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We’re mighty proud of the work we did, over close to a decade, to achieve the 2015 unfair contract laws protecting small business people. Here’s the tracking of our campaign from 2009. And it’s pretty fair to say that, without us, the laws would not have come into existence.

In that long struggle the banks consistently opposed the unfair contract laws. During that campaign one bank, NAB, was found by the courts to have engaged in ‘misleading and deceptive conduct’ in relation to a business mortgage. In our view NAB’s bank officers arguably behaved as they did because NAB’s small business finance contracts seemingly gave them unfair power.

Continuing with this deceptive theme, in December 2016 NAB issued a letter to its small business customers claiming it had changed their small business contracts to comply with the new unfair contract laws. Here’s NAB’s letter. But when we had the contracts studied, it was found that the contracts were worse, not better! Talk about NAB destroying its own brand!

Our exposure of NAB’s misleading conduct along with important work by The Australian journalist Robert Gottliebsen resulted in a chain reaction. The bank regulator, ASIC, and the Federal Small Business Ombudsman conducted a wide-ranging investigation into whether the banks’ small business contracts complied with the unfair contract laws.

After some nine months of haggling, the big four banks have agreed to change their small business contracts, removing unfair contract terms in loan facilities up to $3 million. According to a report in The Age yesterday, some of the changes include:

• the banks will not be able to require customers to cover losses due to fraud by the bank; and
• the banks’ ability to vary contracts will be limited.

It’s staggering that these sorts of clauses were ever in contracts. We'd wager that banks would not agree if such clauses were imposed on them in a contract.

Also making common sense, small business customers will be able to exit a contract if the banks change a contract. Isn’t that what a ‘contract’ should allow? Robert Gottliebsen gives a fuller explanation today in The Australian.

The fact that the banks had to be dragged to agree to such changes is also staggering. Frankly, they would have faced legal action if they hadn’t agreed.

The banks like to portray themselves as ethical. But with this sort of behaviour it’s easy to understand why the banks’ reputations are in the gutter.

There’s a lot more work to be done on this issue. The ‘big end of town’ are avoiding fixing their unfair contracts. Our message to them is: ‘we’re watching’. And we’ll act and expose unfair contracts wherever we find them!