UPDATE: A shocking new report has unveiled rampant aggression and abuse faced by homeowners and insurance staff following the collapse of major builder Porter Davis in March 2023. The Victorian Ombudsman, Marlo Baragwanath, presented this urgent finding to the Victorian Parliament on Wednesday, exposing a troubling culture within the Victorian Managed Insurance Authority (VMIA).
The collapse of Porter Davis, the largest builder insolvency in Victorian history, has left over 1,700 homeowners in a state of uncertainty. As the authority manages the domestic builder insurance scheme—providing coverage for incomplete or defective work—its handling of claims has drawn severe criticism, particularly as demand surged after the collapse.
The report reveals that while most homeowners experienced timely processing, those who faced delays endured significant personal and financial distress. One homeowner described their ordeal as a “double catastrophe,” highlighting the severe emotional toll of the situation.
Baragwanath stated, “The combined stressors of an intense workload, high expectations, and difficult behavior from some homeowners impacted the attitude that some VMIA staff had toward homeowners.” This sentiment was echoed by Jess Wilson, Opposition Leader, who denounced the authority’s culture of “bullying people into submission.”
Alarming evidence from internal communications surfaced, revealing staff using profanity and dismissive language towards distressed homeowners. One message stated, “im on fire today, called a C*** owner at 8.15 this morning, put her in her place,” while another employee expressed hatred for clients, saying, “hate them all.”
In response to the report, Danny Pearson, Finance Minister, has publicly apologized on behalf of the government, asserting that the language used by staff was “unacceptable.” He has reached out to the authority’s chief executive to address these serious concerns.
The report also acknowledges the threats and abusive communications that VMIA staff received from frustrated homeowners. Employees reported instances of “digital stalking” as clients sought to locate them on social media. The authority, which no longer oversees the scheme following the establishment of Victoria’s Building and Plumbing Commission, admitted that it “was not perfect” in its claims processing.
To mitigate future issues, the Ombudsman made nine recommendations focusing on enhancing communication, improving processes, and increasing transparency. The authority accepted all recommendations in principle but acknowledged its challenges during the crisis.
In a critical note, the report revealed that about 560 clients of Porter Davis were not covered under the state scheme, despite having made payments to the builder before its collapse. This situation prompted the Victorian government to initiate a $15 million rescue package and implement new laws to penalize builders for failing to secure domestic building insurance.
As the fallout from the Porter Davis collapse continues to unfold, the implications for homeowners and the insurance sector are profound. The urgency of reform and accountability is clear, and the public will be watching closely as these developments progress.
Stay tuned for further updates on this evolving situation.
