AppId is over the quota
How confidential is the relationship between a bank and its customer?
We recently acted for a young family to purchase their first home in Sydney NSW who were borrowing from their bank to finance their purchase.
Though their loan application was for less than 80% of the purchase price (exceeding $1,000,000), our clients' lender (one of the big 4 banks in Australia) decided to conduct a valuation.
We commenced our negotiations with the selling agent and after few days, it appeared our offer was being favourably considered.
Within 24 hours of the valuation being completed and the unconditional approval getting issued by the bank to our clients, we were advised by the selling agent that our current offer was not acceptable anymore. When we asked "why", we were told the selling price was now $,$$$,$$$ - exactly the amount of loan our clients applied for.
Too much of a coincidence, you might ask? Well we thought so too.
When we enquired from the selling agent "why" this was now their asking price, the answer was "your bank's valuer told us this is what your clients have applied for"!
Our clients had to decide whether to pay "more" than the fair market price resulting in additional stamp duty and interest if they were to proceed with the purchase, or instruct us to re-start the whole project.
We believe, we understand and we think a relationship between a bank/lawyer/Accountant/Doctor or for that matter any service provider or seller of goods and their customer/client is "personal" and "private" and "confidential". We feel strongly about this case and conclude the bank and its employees/contractors broke the rules (may be their fiduciary obligations) by disclosing this confidential information to the real estate selling agent consequently weakening our negotiating position on behalf of our clients.
We contacted various government departments (State and Federal) and were advised this matter could be addressed at both levels of Government:
NSW Fair Trading
Clause 19 - item c AND Clause 38 - item 1 in its entirety http://www.legislation.nsw.gov.au/fullhtml/inforce/act+4+2003+FIRST+0+N#pt.3-sec.19
and/or
Office of the Australian Information Commissioner
http://www.oaic.gov.au/privacy-portal/complaints_privacy.html
but only if the bank did not respond to a written complaint inclusive of restitution, within 30 days.
Most unprofessional. The bank's mortgage broker admitted in writing their valuer told the real estate selling agent about our clients' loan amount AND that he will be escalating this internally so that it doesn't happen again.
OH! What a relief for our clients!
Fred Haggar is founder of Property Search 4U, a Sydney based real estate buyers agency that has been recognised with the Australian Achiever "2011 NSW Winner" Award - real estate category, after earning the "Highly recommended" distinction in 2010, 2009, 2008 and 2007 in the same category. It is an active member of the Real Estate Buyers Agents Association of Australia, Real Estate Institute of NSW, The International Real Estate Federation and Business Enterprise Centre.
You may contact us at http://www.propertysearch4u.com.au/
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