The ethical divide


…or, as we locals know it, the Tasman Sea, that large wild body of water that separates Australia from New Zealand. The big blue thing that keeps everything known to mankind that can kill you in Australia, and keeps New Zealand clean and green…

…except for banking where the process is reversed and the bad practices now being exposed by Rebecca Orr and the Australian Banking Royal Commission propagate across the Tasman into our fair land… Conversely, it would seem that remedial action, however slow, in Australia, doesn’t swim…

These principles are from ANZ’s 2017 Corporate Sustainability Review. It is largely focussed on ANZ operations in Australia but its scope includes ANZ New Zealand. Sadly, as you can see below, such initiatives by ANZ seem to be only limited to ANZ Australia – where is ANZ New Zealand’s Customer Fairness Advisor?

The former Australian Commonwealth Ombudsman, Colin Neave, was appointed as ANZ’s Customer Fairness Advisor. The Customer Fairness Advisor role is focussed on minimising reputational risk, and the risk of regulatory intervention, which may arise from:

• the retention or development of products which have an unfair impact on our retail and small business customers;

• shortcomings in the way in which we manage customers in financial difficulty and assess suitability for lending; and

• broader stakeholder concerns about the culture and values of large financial institutions.

During the year, Colin Neave developed customer remediation principles to assure our customers that ANZ will acknowledge and compensate for any failures quickly

ANZ corporate sustainability review 2017 p21

It’s not that bold a statement to suggest that ANZ New Zealand’s only awareness of the concept of reputational risk comes from the highly-critical Financial Markets Authority and Reserve Bank’s reports last month on banks’ culture and conduct in New Zealand. They are both worth a read: Culture and Conduct and Bank Incentive Structures.

ANZ New Zealand is:

  • a bank that loaned vast amounts to a borrower recovering from a serious head injury; 
  • a bank that failed to determine if the loans were repayable. When I first found out about them in 2013, the accrued debt was just over $400k, with a company that had assets scarcely half that amount.
  • a bank that failed to to disclose this lending to me as the guarantor of that lending, even though by every standard of conduct, it should have.
  • a bank that, when challenged about this debt, lied about being authorised to disclose this information to me as the guarantor.
  • a bank that continued to lie by claiming that the Credit Contracts and Consumer Finance Act prevented that disclosure to me.
  • a bank that kept on lying when it made up information from the Code of Banking Practice to support its argument that disclosure obligations for guarantees and security are different. (they may be for some banks but for ANZ, by its own definitions, guarantees are part of security.)
  • a bank that, even when we said we could beat the sole tender offer and when there was other interest in the property, still accepted that single low tender offer.

So…ANZ New Zealand, where is your Customer Fairness Advisor? God knows you need one (at least)…

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