A long-established Canberra bar and brothel has had its merchant services refused by the Commonwealth Bank in a move which the owner has described as discriminatory, although the bank denied it had a "blanket rule with regard to the adult industry".
Langtrees in Mitchell has been operating in Canberra for eight years, and for over 30 years since originally established in the ACT. The premises is now part of a national chain which also operates in Kalgoorlie, Darwin and Perth.
CBA's notice to Langtrees follows a stance taken by the National Australia Bank in which it has progressively closed down accounts for escort agencies and brothels to "meet legislative requirements under the anti-money laundering and modern slavery laws".
Aaron Jones, the managing director, said he was surprised and alarmed when he received the CBA termination notice.
After being "shunted around" various banking areas, he was finally contacted by a relationship manager for the bank and advised that Langtrees' merchant services, including EFTPOS facilities, would be cancelled.
Mr Jones said he was told that CBA "no longer has an appetite for providing services to the adult industry".
The bank told Mr Jones that under the arrangement, either party could terminate the banking agreement at any time but would not provide Mr Jones with any correspondence to confirm as to why it had withdrawn the service, and this has significantly curtailed his option of registering an official complaint with the ACT Ombudsman office or Human Rights Commission.
Mr Jones said the bank's action would have a significant effect on the operation of his business.
"We are a legitimate and transparent business, we have a very good working relationship with the ACT government, the compliance officers, ACT police, and exceed all the regulatory standards and requirements," Mr Jones said.
"We've got nothing to hide.
"It's really disheartening when this happens because we're a registered small business like any other. My mum does my bookkeeping and my dad does a bit of maintenance work around the place.
"The irony is the bank says that it is worried about money laundering and that brothels are bad.
"Well, hang on; if money from the business is being processed through the merchant services and I pay tax on it, how is that illegitimate? Surely using a merchant service provides that transparency which the banks and the tax office require.
"If the bank withdraws my machines, I then only have one of two options: to lie to them about my business and set up a holding company, which is not what I'm about, or be only able to accept cash, which brings its own set of issues."
In the ACT it is against the law to discriminate because of profession, trade, occupation or calling.
In a statement, the Commonwealth Bank said it "treats every customer on a case-by-case basis and we incorporate environmental, social and governance considerations into our lending and business decisions".
"Our board-approved risk appetite statement underpins all of the activities we undertake," the statement said.
