On this, the first day of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the Australian Small Business and Family Enterprise Ombudsman says now is the time for small businesses that have suffered from questionable conduct by the banks to have their say.
“While we are pleased that banks have made changes to small business loan contracts, there is still more work to be done,” said Ombudsman Kate Carnell.
“The Commission needs to probe past dispute cases where small businesses were often forced to close and people lost their jobs, and provide them with an opportunity to tell their stories.
“Our inquiry in 2017 into small business loans found contract arrangements with banks put the borrower at a distinct disadvantage.
“We examined a number of cases where the loan contract gave banks a disproportionate level of power, to protect themselves from financial risk and to increase profit.
“In many cases, the small businesses found themselves in default, even though they have made each loan payment, on time, every time.”
Ms Carnell said the Royal Commission provides the opportunity to highlight the devastating consequences for small businesses when banks use their significant power unfairly.
“Small businesses that have suffered from questionable conduct by banks, significantly impacting their businesses, finances and their lives, deserve to be heard.”
Source: Australian Small Business and Family Enterprise Ombudsman