Banks not hot for adult businesses

PIC: Bigstock

In a not so sexy discovery, adult business owners are being denied financial services by some banks.

The Australian Small Business and Family Enterprise Ombudsman said banks are discriminating against the legitimate adult industry by withdrawing or failing to provide financial services.

“It’s a bit rich for the banks to decide which industries are moral and which aren’t,” Ombudsman Kate Carnell said. 

The recent Eros Association report, Financial Discrimination Against Adults-Only Businesses, found the vast majority of industry participants experienced discrimination while applying for financial services.

In a survey conducted by the leading adult industry body one business owner said they've experienced discrimination from banks, and there appeared to be little method to the exclusion.

"Happens all the time! There is just no rhyme or reason to it.. I’ve got more than one store and for some stores I’m approved and for others I’m rejected – even with the same bank!" the store owner wrote in a survey response.

Ms Carnell said an estimated 25,000 people are employed in the adult industry, which has an annual turnover of $2.6 billion. 

She added the banks’ actions were undermining efforts to combat the black economy, and accessing banking services was essential for any legitimate business to operate. 

"It’s hypocritical that banks do not provide services to the adult industry when businesses are appropriately registered and regulated," she said. 

A local adult-only shop said they have not been subject to any discrimination from banks. 

One operator had merchant facilities withdrawn after more than 20 years with the same financial institution.

The report prepared by Policy and Campaigns Advisor Jarryd Bartle found the practice of excluding adults-only goods and services by industry type appears influenced by broad brush assumptions about the industry, many of which are outdated.

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