OPINION: Dani * had a gambling problem. He asked his bank to stop borrowing and later applied for a credit card.
Primarily, Dani wrote to his bank asking if they could block his access to personal credit services due to personal circumstances. Having just paid off a loan, he didn’t want to go into debt again. Having just paid off a loan, he didn’t want to go into debt again. The bank replied that his request had been noted and the home lending team had been notified.
Three months later, Dani applied for a credit card online (with a limit of $ 12,500), which the bank approved the same day.
Dani’s complaint to the Banking Ombudsman Scheme was one of 1,600 complaints about bank loans we received this fiscal year. Many complainants find themselves caught in a cycle of persistent debt. They tell us that they have more bank debt – and most importantly, fees on that debt – than they can afford.
In investigating complaints, we must be fair and consider the law, relevant codes and principles of good banking practice in the context of today’s banking customer expectations. This gives us some leeway to deviate from a strict legal approach when examining a complaint. According to the Code of Banking Practice, banks must communicate clearly and effectively and treat customers fairly and sensibly. Some customers need additional assistance and today there is a clear expectation for banks to respond to that need.
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In Dani’s case, we found that the bank fell short in terms of both communication and customer care. There was a clear distinction between Dani’s direct request for a personal credit pad and the ease with which his credit card application was made. The left hand did not speak to the right. The bank reimbursed all interest on Dani’s credit card (approximately $ 1000) and paid an additional $ 500 compensation for inconvenience.
Under the findings of the Australian Royal Commission on misconduct in the banking, pension and financial services industries, banks have been mandated to improve customer results and provide greater support to those in need. New Zealand’s subsequent Banking behavior and culture review Recommended by the Financial Markets Authority and Reserve Bank that all banks have policies and processes in place to assist clients with vulnerabilities. By the time Covid-19 took over the world, banks were ready to step up and provide additional support to customers suffering from financial stress and difficulties.
While there are many examples of greater dedication to customer care, some customers still fall through the cracks. Banks are large institutions that operate in an increasingly digital world. It is not easy to ensure that all customers with vulnerabilities are responded to with the appropriate level of support. Cases like Dani’s, however, seem pretty clear.
A gambling addiction would of course fit under at least one of the “vulnerability drivers” in the recently released version Framework for Consumer Vulnerability by the Council of Financial Regulators. Health and physical factors, life events, resilience, and ability issues are the specified drivers that banks must watch out for and respond to.
It is important that the framework does not mark a static group of people as vulnerable. Rather, it is recognized that anyone can be affected by these circumstances at any time and are therefore more susceptible to financial damage.
Regarding the financial damage caused by gambling, we are pleased that banks are putting in place mechanisms to better serve customers. Some banks are partnering with anti-gambling support organizations, others are introducing opt-in gambling blocks for customer credit cards, and some Australian banks have even banned the use of their credit cards for gambling.
We look forward to further improvements in the broader area of ââcustomer care and financial inclusion, especially given the new financial behavior. If a customer is at the door and asks for additional help directly and the bank agrees, they shouldn’t fall through the cracks.
* Not his real name