The National Australia Bank (NAB) has been caught out, in our view, in bald-faced lying to its small business customers. In so doing, it has trashed its own brand. Again, our view is that, for small business people, NAB has just declared that it can’t be trusted.
The issue arises from NAB’s issuing arguably false advice to its small business customers that it has amended its loan contracts to comply with the new unfair contract laws. We obtained a copy of the NAB advice and its new 100-page contract and forwarded them to Robert Gottliebsen of The Australian, initially thinking that this was a ‘good news’ story. But NO!!
When the NAB loan contract was checked, it was obvious that the contract breaches the new unfair contract laws in many ways. Robert Gottliebsen has written up the outcome today.
He says that by inserting the words ‘acting reasonably’ NAB asserts the power to:
(a) Reduce any loan limit.
(b) Introduce new fees or vary fees.
(c) Change the way it calculates default interest.
(d) Change customers’ repayment obligations.
These and other clauses effectively give NAB the power to change its own contracts enabling it to bankrupt any small business it chooses.
NAB has clearly breached the intent of Parliament when it passed the new unfair contract laws and we believe it has actually breached the laws. We will be lodging formal complaints with both ACCC and ASIC asking for NAB to be ‘jumped on from a great height’. If the NAB con trick of ‘acting reasonably’ proves to have neutered the unfair contract laws, we will push hard for amendments to the legislation.