In the 90s Denise Brailey, a single mother who was beginning to make her name as a tenacious consumer rights advocate, enrolled in a criminology course. To her surprise she was told by her professor that there was no white-collar crime in Australia so she would be looking into murders and other assorted wrongdoing.

How things change. Over the past two weeks the banking royal commission has exposed the shocking extent of misconduct and possibly criminal behaviour by the financial sector in a system driven by greed.

The revelations have stunned the nation but not Brailey. She has campaigned on behalf of the victims of misconduct for more than two decades, helping hundreds of people to claim redress in a variety of cases such as the finance brokers scandal, and the collapse of the finance companies Storm Financial and Westpoint.

But the current royal commission, which has pointed towards the type of systematic fraud she has been denouncing for years, still represents a kind of crowning glory after years of hard slog for Brailey, who founded and single-handedly runs the Banking and Finance Consumers Support Association from a cottage in the Western Australian bush.

“I’ve lobbied for two royal commissions and 23 parliamentary inquiries in my career but this is the biggest scandal I have ever uncovered,” she says of what she calls the “black box” fraud carried out by lenders.



“I’m a little weary and a bit worn out. I’m 71 now and I’ve often wondered how long I can keep it up. But it’s something I started doing because people would come to me saying, ‘I’m about to lose my house and all my savings.’

“My parents understood decency and I think that’s where I get this from. I love digging into these kind of problems and and I love using my skills to help everyone else.”



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Brailey, who has completed three degrees to help in her fight, is nevertheless frustrated that the commission’s terms were drawn so narrowly by a government that tried from the beginning to do whatever it could to limit the impact of the inquiry on the big banks.

“I feel vindicated by what’s been revealed at the commission so far, although it’s not what we really want,” Brailey says. “The terms have been written by the banks’ lawyers and steered by Asic.

“We need a proper royal commission – this is not a proper royal commission. Kenneth Hayne is doing a good job, he has a high intellect and is very clever. Rowena Orr is also very impressive. But the problem is that he is only as good as the material put in front of him for political purposes.”

The current commission is just scratching the surface, she says, and should be extended to examine the “mechanics” of the loan industry that have so enraged Brailey and given her the motivation to keep digging.

In a 20-page submission to the royal commission, she details the experiences of borrowers who have come to her for help after being crushed at the hands of the mortgage industry.

They are typically people towards the end of their working lives, she says, who have paid off their mortgage but are tempted by sales people into taking out a large interest-only loan to buy an investment property. (The lenders even have an acronym for them: Arip, which stands for asset-rich, income-poor.) These loans require low documentation and are often approved with little proper regard for how much the borrower can afford. In many cases seen by Brailey, the income is actually exaggerated by the lenders – so-called “liar loans”. In addition, borrowers often discover that the size of the loan is much bigger than they thought.

“The banks devised a product, the interest-only loan. They wanted people to think it was a normal loan so they called it a low-doc loan because it only needed a low amount of documentation,” Brailey says. “They had to fudge the income to make unaffordable loans look affordable by use of a bank-engineered calculator, which could then be processed by a computer.

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“The banks were doing all this – the business development managers, the middle managers, the brokers. They were told they wouldn’t make any money if they didn’t do it. When they asked why they had to enter an income of $150,000 when it was $50,000, they were told that lawyers had checked it out and it was all fine. They were told that the inflated incomes on the loan application forms were projected incomes. The borrowers didn’t have the money but they were approved because it meant the brokers and other staff would meet lending targets and earn their percentage as a bonus.”



This kind of scenario was brought shockingly to life in the royal commission, such as in the cases of Jacqueline McDowall and her husband. They were guided into selling their home with disastrous consequences, by a Westpac adviser who nevertheless made thousands of dollars in commission.

“While all this evidence keeps coming out, you’ll never have trust or confidence in the banks ever again. It’s notable that all the people giving evidence are middle managers.

“A proper royal commission would have to look at the mechanics of the loan business and how the chiefs at the top of the banking sector are acting as a cartel. You’ll never clear it up unless you do that.”