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adult industry bank of que sex Prostitution ombudsman

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Sex industry faces 'financial discrimination' from banks, ombudsman says

By David Chau and Lin Evlin

Updated January 04, 2018 18:14:30

A generic sex worker photo.

Photo: Business owners in the sex industry claim the banks are refusing them loans on "moral grounds". (ABC News: Malcolm Sutton)

Related Story: The 'boyfriend experience': How our sex industry is adapting to female demand

Related Story: App aims to make it safer for sex workers to connect with clients

Map: Australia

The small business ombudsman has taken up the sex industry's fight against Australia's largest banks.

Key points:

Businesses in the sex industry have complained about being refused loans for "moral" reasons

They allege the big four banks and others have engaged in "financial discrimination"

The ombudsman is concerned this could lead to more cash-only transactions in the black economy

Owners of brothels, escort agencies and adult-only retailers are alleging they are victims of "financial discrimination", in particular, being refused loans and merchant facilities on "moral grounds".

Ombudsman Kate Carnell lambasted the banks for their "hypocrisy" in not providing services to adult businesses which are "appropriately registered and regulated".

"Access to banking services is essential for a legitimate business to operate," Ms Carnell said.

"It's a bit rich for the banks to decide which industries are moral and which aren't.

"I think there would be lots of Australians that believe the banks are the last people that should be doing that."

Ms Carnell got involved after she received a complaint from the Eros Association, which describes itself as "Australia's longest serving adult industry association", having been around since 1992.

Eros surveyed several businesses in the industry and detailed its findings in a recent report.

It claims that most of the alleged discrimination was from the big four banks — Commonwealth Bank, Westpac, NAB and ANZ.

Others on the list include medium-sized banks (Bank of Queensland, Suncorp and Bendigo Bank), along with specialist merchant services (EFTPOS, AMEX, Afterpay, ZipPay and Shopify).

Eros believes these financial institutions are passing moral judgment on certain types of businesses because they are fearful about "reputational risks".

It also said the most common reason for being refused loans was "being part of the adult industry".

'Turned down for working in an adult store'

Keith Boswell, the managing director of adult retailer Be Daring, told the ABC he encountered discrimination from the Bank of Queensland, who he had banked with for the past 20 years.

"My daughter, who is a manager at my store, applied for a motor vehicle loan but BOQ turned her down because she was working at an adult store," Mr Boswell said.

When he approached the local branch manager, he was told BOQ's new policy was that it would not offer finance to those who work in the adult industry — even if the loan is unrelated to the adult business.

"We were appalled as that's a lot of power for any institution to have," he said.

Mr Boswell also said BOQ refused to provide him with a copy of the policy, and feels he has no choice but to bank elsewhere.

The 'boyfriend experience'

 or that are frequently associated with criminal organisations


More women and couples are seeking the services of male escorts, data shows, necessitating a shift in traditional concepts of the sex industry.

A BOQ spokesperson said: "A number of industries have been identified that fall outside BOQ's risk appetite."

These include "online gambling, arms manufacturers, adult entertainment and businesses with unusual transaction activity, or that are frequently associated with criminal organisations".

Eros said it has "repeatedly requested" to see the big four banks' internal policies in regards to adult-only businesses, but has been denied access.

"Overall, it appears financial service providers are treating adults-only businesses unfavourably on the basis of broad internal policies against the 'adult industry' rather than tailored assessments of financial risk," Eros said in its report.

The advocacy group spoke with other adult business owners who also claim to have been victims of financial discrimination.

'No letter, no notice'

Another business, an adult wholesaler — who was also a loyal bank customer for 20 years — said his merchant services were suddenly disconnected.

"Last night, I received a phone call after 6:00pm telling me that my merchant services were going to be turned off today," the anonymous respondent said.

"Sure enough at 1:00pm they pulled the plug leaving me with four retail stores, five online retail sites and our wholesale without credit card transaction facilities.

"No letter, no notice."

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