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 michaelwest.com.au 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.
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”.