Phillip Harris says he wants closure and justice after being signed up to a 59-page contract. (ABC Illawarra: Justin Huntsdale)
A man who says the Commonwealth Bank signed him up to a complex contract he did not ask for after he had suffered a brain injury now wants to seek damages, but does not have enough money to engage a lawyer for a lengthy legal battle.
Phillip Harris was in a car that was hit by a drunk driver in September 2000, when he was 19.
The incident left him with a broken spine, fractured sternum, and a fractured foot.
In November the following year, on his first night out since the accident, Mr Harris was set upon by a gang of thugs outside a Sydney nightclub and beaten almost to death.
- Wollongong man Phillip Harris, 37, was paid a large sum in compensation after a car crash in 2000
- In late 2004 he asked the CBA to hold hold his money and allow him access to $500 a week while he recovered
- He claims the financial adviser ignored his request and locked him into a complex contract
He was placed in an induced coma for 10 days after the unprovoked assault, with a fractured skull, bleeding on the brain, and smashed nose and cheeks.
Doctors knew the frontal lobe injury he had sustained could take 10–15 years to recover from.
They also diagnosed Mr Harris with epilepsy and, later, post-traumatic stress disorder.
In 2004, having undergone three years of monitoring, rehabilitation and multiple operations, Mr Harris went to the Commonwealth Bank, wondering what to do with the hundreds of thousands of dollars in compensation he had received from the car crash.
“I didn’t go to the CBA to request a really detailed contract,” Mr Harris, now 37, told the ABC.
“I just wanted them to hold the money away from me because I wasn’t well enough.”
Mr Harris said he had wanted the bank to secure his funds and pay him a living allowance of $500 a week while he recuperated.
Man wanted money locked away
Instead, Mr Harris was ushered into five-year, 59-page contract he did not understand.
It included “vertical products” — among them life and trauma insurance — he had not asked for.
Mr Harris said part of his anger stemmed from the fact he had received advice from two other advisers (neither affiliated with the Commonwealth Bank), who had told him he was “clearly not well enough” to enter into a complex contract.
“I thought I was having them lock all the money away from me for the next 12 months,” he said.
“Then in 12 months’ time we would see how much better I’d become, and then see where I was at, if I was well enough [to enter into a detailed contract].”
Mr Harris said the adviser opened a new account on his behalf and told him he would not be able to withdraw more than $500 a week from it.
This, Mr Harris said, turned out to be a “blatant lie”.
He said the bank had also increased his credit card limit to more than $10,000, despite his understanding being that his limit would be reduced to $2,000 per the financial plan he thought he was getting into.
“I didn’t even know I was in a contract. I didn’t understand any of it,” he said.
Harris was in ‘excellent health’, CBA says
In a statement to the ABC, the Commonwealth Bank said Mr Harris had not disclosed the fact he had a brain injury when he came in to seek advice.
According to the bank’s timeline of events, a financial adviser “conducted a financial needs analysis to determine Mr Harris’s needs” on December 29, 2004.
“It was noted that Mr Harris was in excellent health,” the statement read.
Mr Harris denied he kept his injuries a secret and said he was visibly infirm when he went to meet the adviser that day, having had an operation on his foot the month before.
“The only conversation we had that day [in December 2004] was about my brain injury,” he said.
“It says in the contract that the money was from compensation.”
Mr Harris suffered extensive injuries in the car crash, incurring huge expenses in medical bills. This X-ray shows titanium pins inserted into his spine. (Supplied: Phillip Harris)
Mr Harris said the bank effectively locked him into products he did not know he was buying at a second meeting a little more than a week after the first, on January 6, 2005, with an approval for a life insurance account and trauma insurance a few months later, to add to his investment account.
Coupled with the relaxation of credit card limits, Mr Harris believes this enabled him to rack up debts he was not aware of (due to his brain injury), and unacceptable service fees to be charged.
By the time he realised his money was being whittled away and overspent by himself, it was too late.
“The CBA created a deficit in excess of $260,000 in the initial 12 months,” he said.
Mr Harris said he had attempted to withdraw from the contract but was told he would need to pay an additional $40,000 to have the contract reviewed, and it would also cost him about $100,000 in exit fees.
According to the bank, Mr Harris maintained ongoing activity in his accounts over 2006 and 2007, then made a full withdrawal of funds remaining in his investment account, and it was closed in March 2010.
Watchdogs deemed contract ‘unenforceable’
Mr Harris tried to escalate the case with regulatory authorities, including the Australian Prudential Regulation Authority, Australian Securities and Investment Commission, and the Financial Ombudsman Service.
He said the regulators — which have declined to comment to the ABC on individual cases — told him the bank’s contract was “unenforceable” because of the circumstances under which he entered into it.
He is now seeking damages he believes may run in excess of $1 million, but does not have the money to engage a lawyer to take him through what would be a lengthy legal battle.
‘Same old song’
Mr Harris’s story is all-too-familiar, according to NSW activist group Bank Reform Now head Peter Brandson.
“Some of these financial deals are so complex that even if you haven’t got a brain injury you need to have expert advice,” he said.
He cited the case recently before the banking royal commission of a person with Down syndrome who was manipulated into signing up to a life insurance scheme over the phone.
At a recent parliamentary inquiry, Commonwealth Bank chief executive Matthew Comyn admitted the organisation had failed its customers.
“We’ve been too slow to identify problems, too slow to fix underlying issues and too slow to put things right for customers,” Mr Comyn said.
“We have underinvested in prevention, even though we have invested significantly in customer remediation — this is completely unacceptable.”