Tuesday, September 14, 2010

A Bank Is Not Just Any Business

The Sydney Morning Herald today revealed that at least two of our big banks have been accused of harassing their own customers over outstanding debts. The ANZ and the NAB have been accused of threatening legal action against customers who have already entered into arrangements to make payments, seizing the savings of customers to repay debts without regard to their living expenses, demanding that a customer forfeit half of her Centrelink payments, and in one case initiating action against the wrong customer because she had a similar name to a debtor.

Of course, any business which is owed money is entitled to take steps to pursue repayment, but a bank is not just any business. No other business is in a position where they are both selling us their services and also holding our savings at the same time. No other business is in such a position to impose its will upon our lives, regardless of whether or not their claim is valid. No other business holds us so completely captive as do the banks. We have no choice but to be bank customers in this age of electronic payments for everything. So it should be incumbent upon the banks to not only treat us fairly, but to recognise their social responsibility.

When things go wrong, and customers cannot meet their obligations to repay a mortgage or a loan, or a credit card bill, there are supposed to be provisions for dealing with the problem. If somebody simply refuses to pay then of course steps must be taken to recover the money. But in cases of hardship, it is essential that banks act responsibly to help the customer through the period of hardship, and hopefully back onto a sound footing. That’s just not going to happen if over zealous debt collectors are launching legal action, seizing savings, and ignoring genuine efforts to resolve the difficulty. In the long run, it is not only in the interests of the customer, but it’s also in the best interests of the bank.

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