Boscawen John: Anti-Money Laundering and Countering Financing of Terrorism Bill — First Reading 
Boscawen John: Anti-Money Laundering and Countering Financing of Terrorism Bill — First Reading 
[Volume:655;Page:4780] 
JOHN BOSCAWEN (ACT) 
: 
 The Anti-Money Laundering and Countering Financing of Terrorism Bill is a bill I was not intending to speak on but I have come back into the House and picked up the previous two speeches—in particular the speech from Clare Curran but also that of Dr Hutchison. 
Hon Trevor Mallard 
: A very good speech. 
JOHN BOSCAWEN 
: It was a very good speech. Clare made three or four key points that came across to me. She talked about the robustness of our financial system she talked about enhancing our reputation as a country and she talked about terrorist organisations and transferring money. I pick up her first point the robustness of our financial system. I have only just come back into the House after spending 40 minutes on the phone talking to a Mr Bruce Graham in Tauranga. Mr Graham is coming up to his 70th birthday. We talked about an issue that a lot of members I speak to have had correspondence on. Some members will have some understanding of the issues but others will have just a cursory acquaintance with them. 
Mr Graham is one of some 13000 to 14000 mainly elderly investors who have lost money through investing in the ING Diversified Yield Fund or the ING Regular Income Fund. The point that Mr Graham made to me is that he has lost part of the proceeds that had been built up over 80 years—30 years of income from the work that his father did that he inherited and 50 years of income from the work that he did himself. He said that his father spent most of his life in England apart from the time he fought in the Second World War. When he came to New Zealand with his young son he said to him: “You’ve got to be able to trust your bank. If you’re in a country where you can’t trust your bank it’s time to find a new country.” So when Clare Curran talked about the robustness of our financial system it challenged me to give this speech this evening. 
Earlier this afternoon I spoke to Mrs Liz Brown the Banking Ombudsman on this issue. I was fascinated to learn that of the 14000-odd people who lost money invested in ING New Zealand Ltd through ANZ some 2800 were advised by advisers employed by or in some way linked to the ANZ bank. Those 2800 people have an advantage over the other 11000 people who were not. They are privileged because they get the services of the Banking Ombudsman. The Banking Ombudsman is someone who can listen to them hear their complaint and adjudicate on it. In that regard they are very lucky because some 11000 people who invested in those two funds do not have that right. As I understand it they might have been able to apply to the Insurance and Savings Ombudsman for consideration but because ING is I understand a subsidiary of ING Australia and the Australian company is not covered by that system they do not have that protection. 
Clare Curran also talked about enhancing our reputation—the reputation of New Zealand—and although I realise that I am drawing a very long bow between terrorism and money-laundering and the situation in which 14000 investors find themselves I think it is an important issue to raise. In some cases these people face the loss of significant parts of their life-savings. They have had an offer made to them by ANZ and ING that they have to accept prior to 5 p.m. next Friday. If they accept that offer of 60c or 62c in the dollar they sign away their rights. Right now there is a Commerce Commission investigation into the activities of those two companies. I am told that it has been going on for more than 6 months and that the Commerce Commission advises that it is likely to continue for at least a further 6 months. It is quite possible that the Commerce Commission will find after more than a year of investigation that there was misleading conduct and deceptive conduct—it may not happen but it is a possibility—and if that were to happen it might give rise to those people being able to claim back their money in full. But anyone accepting the offer by 5 p.m. next Friday is signing away his or her rights to get that upside. Mr Graham said to me this evening that that is blackmail. This bank is saying to its investors: “Sign up take this money take 60c in the dollar and sign away your rights.” I ask today whether that is right. 
Most of us in this House have received emails from the Frozen Funds Group concerning ANZ and ING. It has called upon parliamentarians to speak out against this situation. I have given a number of speeches on the issue of finance companies. I have never discussed this particular issue because I have not had the chance to properly investigate it. The Banking Ombudsman said to me that of the 2800 cases she is entitled to investigate she has had 450 complaints. So about one-fifth of the people have lodged a complaint. Of those 150 have been referred back to the ANZ bank which gives her a file of 300 complaints. Of those 300 complaints 150 have been decided—approximately 50 percent have been decided and 50 percent are yet to be adjudicated on. So we have a sample of 150 cases. What I found fascinating in what Mrs Brown said to me is that she has found in favour of the complainants in two-thirds of those cases. So in rough numbers of the 150 cases that have been decided on 100 have been found in favour of the complainant. Two-thirds of the cases have been found in favour of the complainant and one-third of the cases has been found against the complainant. 
So a person lodges a complaint with the Banking Ombudsman because that person is not happy with the answer he or she has had from the ANZ bank that independent ombudsman looks into it and in two cases out of three she says that the bank has been wrong and the complainant is right and awards the complainant all or part of what the complainant has claimed. Let us imagine for a moment that we had consumer protection law that allowed all 13000 people affected to have the benefit of the Banking Ombudsman; on that rough calculation maybe 8000 people would have a genuine complaint and 4000 would not. 
However it is actually worse than that. Mr Bruce Graham is one of those 50 people whose complaint was declined by the Banking Ombudsman. Liz Brown’s office spent many many months looking into Mr Graham’s case and he was declined. What I found interesting was the circumstances in which he was declined. He was declined because apparently some 30 pages of fine print were attached to his document. He read only the first four pages. Because he had been given 30 pages the Banking Ombudsman was able to point to the fact that he had been given notice—he was on notice and therefore he had no claim. That was despite the fact that he had made it quite clear to his financial adviser at the ANZ bank that he wanted an investment that was safe an investment where he would not lose his capital. He did not need the income but he wanted his capital to be safe. That was the one thing he stressed. He raised it with his investment adviser who I understand was an employee of the ANZ bank. He said “Is this safe?” and she said “It’s as safe as the bank.” His wife witnessed his financial adviser saying that. But one of the reasons he was declined was that apparently the ANZ bank had said to Mrs Brown that its advisers would never have said that. So despite the fact that he is prepared to swear that that was said Liz Brown appears to have favoured the bank. 
I make this point: the KiwiSaver system has default providers. I joined as a member of Parliament and I am with the AXA New Zealand provider. The ANZ bank has privileges as a result of that system. I believe that the ANZ bank and the ING group owe these investors a lot more than what they are giving them. Thank you Mr Assistant Speaker Roy.