

While there are certainly many areas of operational compliance and regulation that banks must meet, including AFSL requirements, too much of this is self-regulated with only ASIC oversight of the framework, which is defined in broad terms that are ambiguous and subjective, so the banks argue they are acting in the interests of shareholders by behaving badly and pushing legal boundaries.

ASIC is in an awkward position, in that the banks are complying with a key legal requirement of acting in the interests of their shareholders by providing returns, and consumer protection is not really their area of concern. ACCC is responsible for consumer protection but legally limited in what they can address when it comes to financial products & services, as that is largely self-regulated by the industry with ASIC oversight. A brilliantly evil solution that the banks managed to sell to self-obsessed politicians, more concerned with appearance than details, and who are complicit in creation of the existing problem.

Defining what is being a good corporate citizen, tends to be a bit like nailing jelly to a wall, so the banks throw a bit of cash about on a rescue helicopter or two, and set up a few foundations and community projects to improve their PR image, and then outspend any attempt to mount legal challenges to their abusive operations.

However, if you think the banks are bad, the section of the finance industry that must be thanking their lucky stars they got off so lightly, are the payday-loan, debt-restructuring and debt-collecting industries - much of which is either directly or indirectly financed by the Big-4. If you thought the banks were unethical, you've not seen anything.

When I worked in the area of debtor representation, I recall a client who was dying of brain cancer, being harassed on her mobile in hospital by a debt-collector trying to use emotional blackmail to settle her debts before she died and not make it a problem for her family to deal with. Of course this was all BS and bluff, but aggressively trying to take advantage of someone in their final weeks of life is typical of the attitudes these people have, where commission/profit rates above everything, including basic human respect.

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17 hours ago, XCOM.! said:

One of the central issues is that the framework under which banks (and companies in general) operate is one where the primary responsibility of any corporate entity is to its shareholders, not to its customers.....

Exactly right XCOM.

If you want to win, buy bank shares (which you'd all have anyway if you have Super....unless you have a self-managed super fund with no Aussie bank shares...and then you're stuffed 😉).

Have your own household cash-flow budget so you don't borrow more than you can service.  And hit the buggers up for a better interest rate on your savings, or switch to an online bank like ING.

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Just so I understand, we all agree it's disgraceful for the banks to screw people over like they do, but it's perfectly acceptable for us to invest in such banks so we can also profit from their exploitation and predatory behaviour?

 

 

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Im not even sure i agree banks are all that bad. Sure they piss me off with the way they pass on rate increases the second they go up but gouge any rate reductions etc

But I have little to no sympathy for anyone that borrows to much, spends to much on their credit card or doesn't shop for the best rates etc that's just them being greedy, lazy and or stupid.

 

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21 minutes ago, more said:

Im not even sure i agree banks are all that bad. Sure they piss me off with the way they pass on rate increases the second they go up but gouge any rate reductions etc

But I have little to no sympathy for anyone that borrows to much, spends to much on their credit card or doesn't shop for the best rates etc that's just them being greedy, lazy and or stupid.

 

Agree.

Now to Rog's point. The banks are definitely not as scrupulous as the Royal Commission made out. The Investment Adviser arm is a different story though.

Re: the Banks.... I work for one of the big 4 (Which Bank)?......anyway. I started when they were revamping there banking system and had to migrate millions of account to new platforms. There are so many different types of account out there its not funny... Anyway.... I have seem many many many times where thousand of customers have been charge fees that they shouldn't have been charged etc and no one had reported it for 2 years.... Suddenly 1 client rang and complained. After investigating that the issue was caused during one of the migrations they then went about remediating every single impacted account and refunded the fees over the 2 year period and setting up notifications and explaining why they were crediting accounts etc..... and some of the fees were really small but due diligence was done. I Have also seen then no charge when they should have and because of the length of time... they drew a line in the sand and only charge the clients going forward from when the fix was put in place.

Banks do not intentionally rip people off.... They make mistakes and when know fix them. But like 'more' said some borrow too much. There was an example last week where some father who ran the family business died and he was the only one who knew everything.... so they were stuffed, but then it came out that he had 5 business loans that he kept getting to cover debt..... how is that the banks fault.

 

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From the 2017 profit announcement:

The strength of our financial performance also means we can continue to provide stable dividends to our shareholders. $3 out of $4 of our profits go back to everyday Australian shareholders, this includes millions of Australians through their shares and superannuation. This is particularly important as nearly 80% of our shareholders are based in Australia. The rest of our profits go back to investment for the future.

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4 hours ago, Rog said:

Just so I understand, we all agree it's disgraceful for the banks to screw people over like they do, but it's perfectly acceptable for us to invest in such banks so we can also profit from their exploitation and predatory behaviour?

 

 

They only screw over financially illiterate people....just like car dealers screw over people who don't do their homework.....or medicos who tell you half-baked lazy shit if you don't inform yourself.

What More & IFoz say is right.

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Got a message from a independant planner today, quickly distancing themself from any financial institution what so ever. Their licencee is Capstone.  

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3 hours ago, IronmanFoz said:

. Anyway.... I have seem many many many times where thousand of customers have been charge fees that they shouldn't have been charged etc and no one had reported it for 2 years.... Suddenly 1 client rang and complained. After i

 

So you have seen "many many" instances of this but did and said nothing and the only reason it was remediated was because a customer " raised the alarm"? 

How is that a good story about how CBA, oops I mean banks are not doing the wrong things...?

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1 hour ago, BarryBevan said:

so the dead people

Managers of the estates &/or beneficiaries were lazy and/or useless, and did not keep an eye on the accounts, and did not notice that the banks were charging fees to a dead person.

Like I said - keep an eye on your financials or some prick will bend you over, esp big faceless corporations like banks.

Just like electricity retailers will quietly slide you off your discount plans unless you notice, and call them up and tell them to reinstate it or f-off, or insurance companies will increase you premium 20% automatically, even though the value of your car has dropped 20%, unless you call them up & tell them to drop it or f-off.

Bottom line - stay switched on, stay sharp, or all these pricks will screw you.

 

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I love lots of generalisations. I wish I could do the same thing. Some of the above is true, some not, some is just crap. For those that have super, you are all invested in the banks. 

FM

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58 minutes ago, BarryBevan said:

did the royal commission make findings about financially illiterates? 

Yeah mate.  I think they said if you are financially illiterate, you'll just have to wait 10+ yrs until someone calls a Royal Commission to get justice.

TBH, I've known some people who I would not call entirely financially illiterate who got screwed.

One, they put in a budget for a loan to buy a farm to Westpac, the loans officer changed their budget to make it more favourable so head office would accept it.  Loan approved, they ran into trouble (which is not surprising given the shit country they bought and their past track record in business). It went to the High Court and the bank was found in error (this was in the 90s).

Recently, a family building business.  They asked NAB to pay some suppliers, the local f-wit banker instead of pressing the 'pay once' button hit the 'pay daily' button, sent them screaming into the red.  The banks solution - to charge them a fee for being overdrawn & making them set up an overdraft which incurred setup fees.  I'd have gone straight to the ombudsman & then media if they didn't refund everything.

 

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18 hours ago, IronmanFoz said:

Agree.

Now to Rog's point. The banks are definitely not as scrupulous as the Royal Commission made out.

That's a bit of a worry then, because the RC indicated they were pretty damned UN-scrupulous... LOL.

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14 hours ago, pieman said:

So you have seen "many many" instances of this but did and said nothing and the only reason it was remediated was because a customer " raised the alarm"? 

How is that a good story about how CBA, oops I mean banks are not doing the wrong things...?

No. You have taken your own editorial licence here. What I have seen many times is that a customer has made a complaint. The complaint has been verified and then the bank performs a full remediation so that all impacted customers got refunded. From my perspective I only see it when it comes to my team and we push and manage the teams who fix it to fix it ASAP.

Sure the bank could have sat on there hands but they didn't. And they should be applauded. The effort and the resources they go to, to do the right thing is quite extraordinary.

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And I agree... lots of things mentioned in the royal commission were pretty bad. But a lot of things that occur are technology related issues that should never have occurred, but mistakes happen.

Now...the financial planning side of things and the selling of insurance etc by banks is another thing. All very bad and that where they do become unscrupulous and that has been proven across the whole industry.

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I think that your view of the banks (and finance industry in general) will be coloured by your experience. e.g. If you work in the banking sector, the operational area you work in and the cases you deal with, will influence your view.

In my case, I worked in the area of debtor advocacy and representation, assisting people who had found themselves on the wrong end of it, so I tended to see more of the systemic failures and bad behaviour by FSPs - some of which was breath-takingly bad - and I mean seriously, jail-time bad. Clearly I have a jaundiced view of the banks and the entire financial system, but that's probably not surprising given what I've seen.

However, I should also hasten to add that not all of it was 'bad-bank' behaviour, and there were definitely cases where FSPs acted as good corporate citizens, or acted in good faith, only to be taken advantage of (along with ourselves) by our client. We definitely had our share of clients who deserved what they got, but they were very much a minority of cases.

One of the biggest issues we struggled with was that bank employees follow bank policy to the letter (which of course is exactly what you'd expect) but when it was brought to their attention that the policy is either illegal or contravenes their own code of conduct, there was no room for discussion - similar to that 'computer says no' comedy script. 

This is not so much bad-behaviour per-se, but a systemic failure in the implementation of policy that actually met the obligations of the FSPs, both internally and legally. Because of this inflexibility, they were willing to destroy people's lives rather than address the need to acknowledge that their policy might be wrong. Policy is driven from the top, and much as the highlighted cases of poor policy that allowed bad behaviour to exist, this inability to deal with bad policy is a systemic failure that needs to be addressed.

The EDRS rarely provided a means of remedy for this, as their limited scope of reference means that it won't adjudicate on anything involving a legal argument or accepting evidence such as a stat-dec, and few people in financial trouble are in a position to afford a legal challenge, or if they start it, the banks just out-spend them rather than deal with the elephant in the room - i.e. that they are wrong.

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And just now to reinforce my view that you've got to be on top of stuff and stand your ground, just back from the SWR Triathlon & Elders Real Estate (via Booking.com) tried to saddle us with an extra fee for a stain on the couch in the place we rented which we did not do (and it looks like v old stain).  My guess - the owners do the cleaning & are looking to lump some sucker with the couch cleaning fee.

SWR Triathlon has shrunk a bit by the looks, but it is far more relaxing & fun than Noosa.  Had a bit of kangaroo trouble in the bike transition, big male roo stuck in there at one stage.  New bike course which all say is harder.

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On 11/02/2019 at 7:42 AM, ComfortablyNumb said:

Yeah mate.  I think they said if you are financially illiterate, you'll just have to wait 10+ yrs until someone calls a Royal Commission to get justice.

TBH, I've known some people who I would not call entirely financially illiterate who got screwed.

One, they put in a budget for a loan to buy a farm to Westpac, the loans officer changed their budget to make it more favourable so head office would accept it.  Loan approved, they ran into trouble (which is not surprising given the shit country they bought and their past track record in business). It went to the High Court and the bank was found in error (this was in the 90s).

 

Wouldn't be calling those examples financially literate, part of it is knowing what you can afford and having a safety gap.  I got offered a million dollar loan when 23 to buy a farm with my parents, I did the sums and I needed the first 10 seasons to be exceptionally good for it to work out, the bank was still keen for me to go ahead.  I said no, broke my parents hearts and then watched the next 7 years of drought unfold.

Again when buying my first house here in Melbourne, went to a broker and we got approval for a loan that neither of our single wages at the time would cover (repayments were around 60% of our combined income net).  Again we said no and borrowed under half of it with the bank saying were we sure.

The banks are responsible in both cases, but so was I if I was stupid enough to proceed

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25 minutes ago, Cottoneyes said:

Wouldn't be calling those examples financially literate, part of it is knowing what you can afford and having a safety gap.  I got offered a million dollar loan when 23 to buy a farm with my parents, I did the sums and I needed the first 10 seasons to be exceptionally good for it to work out, the bank was still keen for me to go ahead.  I said no, broke my parents hearts and then watched the next 7 years of drought unfold.

Again when buying my first house here in Melbourne, went to a broker and we got approval for a loan that neither of our single wages at the time would cover (repayments were around 60% of our combined income net).  Again we said no and borrowed under half of it with the bank saying were we sure.

The banks are responsible in both cases, but so was I if I was stupid enough to proceed

Yeah, fully agree CE.  That's how we've rolled too.  Always built a safety margin into our borrowings (e.g. interest rates hitting 12% back in the day). The banks will happily take mug punters to the edge of disaster....if you rely on what they say you can borrow & borrow their max, prepare for a stressed life.

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On ‎11‎/‎02‎/‎2019 at 11:43 AM, XCOM.! said:

I think that your view of the banks (and finance industry in general) will be coloured by your experience. e.g. If you work in the banking sector, the operational area you work in and the cases you deal with, will influence your view.

Absolutely 100% correct. And this is why we all have opinions whether they be right or wrong.

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4 hours ago, ComfortablyNumb said:

Yeah, fully agree CE.  That's how we've rolled too.  Always built a safety margin into our borrowings (e.g. interest rates hitting 12% back in the day). The banks will happily take mug punters to the edge of disaster....if you rely on what they say you can borrow & borrow their max, prepare for a stressed life.

There's a couple of issue there to be considered.

1.    Not everyone is equipped with the ability to understand what they are getting themselves into, and this is a problem Banks are required to mitigate via "Responsible Lending" but has apparently taken the RC for them to acknowledge this.

2.    Even with the best laid plans, bad shit happens to good people, and there needs to be a better way to deal with the fall-out than simply piling on the misery. Accident, illness, death, to mention just a few, can drastically change a person's ability to meet obligations that should not have been a problem for them.
 

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3 minutes ago, XCOM.! said:

There's a couple of issue there to be considered.

1.    Not everyone is equipped with the ability to understand what they are getting themselves into, and this is a problem Banks are required to mitigate via "Responsible Lending" but has apparently taken the RC for them to acknowledge this.

2.    Even with the best laid plans, bad shit happens to good people, and there needs to be a better way to deal with the fall-out than simply piling on the misery. Accident, illness, death, to mention just a few, can drastically change a person's ability to meet obligations that should not have been a problem for them.
 

Yes and No.

1. When I first borrowed and was told what we could borrow, my wife and I looked at each other and said how the hell would we be able to pay that off. Hence, we did not borrow what we were told we could.

2. and that why we always paid double what the bank required us to pay. Helps in the long run. I was made redundant 8 years ago and our extra payments (+ other payments ie: tax returns etc) allowed us to be 17+ years ahead on our mortgage so the time off I had was not a big deal. Some people chose to pay the minimum or god forbid... interest only.

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Just now, IronmanFoz said:

Yes and No.

1. When I first borrowed and was told what we could borrow, my wife and I looked at each other and said how the hell would we be able to pay that off. Hence, we did not borrow what we were told we could.

2. and that why we always paid double what the bank required us to pay. Helps in the long run. I was made redundant 8 years ago and our extra payments (+ other payments ie: tax returns etc) allowed us to be 17+ years ahead on our mortgage so the time off I had was not a big deal. Some people chose to pay the minimum or god forbid... interest only.

Sure, and you clearly have the ability to make sound choices. But trust me, I have dealt with people who had no idea what any of it meant, what they'd gotten themselves into, of even what they owed... and they continued to be given more and more credit even as they were defaulting on debts. In some cases, the inability to understand simple arithmetic should have been a red-flag, but wasn't.

But even for those who do have the ability to understand and plan, there are too many situations that are difficult to predict the impact of, even for the most careful.

I've seen parents who simply fell apart watching their child die of cancer, and lose everything (including the will to live) as a result.

I can't imagine many would be considering 'what will happen if my child dies' as something they need to provision for in their financial plan.
 

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2 hours ago, XCOM.! said:

There's a couple of issue there to be considered.

1.    Not everyone is equipped with the ability to understand what they are getting themselves into, and this is a problem Banks are required to mitigate via "Responsible Lending" but has apparently taken the RC for them to acknowledge this.

2.    Even with the best laid plans, bad shit happens to good people, and there needs to be a better way to deal with the fall-out than simply piling on the misery. Accident, illness, death, to mention just a few, can drastically change a person's ability to meet obligations that should not have been a problem for them.
 

Yes I agree, shit happens (why I also took out income protection insurance once I became self-employed to cover some of that shit).

But I think your No.1 is a bigger problem for a lot of people....and the desire to keep up with the Jones's.  Cars are a biggie I notice, e.g. the hairdresser earning three fifths of FA who buys a new Audi when a Camry would be fine. 

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