A new survey conducted by think tank, the Australian Institute, identified behavior by the Australian banks of pro-active, uninvited marketing to customers of loans and credit cards, irrespective of the consumer’s ability to repay the debt while continually boosting their own profits to be irresponsible.
Persons interviewed complained of receiving ongoing offers from their mortgage providers to refinance and gain access to further debt. These offers were unsolicited.
Over the same period, two out of three respondents reported receiving an unsolicited offer for a new credit card, one in two had received an unsolicited offer to increase their credit-card limit, and one in three had received an offer for a personal loan, according to the survey.
Many of the respondents to this survey were not working at the time of receiving these offers and could not afford the debt.
Most banks pursue profit at any cost even while demonstrating irresponsible actions. Bank employees in Australia are often paid commissions to sell their bank’s products. Consumers can no longer be confident that the advice they receive from bank workers is objective and suits their circumstances.”
The institute’s recommendations included legislation to ensure that interest rates charged by banks move in line with changes to the Reserve Bank cash rate, while being advertised as a mark-up over the official rate. Restrictions on sales targets and commissions for bank workers, banning pre-approvals of credit card offers or credit extensions, and a set of national laws to ensure the responsible provision of credit to consumers is also on the Australia Institute’s agenda.