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Bendigo and Adelaide Bank managing director Mike Hirst has accused Macpherson + Kelley (M+K) of inadequately advising clients, tampering with communications between the bank and its customers, and withholding “vital information” from its clients.

M+K is leading a class action against Great Southern Managed Investment Schemes (MIS), which collapsed in May. The suit claims that loans made by Bendigo and Adelaide Bank were invalid because investors were misled by Great Southern when they took on the debt.

However, Bendigo and Adelaide Bank said that grower investors who have followed class action lawyers’ advice to cease paying their loans may need to reassess their decision. “We remain concerned that M+K is not adequately advising its clients as to the risks and potential consequences of its recommended course and that this in turn will compound financial penalties for those clients,” Hirst said.

Under debt collection guidelines banks are required to correspond with customers via their lawyers once the bank has been notified that the customer has retained legal representation.

“Unfortunately in the case of M+K, our correspondence to defaulting customers sent via M+K was tampered with, in that it had details removed and was issued to customers to whom it was not directed (including those not in arrears), with the result that the position of the bank was misrepresented,” Hirst said. “This also meant M+K was withholding vital information from its clients about their loan balances, loan arrears and interest that was being applied.” As a result, the bank has decided to liaise directly with its customers who are represented by M+K, Hirst said.

M+K issued this statement in response to the allegations: "We read with interest the media release by Bendigo and Adelaide Bank dated 22 December 2009. M+K has not acted improperly and has no further comment on this matter. M+K will continue to act in the best interests of its clients."

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