The finance sector’s self-administered dispute resolution body has threatened to throw out hundreds of complaints lodged against banks and financial institutions by consumers and small businesses represented by the debt management firm MCR Partners.
The Australian Financial Complaints Authority (AFCA) has warned more than 200 individuals and small businesses that they will have their cases closed if they retain MCR as their representative.
“AFCA has sought to ban MCR and close the files of its clients on the flimsiest of grounds, that vastly overreach the powers that are vested in it,” said Xenophon Davis partner Mark Davis.
“The only complaints leading to this ban upon MCR came from AFCA staff and not from its clients.”
“AFCA maintain that they are not a government authority of any description and therefore its decisions are beyond review. We are testing that proposition,” said Mr Davis, after commencing action on behalf of MCR in the Federal Court against AFCA’s ban.
AFCA has accused an MCR case manager of swearing and being uncooperative as he pursued complaints against the banks and other financial institutions. The MCR case manager, Gabi Gerges, admits he did swear out of frustration over the plight of some of his clients and has apologised for doing so.
Mr Gerges said: “The banks are pursuing vulnerable and utterly impoverished people, including pensioners, single parents and unemployed and almost all of them are victims of irresponsible lending. Or to put it another way, unlawful lending. That is what we focus on.”
“AFCA processes operate like a ‘discovery’ process to favour the banks in these valid disputes. They pose publicly as a kind of neutral ‘ombudsman’ for people in dispute with financial institutions. However, they are almost entirely funded by the banks and finance companies,” said Mr Gerges.
“AFCA is actively encouraging people and small businesses, many with complex financial complaints, to represent themselves against paid professionals representing banks who are deeply familiar with the financial resolution process.”
“It is ludicrous to think a supposed adjudicator can strip individuals of their right to seek representation when pitted against a bank which has already been pursuing them aggressively. We have been levelling the battlefield for victims of irresponsible lending and now they want to take us out,” said Mr Gerges.
Mr Davis said: “The arbitrary actions against MCR have not only damaged an honest business that fights for victims of irresponsible lending but has now left scores of those victims highly vulnerable and distressed. Such ‘rulings’ can and do ruin lives. It is not acceptable they be beyond all legal review.”
“Scores of MCR customers have advised Xenophon Davis that they wish for MCR to continue to represent them with their complaints lodged with AFCA.”
Of the more than 100 MCR clients who responded to an anonymous survey conducted by Xenophon Davis, all expressed their wish for MCR to continue to represent them and more than 80 per cent said they felt they had been intimidated by AFCA in recent weeks.
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