In day nine of hearings at the banking royal commission into SME lending, Suncorp’s executive general manager of lending, Steven Kluss, was forced to admit the bank had failed to remove contract terms that ASIC had identified as unfair from a range of business contracts.
The law was first unveiled in 2015, took effect with a monitoring period from 2016 before fully coming into force in November 2017.
Back in 2015, ASIC asked all banks to look at their business loan contracts and issued recommendations for the removal of certain clauses it considered to be unfair, or likely to result in claims of unfairness.
Yet more than two and a half years later, Mr Kluss admitted that has still not been completed by Suncorp.
While its credit contract has been updated, a range of business contracts — including loan documents — have retained the original clauses.
Mr Kluss admitted the process was taking “too long”, but suggested the relevant clauses were not actually unfair — because the bank has yet to finish its investigation of the terms and make a formal judgement about their fairness.
Counsel assisting the commission then spectacularly accused Suncorp of being comfortable with being non-compliant on the issue, which got the bank’s lawyer off his feet in lightning speed to object to the question.
It comes almost a week after Suncorp was found to have taken a determination by the Financial Ombudsman into its own hands, forcing a recent widow to prioritise repayment of a loan that had been deemed to have been irresponsibly issued to her late husband over other interest accruing loans.
See the full breakdown of these testimonies, and all of the royal commission’s hearings into SME lending, on the My Business live blog.
The ACCC has been diligently enforcing the unfair contract term (UTC) provisions, having taken legal action against waste management company JJ Richards and recently announcing an investigation into Uber Eats' contracts with restaurants.