Thursday, June 3, 2010

Not Happy, Barbara!

Well it’s always fun to have a go at bashing the banks. After all, they seem to do everything they can to make it so tempting. Any hint of a bank actually making money and there are sensational headlines about banks gouging customers to produce super profits. The Sydney Morning Herald today leveled the gouging allegation at the big four banks because the Herald had performed its own analysis of Reserve Bank figures and came up with the notion that banks have been increasing interest rate faster than the increases in their costs, thus inflating their own profits.

While there is no end to the fun we can have at the expense of the banks, really the joke, and the expense, is on us. The Herald calculates that fixed interest mortgage customers, personal borrowers, and business borrowers are all paying above the odds, contributing to the $14 odd billion combined profit of the big four. Oddly enough, the same analysis seems to indicate that customers with variable rate mortgages are actually getting a better deal, with bank profits actually falling for those particular loans.

The banks argue that any apparent increase in their interest rate margin reflects not only the higher costs confronting the banks, but also the increased risks associated with those loans. Personally, I am less concerned about up front interest rates which we can see and compare easily, allowing us to choose between banks, but more concerned with the labyrinth of fees and charges, many of which I feel are unjustified and excessive. I would be more concerned about standards of service, and the sometimes abrasive marketing tactics of the banks. It is those tactics which are lampooned in a television ad by one of the big four banks themselves.

You have probably seen the ads which feature a woman supposedly called Barbara who works for “a big bank”, telling a disgruntled customer that she doesn’t care about her complaint. It is rather funny, because we all realize there is a grain of truth within the parody. However, the Financial Services Union doesn’t think it’s funny at all. They claim that it denigrates not only the banking industry, but also bank employees who have no choice but to promote and defend the policies of the bank for whom they work. They do have a point. It’s not the fault of the customer service people that banks are sometimes annoying.

But the real irony here is that the advertisement is actually for one of the big four banks, which prompts thoughts of people in glass houses rather rashly throwing stones.

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