13 March 2013
The announcement of a class-action against New Zealand banks has caused a big stir and some excitement, and has ignited some reaction from our Pacific people; the same kind of excitement and reaction generated by the other Banks back in November 2011, although that was over a cup of tea at Epsom.
The excitement around the banks this time, has to do with the hefty profits the banks generate from charging their customers extra fees for services rendered. I have been one of the greatest critics of banks over the last few years, especially over the huge amount of profits they make, and the additional fees charged for operating an account with them. Most of my fees range between a dollar to fifteen dollars a month, and it adds up over the years. The extra fees, according to the banks, is for services rendered to keep accounts functioning when it detracts from their normal settings. In other words, the extra fees pay for serving us when we manually deposit or withdraw our money over the counter, it’s for overdrawing on accounts or what the banks conveniently call creating an unarranged overdraft transaction, it’s for dishonoured cheques, and for using other banks’ ATM (Automatic Teller Machines), just to name a few. But, the amount of profit the banks make each year, does not justify charging additional fees.
Last year (2012), the so called ‘big four’ Australian Banks in New Zealand, made what some commentators described as ‘super profits’. For instance, ANZ Bank made a record $1.27 billion, a 17 per cent increase from the previous year; BNZ Bank made $741 million, a 21 per cent increase from 2011; WESTPAC Bank made a profit of $707 million, up 22 per cent on its previous year margin; and ASB Bank made a record-breaking $685 million profit, a 21 per cent increase. These profits were made during the time when families were feeling the pinch with unemployment, poverty, high cost of living, poor health system, and lack of housing.
In fact, many of the banks laid off staff in favour of developing automated banking, to keep their profit margins high; it was reported that ANZ Bank alone reduced their staff by 300 workers; the human price of self-indulgence. When we look at the overall economic situations, the profits being made, and the extra fees charged by banks don’t add up; the word ‘excessive’ and ‘greed’ do come to mind.
The banks have tried to justify the profits being made as a way of making sure there is finance available for lending to help the economy, but still the size of the profits are unforgivable. The co-leader of the Greens, Dr Russell Norman, suggested that the banks have “insulated themselves because of their dominant position in the market at the expense of everyone else,” and I agree. Surely even without charging the extra fees for their services, the banks will still make ‘super’ profits.
New Zealand’s First Union representative, Andrew Cassidy, agreed the profits were extreme and believes the banks “are milking the system.” What makes it hard for us middle-of-the-mill-just-getting-by bank customers, is the fact that these ‘big four’ profit-making banks are all Australian owned. I have nothing against the Aussies, but I am against the way they charge their customers phenomenal fees, and their profits going off-shore to benefit the Aussie economy at our expense. And yet, the tax they pay our government is only a drop in the ocean compared to the profits they make.
When we consider all of these facts, then we can understand why there is a call, now, for New Zealanders to register and be part of the class-action lawsuit against the banks to claim back what the lawsuit call “excessive default fees” charged over the years. The claim would probably be dragged out over two to three years, and in that time the banks will continue to charge fees; but the impact it will have on our savings accounts, especially for our Pacific people, will be huge.
I was amongst the usual pockets of discussions at Otahuhu, and there was agreement to support the class-action lawsuit. Many Pacific people believe they are definitely victims of the bank fees, but they just took it as legal charges for the poor management of their money on their part.
Meanwhile, over a cup of tea at the Mangere Shopping Centre, Pacific people spoke about their lack of skills to use the new automated and online services the banks provide. Many still go through a teller to deposit and withdraw money and pay their bills because they lack a computer and an internet, and even worse, lack the know-how to bank online. Others in the discussion group complained that the banks deliberately make things harder for Pacific people, by providing technology Pacific people have no or little knowledge of to justify charging fees for services rendered over the counter.
The feeling among Pacific people is that the banks are, firstly, siphoning whatever little money they can spare from their accounts through fees, and secondly, by having less personal contact with staff, more people are laid off in favour of more expensive micro-chipped innovation paid for by customers’ money invested with the banks.
In my friend Muti’s own simple Pacific lingo, he explained that the banks charge us fees and use our money to obtain technology to provide less jobs for us, so they can make money for themselves. My friend Muti has a bone to pick with the banks. I also have a dislike for the way new technologies has taken the personal touch out of banking. I go down to my local bank at St Luke, and I get very annoyed with bank staff, with their fancy i-Pads (paid for by excessive fees), trying to get me to bank through online internet banking or use their ‘bag’ system to reduce the numbers in the queue; the long queues is bad for business. I just wish the staff with their fancy i-Pads take up a station and help shorten the waiting time in the queue. It’s annoying when I try to explain that I needed to bank money now so that I can use it immediately, and still they try to convince me otherwise.
I have tried the ‘bag’ system to save time waiting in the queue, paying extra fees, and I have to wait for my money to go into my account the next day. So I am back on the queue, and willing to pay the extra fees. But it does not matter, as I still get charged fees for other misdemeanours on my account.
Since the announcement of the class-action against the banks, I have checked my annual fees with my banks and it comes to about a $150 a year; and I have two accounts. I get double whammed.
So, I am urging our Pacific people, not only to vent their frustration vocally, but to do something about it and register for the class-action against the banks. Many Pacific peoples’ accounts are always overdrawn, and the overdraft gets bigger and bigger with continuous using of the manual over-the-counter system and the excessive fees charged for it by the banks. The class-action will take years but a positive outcome would save us hundreds of dollars annually in fees; and that’s a lot of “cups of tea”, not on John, but on banks.
An end result that would be far better than being taken to the cleaners without hope of recovering any loses, if we bank on SkyCity casinos. The casinos are like the banks in the way they operate; they seem to help by announcing elaborate schemes to monitor, detect, and punish gambling addicts, and yet away from public eye, casinos play Russian roulette with addicts’ financial obsession – it’s like charging extra fees. Not very good PR for SkyCity and John Key when front page headlines such as “Banned pokie addict became SkyCity VIP” (New Zealand Herald – Tuesday 12th) emerges at a critical time as they rally support for their ‘scratch my back and I’ll scratch yours’ covenant that will give SkyCity more gaming machines and the government a multi-million dollar conference centre.
The chief executive of Problem Gambling Foundation is spot on the mark when he pointed to SkyCity regulating itself as the problem. The idea that gamblers are enticed to spend more in order to gain VIP status is not an idea geared towards lessening problem gamblers. According to the Herald, SkyCity seemed to have made it easier for gamblers to become VIP members; for me, it’s morally a disgrace. The reported case isjust one of many problem gamblers who have told similar stories to highlight a culture within SkyCity. It’s a culture that has, and will plague Pacific people for years; and from what I have personally observed at SkyCity, there is a large population of Pacific people addicted to the pokies. And these are leaders of our Pacific Islands’ communities, churches, and families.
I have observed fathers, mothers, the old as well as young adults, people I know who are struggling to make ends meet, people who blame the system and the church for making them poor; I have seen them praying over pokie machines. There is a mentality among some Pacific people that God will provide and help them win big at casinos, because God can see they are struggling; but, gambling is not faith, it is luck, and God does not deal with intangible luck, he deals only in concrete faith. And no amount of prayer will bring luck to people who pray and do the sign of the cross over gambling machines; even Jesus did not pray about luck but about things which are certainities.
And, I know people whose prayers have not been answered who scrape to find a scapegoat to blame for their losses, and that scapegoat is usually the church. I have visited the court house at Manukau City, and the number of Pacific people appearing for debt related offences who blame the church for their demise is huge, and yet you hear in the summary of facts their addiction for the pokies.
Oscar Kightley and his Naked Samoans depict with humour in their hit cartoon comedy Bro’ Town the effect of gambling on church going Pacific people in the character of Agnes Tapili and her church group, and that of Pepelo Pepelo. And the truth has never been so well illustrated; because it reflects how some people treat gambling as humourous and refuse to see the serious and ugly side of it, and that is why, in Bro’ Town, such a serious problem is brought home with such realism. There are no excuses for gambling, especially when families are struggling to make ends meet.
I know people, personally, who have had their lives destroyed by their addiction to pokie machines; but sadly, by the time they admit their addiction, they have lost everything that had any value and meaning in their lives. One may recover their sense of freedom after kicking the habit, but no one can ever recover fully all they have lost – casinos are never a worthwhile cup of tea.
And with that, have your ears on the wall, and continue to seek the peace and prosperity of this country to which God has given us to dwell. Pray to the Lord for it, because if it prospers, you too will prosper…Soifua