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

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". 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.

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. 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. 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.

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

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Another business, an adult wholesaler — who was also a loyal bank customer for 20 years — said his merchant services were suddenly disconnected. Another adult retail owner surveyed by Eros was upfront in disclosing to the bank that it sold "toys, magazines, costumers, lingerie".

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