When Steve and Iris Karamihos signed on the dotted line of a loan agreement with the Adelaide Bank, little did they know that four years later they would be crippled by debt.

The broker had told them they had equity in their Sydney home, and would they like $1.2m to invest in their cafe business? It was a dream come true. They didn’t need that much, but accepted gratefully.

Two years later, with their business in trouble, their income dried up, and the nightmare began.
Unable to make full repayments on the loan – in February 2011 the bank (on the basis of a default judgement awarded by the NSW court) first moved to evict them.
Their children scraped together $100,000 to stave off the eviction, and within weeks Steve and Iris had taken in three paying lodgers whose rent went directly to paying the debt.

But their efforts were not enough and the bank was set to foreclose again.
All seemed lost until they got in touch with Unhappy Banking – an organisation dedicated to overturning injustices to banking customers.
Geoff Shannon, the founder of Unhappy Banking, moved to file a complaint using the Dispute Resolution Scheme that all banks must adhere to.

The result was breathing space, ensuring Steve and Iris could not be turfed out of their home immediately.
But why a couple approaching a combined age of nearly 160 years was offered such a loan in the first place is the question now being asked of Adelaide Bank.
Last month Channel Nine’s A Current Affair highlighted Steve and Iris’ plight, bringing the issue of alleged irresponsible lending practices by banks into the full glare of media attention.
Geoff Shannon told Neos Kosmos that the bank had acted “appallingly” in offering the loan.

“The bank sold these people a wrong product. All the broker was interested in was earning commission.
“Don’t tell them that it’s going to cost them $7000 a month, don’t tell them that if the plan fails, they’re going to have no roof over their heads. It’s absolutely irresponsible,” said Mr Shannon.

“A line of credit or a reverse mortgage, would have been possibly appropriate, but what has happened here, is the bank and the broker have been virtually advisors for these people.
“There’s a law called ‘responsible lending practices’ and they breached it. Simple as that.”

Asked to comment on the dispute, in a statement provided to Neos Kosmos, Adelaide Bank said:
“No customer envisages getting into financial difficulty when they initially take out a loan, however, if this situation does happen, Adelaide Bank works closely with the customer to explore all the options available to them.

“We do this to ensure the customer can continue to meet their obligations and as a Bank we meet our regulatory and legislative requirements.
“We will continue to work with any of our customers who may be struggling to meet their obligations in an effort to reach a fair outcome for everyone.”

As Neos Kosmos goes to press, it seems a fair outcome for everyone may be some way off.
In a statement provided by Unhappy Banking, Mr Shannon said: “The bank is continuing with its bullying tactics and trying still to evict the family from the home.”

“The Unhappy Banking Group have briefed their legal representatives to move the court to set aside the default judgment obtained by the bank in 2010.
“By setting aside the default judgment then the bank would have no grounds to evict the elderly couple from their home.

“The couple were denied natural justice when the bank obtained the default judgment.”