Banks' deceptive conduct (letter)

by John Salmon

News Weekly, May 4, 2002

Sir,

As a former banker and one who has been investigating malpractice in the banking industry for the past 14 years, I would like to congratulate Professor Jones on his article, "The banks' power over small business" (NW, April 6).

In the Freeman case, the existing bank manager was replaced by a hardline enforcer who had a hidden agenda. This agenda enabled the bank to implement many of their dirty tricks to rid themselves of a business which has its destiny in bankruptcy. In this process, we have the bank deflating its property values to achieve the desired aim which Professor Jones has highlighted.

I would also like to bring to your attention that this same bank will apply the reverse mode, so that it can gain new business. In one particular case that I had cause to investigate in the litigation process, the NAB's discovered documents revealed that the bank manager had increased the market value of its proposed security during a six month period by as much as 173 per cent, from $210,000 to $575,000. In the interim, the property was subject to a contract of sale at $310,000.

The transaction enabled the bank manager to rid his employer of a troublesome liability where he had a friendly relationship with the vendor.

Banks conduct their business with certain system procedures which are often manipulated at will, and their deceitful aims and actions go undetected. Banks have won the day because our Federal politicians refuse to take positive action.

John Salmon,
Mansfield, Qld