Picking on the powerless

Could a bank as big as the Commonwealth Bank really be a slow learner when it comes to consumer rights and customer satisfaction?
That’s what we were left wondering this week as the news of the wind-up of the Colonial First State Mortgage Income Fund came through. Some 17,000 pensioners are said to be affected.

This news broke on February 16, and investors were mailed a letter regarding their options in the following days. However the termination took place on March 1 – not much time to consider those options. Age reporter, James Kirby, estimates some 17,000 pensioners will be affected. He also reported that the Colonial’s helpline told callers it will be “at least” four years before investors monies are returned….

Colonial First State is owned by the Commonwealth Bank. You may recall it was only a week or two ago that the CBA finalised negotiations with investors, via law firm Slater & Gordon, and agreed to a payout of approximately $200 million for those CBA borrowers adversely affected by the collapse of investment company, Storm Financial and ensures no CBA customer will lose their home.

Many previously wealthy individuals stood to lose everything from this collapse and the negotiated settlement will no doubt assist them to rebuild their finances and move on with their lives.
Colonial First State Chief Executive Officer, Mr. Brian Bissaker, said “terminating the Fund was in the best interests of investors as a whole”.

But who is going to help the many individuals who believed they have made a conservative investment with a rock-solid company such as Colonial First State? We contacted Slater & Gordon today to see if they are acting on behalf of unhappy investors in the Colonial case. Their spokesperson did not get back to us, but those who feel they have suffered/will suffer because of the mortgage income fund wind-down should so we can keep you informed of any developments.