Refugee gets unaffordable loan
March 31, 2008, smh
ONE of Australia's biggest banks has admitted giving unaffordable personal loans to Sudanese refugees, including some with no job, no English and no concept of finance.
The Commonwealth Bank told the ABC's Four Corners it had introduced a new affordability policy after an internal inquiry into the 18 loans to families in south-eastern Melbourne.
The bank gave Deng Gatluak a $20,000 car loan, even though he did not speak the language, was unemployed and had no idea of how such a loan worked.
His wife, Nyatut, who still speaks virtually no English and has no assets, was made the guarantor on the loan. The repayments left the family of nine with next to nothing to live on.
A lawyer with the Consumer Action Law Centre, Lauren Walker, said the loan put Mr Gatluak in a position of severe financial hardship. "He has a family of eight people on his application form, which he didn't actually complete, his living expenses were estimated to be $800 per month, which calculates down to $25 per week per person, which is roughly $3.60 per day," Ms Walker said.
In another case, she said, a girl of nine acted as an interpreter for a family and the bank. Under pressure from consumer advocates, the bank has now waived most of the outstanding debts.
A former NAB employee, Kim White, told Four Corners he was pressured to talk people into taking bigger loans than they wanted. "I up-sold someone to $80,000 on more than one occasion when they only came in for a $20,000 or $30,000 loan," Mr White said.
"The pressure was sell them, sell them, if the system will let them do it sell them as much as you can possibly sell them." The bank said it had "strict credit polices, processes and controls".