The sheer scale of malpractice uncovered over the past week could lead to the banking royal commission being extended

This week, Jacqueline McDowall became the human face of the malpractice of Australia’s financial services industry, as she tearfully recounted the woeful advice she was given by Westpac that cost her her house, and most of her superannuation.

The nurse and her husband hoped to buy and run a bed and breakfast, so she could retire from her job. Advised by Westpac financial planner Krish Mahadevan to sell the family home and invest in a self-managed super fund, she was then told she could not borrow the money she needed.

“I said, ‘We sold our family home on your advice. We now don’t have a family home to live in’,” she told the commission through tears. “I was too embarrassed to tell anybody. I felt humiliated, stupid.”

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McDowall and her husband are still renting, and fear they will never be able to buy a home. She said she could probably have to keep working “until I’m 80”.

McDowall has followed other customers of Australia’s financial services industry into the royal commission – people such as David Harris, who repeatedly pleaded with Commonwealth Bank not to increase his credit limit because he was struggling to control his gambling addiction.

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Despite his plea, the offers of more and more credit came, until he was in debt to the tune of tens of thousands of dollars.

“I explained I’m a gambler, I have a gambling problem, they can clearly see that I’ve got a gambling problem because of the transactions I’ve been making, and I don’t understand why they keep offering me more money,” he said.

The litany goes on: NAB staff accepted envelopes stuffed with cash to wave through loans they knew were based on fake documents in order to “smash targets” and score bonuses. Commonwealth Bank employees charged clients who were dead for a decade, for services they never provided, not even when they were alive, conceding they were the “gold medallists” of “fee-for-no-service” banking. And AMP executives have admitted lying to the corporate regulator Asic in an attempt to cover up their behaviour of charging for no service.

Facebook Twitter Pinterest Some Guardian readers said insurance companies had refused to pay claims for property damage sustained in huge storms officially declared disasters by the government. Photograph: Tony Bartlett/EPA

But the impact and scale of the malpractice is far broader than the handful of examples brought before the commission so far.

Dozens of readers have contacted the Guardian – some anonymously – revealing that the predatory tactics by banks, the bad advice being knowingly given, and feckless lending practices, have ruined lives across the country, leading to bankruptcies, people losing their homes, family breakdowns, as well as debilitating physical and mental illnesses.

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As one correspondent wrote to the Guardian, the financial services industry has been “ruthless, careless, and irresponsible” with the money and lives of the Australians they are employed to assist.

Several readers said they had been given poor financial guidance by advisers, who profited from that advice that proved ruinous to their clients.

Bank clients said they had been pushed into products that lost them money, without being warned of the risks, and without being told that the advisers were receiving commissions for those products.

Some say this has been happening for decades.

In the late 1980s, one man approached a big four bank in Melbourne with enough money saved to buy a house outright. He was referred to an “expert financial consultant”.

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“She convinced me that buying a house was a really bad idea. She explained how unit trusts were much safer investments ... she did not mention at any time that she would receive a commission from those trusts,” he said.

The trusts collapsed in value, while Melbourne property prices soared.

“The financial consultant that I saw behaved more like a high-pressure salesperson. She seemed to be motivated more by the undisclosed commissions that she would receive than by any desire to protect my financial future.”

Several readers told the Guardian they were given ever-increasing credit limits despite being unemployed and that the banks did not check their ability to repay the debt.

One was made redundant, but the bank kept increasing the credit limit – from $6,000 to $40,000 – on an interest rate above 20%.

“The bank hounded me with phone calls and the threat of debt collectors. I eventually gave up and declared bankruptcy. The bank has lost nothing through their predatory lending, and I have been left with exactly that.”

Another reader said his bank “continually increased my credit card limit without checking my financials. I did not have an income. They did not check if I could afford the repayments they would be asking for. I have suffered financially.”

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Many of those affected by bad advice were educated and considered themselves financially literate. Some worked in the financial industry themselves, but say they were lied to.

Other readers said insurance companies had refused to pay claims for property damage sustained in massive storms officially declared disasters by governments.

The impact of financial malpractice has spilled far beyond people’s economic circumstances: contributing to chronic stress, ill-health, and family breakdowns.

“The non-economic loss of this last 11 years of hell cannot be quantified,” one reader wrote.

“I am now on lifelong medication due to a serious medical issue as a direct result of the chronic stress … my children have had their childhood robbed, my elderly mother cannot have the surgery she needs as her life savings have been decimated.”

With the sheer scale of malpractice uncovered over the last week, and a growing political consensus about the importance of its work, the royal commission now appears almost certain to be extended.