Banks: people love to hate them

THERE are four big banks in Australia – Commonwealth, Westpac, National Australia and ANZ – which bitch right through the year about the rising costs of operating and then report stunning profits. It is the same year after year, no matter if there is a global meltdown or not.

The banks put it down to skillful management. I put it down to gouging.

Given the manner in which these banks rort customers by imposing fees for anything and everything, they are understandably not the most popular businesses in town. But I often wonder why the people do not react by taking their business elsewhere.

It is not as though these four banks are the only ones in town. There are plenty of other, smaller players who offer better terms and conditions, charge half as much or even less, and do not treat their customers as cash cows. One has to exercise one’s choice and switch banks.

This is easier said than done. When one has regular payments being debited to one’s bank account, it is difficult to pick the right time to switch. A single payment cannot be missed and the more such direct debits one has, the more difficult moving from one bank to another becomes.

My personal experience is that it is possible to move, once the move is carefully planned. All one needs is a good reason to move – minor irritants are often not enough to motivate one to take the trouble to organise a move.

The first time I moved, it was from the ANZ to Westpac. I opened an account with ANZ as soon as I landed in Australia simply because it was the one name with which I was familiar. ANZ used to operate in India, Sri Lanka and the United Arab Emirates under the name Grindlays.

I stayed with them less than a year. The day I opened my account, I was asked for my tax file number. I didn’t have one at the time. Later when I obtained one, I did not bother to give it to the bank. The bank did not ask me for it either.

But one day I found that 92 dollars had been deducted from my account; on calling the bank I was told that it was because I had not given them by tax file number. On asking why they had not requested it, I was told ” it is not our role to remind you of government policy.”

That was enough for me. Two days later I closed the account and took my business to Westpac – once again convenience played a role, it was the one bank closes to my home. I overlooked the fact that I paying 20 dollars or a little more every month as fees and charges as the bank had combined my savings and cheque accounts in one. This was the advice they gave me – it was geared towards making money for them, not saving me from paying these charges every month. I even overlooked the fact that on one occasion when I went to make a withdrawal dressed in track pants, the bank asked me for identification; I had gone there in a suit the previous day and not been asked to identify myself.

The years went by and the number of direct debits grew. But again there was a seminal event which jolted me out of my complacency. In the year 2000, I asked the bank for a car loan and it was sanctioned over the phone. I was asked to come and pick up a cheque for the amount on a designated day in the year 2000. The amount was small, just $13,000. The interest rate was around nine percent.

When I went to the bank, they gave me some papers to sign and I noticed that the interest rate was considerably more; I then noticed that the money was being advanced as a personal loan. When I inquired why, I was told that one had to borrow a minimum of $20,000 for a car loan; lesser amounts were issued as personal loans. This was not what i had been told when I negotiated the loan on the phone. I had not asked the phone banking person for her name; when I was asked who had sanctioned the loan, I had no reply.

Given that I had committed to pick up the car that day, I had no choice but to take the loan on the terms that Westpac tricked me into accepting.

That ripoff was what made me move to a smaller bank. I paid off the loan, cursing Westpac every time I had to go to the bank. I planned the move carefully so that no direct debits would be missed and took my business to Bendigo Bank. The process was painful but I was determined to move. I got the right advice about accounts – keep a cheque account and a savings account separate.

Since then, rarely have I paid the bank any charges. The online service works well and the bank serves my needs. But I’m in this position because I was prepared to make the effort to move.

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