The Chairman of Mahony Dominic Lawyers, John Mahony announced just before Easter 2009 that he was launching a “Class Action” against Australia’s Banks for not having passed on the full interest rate cuts stipulated by the Reserve Bank of Australia since August 2008. Between August 2008 and March 2009 the Reserve Bank reduced the cash rate by 425 basis points, whereas the average variable indicator rate of the major Banks for variable home loan mortgages fell by only 385 basis points. The effect of the Banks’ failure to pass on the full interest rate cuts has been felt by every home owner on a variable mortgage. It is estimated that the average loss to each home owner is of the order of $250.00 to $300.00 per month and continuing.
The basis on which John Mahony believes that legal action is justified against the Banks, is that it has for over 50 years, been an implied term in variable rate mortgages, that all reductions in the cash rate made by the Reserve Bank will be passed on in full to mortgage holders. Since the current Federal Government came to power however, Australia’s Banks have failed to follow that 50+ year convention, on which variable interest rate mortgages have been written. The decline of that convention now exposes mortgage holders to a mortgage contract which is essentially harsh and unconscionable as one party has unfair and unlimited discretion in the performance of the mortgage contract.
John Mahony’s proposed Class Action has attracted enormous media and public attention resulting mainly from eight separate appearances on Sydney mainstream television and numerous Sydney and Australia wide radio interviews.
To date, over 350+ people have, within a very short period of time committed their financial and moral support to the proposed Class Action.
John Mahony requires much more support from every Australian who holds a mortgage, as the combined fighting fund of the Banks is obviously substantial.
Unless a large number of people come together, then nothing will change and we will all remain hapless victims of an aggressively greedy banking system.
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