Banking Bad

by Adele Ferguson

  In August, Koh’s employment was terminated. He told me the bank had offered him money to sign a gag order and resign. ‘These people do not understand that you can’t buy integrity,’ he said. When he’d refused, his boss, CommInsure chief executive Helen Troup had summoned him to a meeting, where he was sacked. Troup’s reason for his dismissal was that he’d breached the bank’s IT policies by forwarding work files to his personal email account – an action he’d taken because he was concerned the files would go missing. He said he had been given approval to do so by his then boss and that everyone did it.

  It was to no avail. ‘I walked away and told myself, I don’t need your money. I’m not going to be silenced by your gag order. And you can choose to say whatever you want to my colleagues. I have no control over that. But damn if I’m going to be silenced.’ Yet Koh wasn’t quite ready to go public and convincing him to speak out wasn’t easy. Even after talking to Jeff Morris, he preferred to be anonymous. I knew it would be more powerful if he revealed his identity, so I kept on at him, pointing out that he didn’t plan to go back into the industry.

  I knew Koh was toying with the idea of suing the bank, so I introduced him to John Berrill, a lawyer who’d recently resigned from class-action law firm Maurice Blackburn. I also brought in Wacka, who was outraged that CBA didn’t appear to have learned any lessons since the Senate inquiry and was more than ever convinced it was time for a royal commission.

  Fortuitously, I received a cache of internal CommInsure documents and emails at this point, some from a fake email address, some in an envelope, that backed up what Koh was saying about the culture and antics inside the claims department at CommInsure. They included heated emails between doctors and CBA claims managers over customer claims; reports of files going missing; and written complaints that doctors were being pressured to change opinions to avoid payouts. Other documents confirmed that outdated medical definitions were still being used, including those of heart attacks, cancer, strokes and rheumatoid arthritis. Following a report of a rise in bladder cancer claims, a team was asked to tighten its definition of the illness, but in such a way that it would not attract the attention of the ratings agencies (which use formulas to compare benefits with premiums and work out a value-for-money measure), who might lower CommInsure’s ratings.

  The overwhelming message of the documents was that CommInsure would generally do all it could to delay, deny and, if all else failed, litigate claims. It reminded me of CBA’s treatment of Noel Stevens, who died fighting the bank. It was a clear case of valuing profit before people. What became apparent was the role senior executives had given to claims managers. Despite limited training and lack of medical degrees, they were the ones who decided when to ask a medical officer for an opinion and what medical information should be provided to that officer. And there was evidence in the documents that the remuneration of some claims staff was linked to key performance indicators such as net loss ratios – the ratio of paid insurance claims to premiums earned (for instance, $80 in claims for every $160 in collected premiums produces a loss ratio of 50 per cent). Between the documents and Koh’s testimony, CBA had a lot of explaining to do.

  I read through the documents and pored over numerous cases showing terrible treatment of customers by the insurer. One case that choked me up – and did so again when I re-read it – was a middle-aged man who made a total and permanent disability (TPD) claim following a diagnosis of motor neurone disease. This terminal illness affects the nerve cells controlling the muscles that enable us to move, speak, breathe and swallow, and leads to a horrific and painful death. The treatment of the man by CommInsure was ghastly.

  The man lodged a claim and was given the runaround as he was trying to grapple with his health. Eight months after his diagnosis, one of his doctors sent a letter to CommInsure describing his condition as rapidly deteriorating. The patient’s arms and hands were paralysed, he couldn’t walk and he might not survive the next few months. The response from CommInsure was unconscionable: ‘We are unable to do this calculation at present. We would first need to receive and assess the TPD claim and ensure he meets the criteria to receive TPD before we can look at a possible calculation.’ A relative of the man then hired a lawyer, who fired off an email to the senior claims manager saying, ‘Your behaviour towards our client is inappropriate and appears even malicious.’ But four months later the lawyer was still trying to get a payment from CommInsure, which continued to drag its heels.

  By this stage the man was bed bound, couldn’t swallow, speak or move his head. A letter sent by a doctor to the man’s lawyer said, ‘Psychologically he is distressed, depressed and naturally frightened by his condition. He is ventilated . . . His prognosis is extremely poor. I believe that sadly, it is unlikely that he will live for more than a few months.’ Yet still CommInsure delayed the payment. It was only after he died that the bank finally paid out.

  Another case that resonated with me was that of James Kessel, a forty-six-year-old diesel mechanic, who had lived all his life in the tiny northern NSW town of Wee Waa. Kessel had had a heart attack in September 2014 that was so severe that his heart stopped and nurses had to restart it using a defibrillator. Yet, the bank denied his claim because he didn’t have a high enough level of a protein called troponin I in his blood. (A particular level of troponin I indicates that a heart attack has occurred.)

  Kessel was dirt poor, living in a tin shed and trying to scrape together a living when I went to meet him. He’d taken out a life insurance policy with CommInsure more than twenty-five years earlier and had faithfully paid premiums for a trauma policy which should have covered him if he had a life-threatening illness such as a heart attack.

  What James didn’t know when I met him was that the troponin I level accepted as indicative of a heart attack had changed more than a decade before, yet, as evidenced in the documents I had received, CommInsure had continued to use the old, higher measure as its benchmark – which resulted in legitimate claims like Kessel’s being denied. Indeed, Ben Koh had conducted an internal audit of heart attack claims and found that more than half of legitimate claims were being knocked back due to the bank’s use of the outdated definition.

  The Age and the Sydney Morning Herald gave me the green light to cover the story. I also pitched it to Four Corners, suggesting I work on the program with researcher Mario Christodoulou and Klaus Toft, the producer who’d worked with me on a wage fraud exposé of convenience store giant 7-Eleven. At this stage Koh was still deciding whether to go public, but I had enough to proceed while waiting to see if he would change his mind. I was also hoping that a high-profile television report might bolster the case for a royal commission. With Malcolm Turnbull having recently taken over from Tony Abbott as Prime Minister, I thought there was a chance the Coalition might change its stance on this issue.

  After Four Corners gave me the go-ahead, James Kessel was one of the first people who agreed to be interviewed. We flew to Wee Waa in January 2016. As the camera rolled, I showed Kessel internal bank documents reporting that his case had been escalated to an internal CommInsure committee meeting in December 2014, days before his claim had been rejected. The committee trawled through four years of his medical records trying to find a reason to reject his claim, but decided he had disclosed everything. ‘The sole reason the insured does not satisfy the policy terms is due to him not reaching the troponin I threshold, which is not in line with current medical practice,’ an email said. The email also warned that if the decision was disputed it would attract negative attention from the Financial Ombudsman Service. ‘We recommend that the committee consider this claim for ex gratia payment and that the committee also discuss the amount to be paid.’

  But CommInsure didn’t make that payment. Instead, as Kessel told me, ‘They sent me a letter, which . . . simply states, that, “Your troponin levels were not at the right level so you don’t get it.” Goodbye. Have another heart attack. Better luck next time.’

  It was less than
two years since Narev had apologised for the financial planning scandal at CBA, and here we were again. The bank was on track to generate a $10 billion profit, and was the most profitable company in Australia, but it was doing it at the expense of its most vulnerable customers.

  *

  It seemed CBA didn’t discriminate in its treatment of policyholders – even if they were employees. Another person we tracked down for an interview on Four Corners was thirty-two-year-old Matthew Attwater, who had been handpicked from the bank’s 44,000 workers to be named CBA’s employee of the year in November 2010. Ralph Norris, then CEO, personally praised Attwater’s abilities.

  It was all downhill from there. A close relative with a history of violence savagely attacked Attwater and cut off his dog’s head. Attwater showed up for work covered in bruises, but although the physical abrasions healed, his mental state deteriorated and he spiralled into a deep depression.

  The bank organised a meeting for Attwater with a forensic psychiatrist. The psychiatrist found that Attwater’s symptoms were ‘severe’ and he presented ‘as a severely disabled person who is markedly affected by a cluster of psychiatric symptoms which would fall under the broad heading of PTSD [post-traumatic stress disorder]. In addition, there were strong elements of social phobia.’ The psychiatrist advised that Attwater should be medically retired from the bank and ‘the workforce in general’. Attwater was told to lodge a TPD claim. He was insured with CommInsure through a CBA superannuation fund. But his claim was rejected on the basis he could work.

  ‘My world stopped that day,’ said Attwater. ‘How can one department say, “No, sorry, you’re so disabled that you can no longer work for us and that you’ll never, ever be able to work in any industry,” and then for an insurance assessor to look at that and say, “Well, no, not really. You can . . . there’s more things that you can do”?’

  Given that Attwater had been ‘ill-health retired’ from the bank, his lawyers arranged for nine different psychiatric and other medical reports. They all supported his claim, but CommInsure continued to refuse to pay out.

  A similar case involved Helen Polydoropoulos, a CBA employee I interviewed who was diagnosed with multiple sclerosis (MS) and was ‘ill-health retired’ by the bank in late 2011. MS affects the central nervous system and is a painful, debilitating and chronic disease, which is currently incurable. Like Attwater, Polydoropoulos had a life insurance policy with CommInsure, so when she was ‘retired’ by the bank she lodged a TPD claim. It was rejected. Over the next four years, she lodged multiple claims and each one was turned down by the same medical officer who had retired her from the bank.

  The penultimate person to be interviewed for the joint Fairfax/Four Corners investigation was Ben Koh, who was still running hot and cold on whether to appear. He’d been speaking to Jeff Morris and John Berrill, but he was still having trouble deciding. Koh finally agreed to appear and let us use his full name and position, but asked that we film only the back of his head.

  As we were finalising the story, a CBA representative rang and said that Ian Narev, who had repeatedly declined to be interviewed, now wanted to talk, with the unusual proviso that the interview be run in full on the websites of both the ABC and Fairfax. Fairfax agreed, but the ABC declined as that was contrary to its policy.

  The interview with Narev was bizarre. I had twenty minutes and a lot of questions to cover. Narev had clearly rehearsed his talking points and been fully briefed on all the case studies, including Evan Pashalis, but he wasn’t expecting me to show him part of a video interview with Pashalis, whose insurance claim had been rejected twice despite him being diagnosed by two specialists as terminally ill with acute myeloid leukaemia. In the interview with Pashalis, I asked him how he felt about his treatment by CommInsure. He replied, ‘Unfortunately, I’m not surprised at all. It’s just so frustrating. Why would you torment a dying person and their family? What do they gain out of this? A few hundred thousand dollars? I would have put funds aside for my daughter’s future . . . I could [have planned] for her schools, place[d] deposits, [done] what I needed to do for my family once I’m gone. This is just outrageous. I don’t know . . . what we need to do. But I’ll tell you one thing: before I leave this planet, I’ll fight with every [bit of] energy I can muster.’

  I asked Narev if he had anything to say to Evan Pashalis. Narev replied, ‘Well, first of all, that is an extremely distressing video to see in relation to any customer of the Commonwealth Bank. So the first thing I will say to him is how sorry I personally feel. And I will be conveying my apologies to him personally and inviting him to have the opportunity to come to speak to me . . . so I can make sure I understand at a human level exactly what he’s gone through.’ Narev went on to apologise to all the victims, saying CommInsure staff were already reviewing and updating medical claims.

  In relation to the bank’s treatment of Koh, and in response to Koh’s allegations, he fudged every question. When I asked Narev whether he’d responded to Koh after receiving an email Koh had written to him the previous August outlining some of his concerns, Narev said, ‘I need to emphasise again what I said before, which is: when specific complaints are raised anywhere from inside the insurance business, there are certain prescribed procedures in terms of how to deal with those sorts of concerns.’

  I asked Narev what CBA sacking Koh after he’d become a whistleblower told us about the bank’s attitude to speaking up about the truth. Narev replied, ‘As part of the, ah, emphasis that our board has put, I have put, ah, over a period of time on ethics and values, we are emphasising the importance of people speaking up when they see something wrong, but actually also when they’ve got good ideas, because that’s a big part of being in an innovative culture.’

  Narev stumbled through the interview, doing his best to ignore the questions I put to him. It was the same old story: apologies and hand-wringing and promises that big changes were underway. In fact, like Narev’s responses, little had changed at CBA.

  *

  Hours before the Four Corners program, ‘Money for Nothing’,1 aired, Wacka Williams called me in a panic to say someone from CBA’s PR team (who still works there today and who had tried to smear Jeff Morris years before) had phoned him to say that one of our case studies, James Kessel, was a con man and had faked his heart attack and that his brother had also faked a heart attack to lodge fraudulent insurance claims. The PR person said the Kessels were a family of crooks and James Kessel was pushing drugs in Wee Waa.

  Wacka was worried. I was angry, but I knew the PR person was wrong and trying to undermine the story: I had seen how poor Kessel was and knew he had never pursued a claim against the bank. My blood boiled at the dirty tactics CBA was using in an attempt to disparage and undermine our witness. I told Wacka to watch the program, as it included an interview with the cardiologist who’d saved Kessel’s life. I told him Kessel’s brother had actually died of heart failure caused by an undiagnosed heart condition that had taken the family by surprise. As for drug pushing, that seemed implausible, given the poverty Kessel was living in when we met him.

  The next day Wacka rang the PR person and said, ‘Did you watch the show? Some fake heart attack. [James Kesssel] was dead and got brought back. And his brother died.’ Wacka said the PR person took it in his stride, claiming the allegations had come from an anonymous tip and that he would still call the police about the drugs in case the story was true.

  *

  In response to the program, Narev apologised publicly, but he also began punishing the messenger. Within days, CBA pulled millions of dollars of advertising across the entire Fairfax group, indefinitely. This was around the time Fairfax had announced it was axing 120 jobs as part of a cost-cutting exercise, and I felt sick to the stomach about the further loss of revenue.

  Then David Cohen, CBA’s chief legal counsel, wrote a letter to the ABC and Fairfax in which he said: ‘We understand from Adele Ferguson, the journalist featured in the Four Corners program on 7 March 2016, tha
t she has received personal information about CommInsure customers from Dr Ben Koh, a former employee of Commonwealth Bank.’ But I had never told anyone how I’d received the internal documents or who had sent them, and I had certainly never told CBA or David Cohen they had come from Dr Koh. Cohen went on to say that the information included highly confidential and sensitive medical, financial and private information and that, ‘If Fairfax or the ABC has held or currently holds personal information of CommInsure customers without the express consent of each affected customer, it will be necessary for CommInsure to notify the Privacy Commissioner of a privacy breach and to inform the Australian Prudential Regulation Authority.’2 He requested that by the following morning we confirm we’d had the express consent of each affected customer to be in possession of their personal information. Fairfax and the ABC sent a polite response denying I had revealed who was the source of the documents.

  A few days later I received a phone call from a PR person at Maurice Blackburn asking if I’d spoken to one of their clients, who was also a claimant of CommInsure. They told me the woman’s name, but I hadn’t heard of her. They alleged she’d said that ‘Adele from Four Corners’ had called her and recited her medical history chapter and verse, including that she suffered from depression and had been a victim of domestic violence. The PR person told me the woman said ‘Adele’ had then suggested she meet with lawyer Michael Bates to discuss her claim and that all her airfares, accommodation and expenses would be paid for. The woman claimed to be shaken that somebody knew all her personal details and had rung up Maurice Blackburn and CommInsure as a result.

  Apparently ‘Adele’ was moonlighting as a spruiker for a law firm. The problem was, whoever had stolen my identity hadn’t done their research properly. Ben Koh had a lawyer called Michael Bates, who worked with John Berrill, but he was based in Melbourne, whereas the Michael Bates that fake Adele was spruiking was a patent lawyer based in Sydney. Whoever was behind it was clearly trying to discredit me by suggesting I was a client thief, a spruiker, on the take, and illegally using personal records.