Sex workers, adult shops and gun businesses say they are being denied banking services
When Simon Mawson and his partner Monique Turmine bought an established adult shop in 2018, they could not get business accounts and payment facilities from the major banks.
“The ANZ, the lady who we were dealing with, actually said: ‘You know, it’s most likely because of the industry that you’re trying to finance’,” Mr Mawson said.
Instead, the broker they were working with advised them to sign up with a friendlier smaller financial institution. The bank does not have branches or ATMs.
He and Ms Turmine had also been denied personal and car loans since owning the business.
“It’s frustrating. Our industry is a completely different place to what it was 50 years ago. There’s a huge focus on health and well-being, and on education,” he said.
“We are not doing anything illegal; our money is a good as other businesses.”
The adult shop owners’ experience of struggling to get basic banking services is not an isolated case.
NAB is the only bank that is upfront about not providing services to particular industries. A spokesman confirmed the bank did not provide banking services to brothels, but said it did provide services to some sex workers. CBA said it assessed applications for services on a case-by-case basis.
But the associations for sex workers, the adult industry and gun shops told the ABC that in practise, their members were routinely discriminated against when applying for financial services. Typically, they said, they were told their business was high risk, but most were refused services without any explanation.
Banks should not be the ‘moral arbiter’
Kate Carnell, former Small Business Ombudsman and Liberal ACT chief minister, said the public would be surprised to know how widespread banking discrimination was.
“It’s broad-based, but I would have to say the sex industry and gun retail space, is the worst,” she said.
The ABC has also reported on the “de-banking” (financial discrimination), of cryptocurrency businesses.
When Ms Carnell was ombudsman, she met with all four of the major banks to discuss the issue of financial discrimination against legally operating businesses.
“They haven’t changed their minds. It seems that they [banks] actually believe that they are the moral arbiter of our society,” she said.
“The banks haven’t been great corporate citizens… And I think most Australians would think the last people that we make our moral arbiter would be the banking industry.”
While Ms Carnell said banks should have the right to decide who they loan money to, basic banking services were essential for a business operate.
“They have no right to decide whether legal businesses can operate or not. And we’re talking about businesses that operate inside the law, that pay taxes, do all the right things.”
“They’re pushing them into a cash only type economy, which isn’t what we want at all. We want everyone paying appropriate tax operating in the legal system.”
Sex workers losing income
Gala Vanting, a Sydney-based sex worker and national programs manager at Scarlett Alliance, said the big four banks (CBA, Westpac, ANZ, NAB) were generally the worst to deal with.
“But smaller financial institutions like credit unions don’t necessarily do any better by us,” she said.
Global payment processors like VISA and Mastercard have also denied services to the sex industry. Last month London-based company Onlyfans changed its policy on adult content after pressure from its banking partners. Onlyfans later reversed its decision after pressure from creators.
“This kind of discrimination actually cuts off a lot of possible options for us for how we work, how we get paid. Where you don’t actually have an option to process payments, you actually can’t work,” Ms Vanting said.
Ms Vanting said sex workers who had made successful complaints to the Australian Financial Complaints Authority or anti-discrimination tribunals were forced by banks to sign non-disclosure agreements (NDAs) to get compensation payments.
“This means is that we don’t actually get to tell our story, but also that we don’t have very clear evidence about the widespread impact and experience that sex workers have on this issue.”
Mathew Roberts from Sex Work Law Reform Victoria said in most Australian jurisdictions sex work was legal and regulated.
“The behaviour by banks is unacceptable. I don’t know a single sex worker who has applied for a bank account openly and not experienced discrimination,” he said.
Mr Roberts said one escort agency owner lost an estimated $1 million in revenue when she was denied access to merchant services.
“It took her 15 banks until she could find a bank that would accept her,” he said.
“Another sex worker was on the phone to a bank and they hung up on her when she revealed her occupation.”
Afterpay doesn’t provide services to gun shops or adult services
Several gun shop owners have told the ABC, that the only way they got around banking discrimination was by setting up a parent company with a generic name and creating a subsidiary company for the firearms business.
The business owners did not want to be named due to concerns about being debanked.
Gary Georgiou is the director of Safari Firearms in Sydney. While the business of 30 years does have banking services with CBA, he has struggled to access some services.
“We are now trying to get an overdraft and are having a few issues. Other gun shops are having trouble getting EFTPOS facilities or merchant facilities with any bank,” he said.
In applications to a smaller bank, Mr Georgiou said he was knocked back for business car loans because he operated a “high-risk business.”
His business has also been denied buy now, pay later services from Afterpay.
“We were declined because we are high risk and it’s not part of their roadmap, they said.”
A spokeswoman for Afterpay confirmed the company did not provide services to adult services and firearms businesses.
“Although Afterpay is becoming increasingly available in new categories of spend as people turn away from traditional forms of credit, we do not see Afterpay becoming available for adult services and firearms in the foreseeable future. ”
Calls for change
Industry-type discrimination has been a key theme of submissions to the current Banking Code Review, which is due to report back next month.
Sex Work Law Reform Victoria wants the Banking Code of Practice to provide protections for small businesses.
“We want the banking code of practice to specifically reference, small businesses, needing to gain access to banking services. That will protect not just sex workers, but all industries that face the debanking [financial discrimination] problem,” said Mr Roberts, from Sex Work Law Reform Victoria.
“We’re also calling on the Australian Banking Association to work with its member banks to accept the sex industry has been legalised and decriminalized in most parts of Australia, and treated as a normal industry or normal business.”
Ms Carnell said state-based anti-discrimination laws could also be strengthened, and banking could be legislated as an essential service.
“Because you can’t operate your business without a basic banking service. We can’t operate inside the legal system without a standard banking service,” Ms Carnell said.
The Australian Banking Association declined to be interviewed but in a statement said banks were “obliged under a range of legislation to identify and mitigate against a variety of risks.”
“There may be occasions where individual banks choose to limit their exposure to certain industries as part of their risk mitigation strategy,” a spokesman said.
A spokesman for NAB said its policy decisions were not moral decisions.
“We have the right to determine risk appetite for business lending (and the provision of other banking services), to ensure it complies with regulation, maintains profitability and ensures staff safety.”