Big banks score small for people struggling with debt

10th September, 2012No Comments

Financial stress is not a nice situation to be in and according to the ‘Rank the Bank’ survey, struggling Aussies can not expect to find much help from their banks.

The survey conducted by the Financial and Consumer Rights Council (FCRC), assessed the opinion of more than 100 financial counsellors on how banking institutions dealt with customers who were struggling to make repayments.

Commonwealth Bank, Westpac, ANZ and National Australia Bank were all given a score out of 10 in regards to their quality of communication, customer satisfaction, processes and attitudes toward clients in financial distress.

Commonwealth Bank received the worst rating of 4.27 while Westpac followed closely with 4.75. ANZ scored slightly better with a 5.06 and National Australia Bank posted a slightly more respectable score of 6.39.

While Commonwealth and Westpac ‘failed’ overall in their response to people in financial difficulty, both banks have recently made changes to how they respond to their customers’ financial hardship. Those changes should reflect an improvement in next years ‘Rank the Bank’ survey.

“The way the banks respond to their customers struggling to make repayments can often make or break a family’s path to financial recovery,” FCRC executive officer Peter Gartlan said.

Debt Rescue, said the banks had a lot to answer for not being forthcoming with hardship provisions when customers find financial difficulty.

“They are obliged by law to offer clients certain provisions to meet their obligations where their circumstances change from the time they initially took out the loan, or credit card,’’ Miss Bright said

“However, time and time again, they are either silent or totally inflexible. They seem like they have one objective only which is to get a repayment from the client regardless of individual circumstances even if it means sending them bankrupt.

Miss Bright said the banks processes and attitudes feel people leaving daunted, isolated, misunderstood and hopeless.

“In the rare cases when clients formally applied for hardship with banks, they were often refused because the application was so daunting and complicated that it couldn’t be filled out properly,’’ she said.

“Another barrier is dealing with off-shore call centres which can increase feelings of abandonment and isolation for people at a time when they really need to be heard, understood and feel like someone actually cares.”

Debt Rescue said it was helping a growing number of Australians who were getting a rough deal from the banks.

Solutions offered include resubmitting hardship applications in more favourable terms and employing individual strategies to overcome financial difficulties, reduce stress and meet debt obligations.

In some cases we will lodge a complaint with the Credit Ombudsman Service, providing the client with protection from further collection action until the situation is investigated,” Miss Bright said.

Anybody experiencing problems with debt can contact Debt Rescue toll free on:  1800 00 3328. For further information visit  www.debtrescue.com.au.