Bank of Queensland (ASX:BOQ) share price on watch after ‘unfair’ loans finding

The Federal Court has found the bank’s small business loans contain unfair clauses
The post Bank of Queensland (ASX:BOQ) share price on watch after ‘unfair’ loans finding appeared first on The Motley Fool Australia. –

The Bank of Queensland (AS:BOQ) share price will be on watch this morning after the bank’s small business loans were found to be unjust.

The Federal Court made the finding against the bank’s small business contracts yesterday. The issue was first flagged by the Australia Securities Investment Commission (ASIC).

The Bank of Queensland share price finished yesterday’s session trading at $9.57.

Let’s take a closer look at the Federal Court’s ruling.

Federal Court ruling

The Bank of Queensland share price is in the spotlight after the bank was ordered to replace loan contracts.

Bank of Queensland must now work with its small business customers to renegotiate contracts both parties believe to be fair.

The court found in favour of ASIC’s claims Bank of Queensland’s small business loans contravened Australian Consumer Law and the ASIC Act.

The Bank of Queensland didn’t respond to The Motley Fool Australia’s request for comment in time for publication.

The loans’ contracts allowed the bank to change a loan’s terms without notice and default loans without proper evidence.

Small business customers could also face penalties for leaving contracts because of newly implemented terms.

Additionally, customers couldn’t address issues that led the bank to find they had defaulted on their loan.

The Bank of Queensland had also placed a clause in the contract stating whatever they believed the borrower owed was the true amount. If the bank erred, the borrower was responsible for proving their true debt.

Both ASIC and the court didn’t claim the bank had used the unfair terms against any of its small business customers. However, the bank agreed the terms were likely to financially harm its customers.

The court found similar clauses within the bank’s other small business customers’ loan contracts. It ordered the Bank of Queensland to replace all instances of unfair terms with new, fair terms.  

It isn’t the first time an ASX-listed bank had been pulled up on its loan contracts. In 2010, the Federal Court found the Bendigo and Adelaide Bank Ltd (ASX: BEN) had used unfair clauses in its contracts for small business loans.

Bank of Queensland share price snapshot

The Bank of Queensland share price is performing well on the ASX.

It has gained 27% since this time last year. It is also 59% higher than it was this time last year.

The bank has a market capitalisation of around $6.1 billion, with approximately 639 million shares outstanding.

The post Bank of Queensland (ASX:BOQ) share price on watch after ‘unfair’ loans finding appeared first on The Motley Fool Australia.

Should you invest $1,000 in Bank of Queensland right now?

Before you consider Bank of Queensland, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Bank of Queensland wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

These 2 ASX shares are rated as strong buys by brokers

Why the Bank of Queensland (ASX:BOQ) share price hit its 52-week high
The Bank of Queensland (ASX:BOQ) share price is up 61% in a year. Here’s why
ASX 200 flat, Lynas soars, City Chic jumps

Why the Bank of Queensland (ASX:BOQ) share price is climbing today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!