Blind Injustice


National Australia Bank has been charging an elderly blind farmer from rural Victoria 28 per cent interest rates on his mortgage.

The punitive charges were more than 25 per cent above the Reserve Bank cash rate for the past two years, and even beyond credit card charges, at a time when the region of Northern Victoria, where he grows peas, wheat and other grains, was affected by drought.

The farmer, who spoke to on condition of anonymity, is negotiating a settlement with the bank via advocacy service Unhappy Banking. The bank declined to comment on the matter except to say, “To respect the privacy of all parties we are unable to comment on the specifics. We will continue to work with the client on this matter.”

On the farmer’s bank statements – those pertaining to $1.8 million in loans at rates of 28.12 per cent and 27.37 per cent – there is no mention of “default” or “penalty” rates. He had previously been paying 15.87 on a default account for a loan facility of around $400,000. Subsequently, in 2014, the NAB rolled his loans into a “matured facility account” for $1.8 million, whose interest rates started at 28.12 per cent.

Farmer's NAB bank statement
Farmer’s NAB bank statement

As part of his dispute resolution, the farmer recently asked the bank for his loan documents and these were duly provided. However, he told us yesterday the interest rate figures on the statements had either been removed or omitted.

After complaining earlier this year about the usurious interest rates, the bank lowered the interest charges to 17.37 per cent.

Since 2014, the farmer has accrued more than $1 million in interest charges on his $1.8 million loan.

Editor’s Note: The day this story ran the NAB settled with the farmer, apologised and said the high interest rate was an “error”.

  • ilma2045

    Usurious is the only word for this. What on earth happened in 2014 that this man’s interest rate spiralled from 15.87 (bad enough) to 28.12%.
    Here’s a relevant quote from the 2012 High Court case re ANZ and its exorbitant “service” fees, citing Lord Dennning in Commentaries on Equity Jurisprudence (1839) Vol II, p 508:
    “It seems to me that such a case comes within the very first principles on which equity intervenes to grant relief. The whole system of equity jurisprudence proceeds upon the ground that a party, having a legal right, shall not be permitted to avail himself of it for the purpose of injustice, or fraud, or oppression, or harsh and vindictive injury.”

    • carey

      IMHO there is an overwhelming need for a Royal Commission. 8 years after the Storm Financial fiasco there has been no justice or prosecutions. The future of our standard of living is now inexoricably linked to a superannuation investment management system with integrity. If we dont prorect this integrity then the burden will fall on future taxpayers or lower retirement standards all the while our banks make super profits on corrupt and fraudulent behaviour that is continually blamed on a few bad apples / staff.

  • Unhappy Banking

    Dear Michael, I can confirm that the dispute between the Farmer and the NAB has been resolved.
    Geoff Shannon
    Unhappy Banking