Victims of dodgy NAB financial planning advice say compensation does not cover losses, heartache

Victims of dodgy financial advice from a former National Australia Bank (NAB) financial planner, say the compensation the bank is paying is not adequate.

Veronica Coulston, a single mother on a low income, became mired in debt after following the advice of Graeme Cowper, a NAB financial planner.

She invested the inheritance she had recently received on her father's death, and was advised to borrow $150,000 for further investment, on top of the large mortgage she already had.

"I found that my finances were being blown out and that I was getting into further debt using credit cards to try to get myself out of the situation," Ms Coulston told 7.30.

"When I did contact Graeme, his advice was to draw down more money, $20,000 at a time in six months down the track."

Ms Coulston said the ordeal eventually took a physical toll as well.

"I was just getting into more and more debt and it was just increasing and it was making me feel very ill in the sense that I was having a lot of panic attacks, anxiety attacks and I couldn't sleep," she said.

"All that plays out ... being at home and my daughter experiencing me going through really difficult times and seeing all the emotional stress that was put on me because of my financial situation."

Danielle Wilkie was also advised by Mr Cowper and said she suffered a similar experience.

She and her husband Jamie were trying to get ahead financially so they could pay for the education of their twin daughters.

"Thinking that you are banking with the NAB, aren't they one of the top five Australian banks in Australia? So, I thought we'd be safe," Ms Wilkie told 7.30.

Two years later they faced financial ruin.

They had to pull their daughters out of the private school they were attending and they almost lost their house.

It has taken a big toll.

"For years it was a struggle to know that we've done this to our girls, that we weren't going to give them the life we thought we would," she said.

Whistleblower draws parallels with past CBA scandal

Jeff Morris blew the whistle on bad financial advice being given by the Commonwealth Bank (CBA) in 2014 and also gave evidence recently to a Senate committee investigating financial planners about NAB's behaviour.

"In my opinion the NAB financial planning scandal is a carbon copy of the CBA financial planning scandal," Mr Morris told that Senate committee.

The only difference is that NAB succeeded in sitting on the volcano longer. The fraud, forged signatures and appalling advice given to clients is identical."

Mr Morris is a friend and previous work colleague of Ms Coulston, who alerted him to her plight when he was critical of the Commonwealth Bank last year. Since then, others like Ms Wilkie have also contacted him.

The financial planner who advised both women, Graeme Cowper, was sacked by NAB in 2010 but continued to give advice, most recently for the AMP company, IPAC.

AMP said Mr Cowper was placed on paid leave when the NAB documents naming him were leaked and said he would remain on leave while the cases were reviewed.

Looking for Financial Outsourcing Services

"(Mr Cowper) was the blue-eyed boy up until the moment he was caught; he is now the so-called rogue planner," Mr Morris told 7.30.

"ASIC had, at a minimum, a breach report from NAB and they knew that 39 of his clients had been compensated and yet they say they did not bother to investigate for lack of resources. It is pitiful, frankly."

'It is the psychological trauma that is the worst'

Ms Coulston said the compensation offered to her by NAB did not go anywhere near covering her losses.

"Initially they offered the sum of $60,000," she told 7.30.

"That was the first offer they presented and then when their reply came back Jeff also pointed out numerous other things that they actually didn't pick up at all, that they were hoping that I would just not even address.

"Then they put forward another offer that came to the sum of $80,000 ... that's monetary side of things.

"It doesn't compensate for all the heartache and the pain of what actually happened and the impact that it had on myself and numerous family members. It was a very difficult time."

Ms Wilkie and her husband did complain when NAB offered a small compensation payment, but they did not feel strong enough to fight any more.

She said the bank acknowledged the harm the debt had caused her but made a derisory offer.

"Here is a token payout, never to speak of it again, and go away," she said was the tone of the letter.

"I just want what the money that we had to put into our mortgage back.

"I just want to be back to the day when I walked into their office - financially, emotionally.

"I don't think there would be any amount payable to fix the harm that [was] done in the last seven years, but if I could get back to where we were before we walked into the bank, that would be nice."

Mr Morris said most of the bank's victims were battlers.

"It's the psychological trauma that's the worst, it's the strain, the depression," he said.

"Living with this nightmare of being frightened, of not being able to pay your bills or your mortgage, it's terrible."

This news is reprinted from site http://www.abc.net.au/news/2015-03-18/dodgy-nab-financial-planning-victims-say-compensation-not-enough/6330590