Banks, Bankers, Regulators and Your Money
They are in your face, ears and eyes. They control your life. They dictate what you can afford. They are your enslavers. Today, banks seem to control all the pieces on the chessboard that life has become. Talk of corruption, bribery, financial deals, price-fixing… all the funds given or received must be channelled through some banks at some point. That’s why we were not really surprised when 92.3% of the initial emails we received after we announced the uSpiked Global Greed Series ([email protected]) turned out to be about banks. Unfortunately, consumers and taxpayers around the globe are stuck with them. Banks are the lubricants that sooth the wheels of global greed…
A dear friend, not so long ago, broached the question, ‘What’s wrong with people?’ That refocused my viewfinder. While you might opt to replace ‘people’ in the question with ‘world’, it became obvious to me that there is nothing wrong with the world, just with those living in it.
When we introduced the uSpiked Global Greed Series with the Designed Re-Deferred, we promised more on the disgrace that the WDC2014 has turned out to be – the cash cow for the former Nat operatives who are now creeping back into our lives – and that is a promise we are still going to keep. However, for now it has become impossible to ignore the root of financial crimes – the banks and the pseudo-financial institutions and schemes which have enabled such greed to flourish.
I miss the old days. As a small boy in the 1970s all I had to do was to get myself to school and expect to find a meal whenever I returned home. Over weekends and during school holidays I went to church and worked the farm for our food crops. That was also the period in which I first got to know about banks and bankers. I would call it my 70s nostalgic period in respect of bankers. Fortunately, though, I never wished to be a banker when I grew up, however much I admired the neckties and black jacket.
My father, now retired, was a teacher, employed by a governmental Commission. He worked five days a week of every year apart from the school holidays, but in reality he was a teacher every single day. He was the village authority to whom everyone appealed for advice on education-related matters. But one person who occasionally visited him over the weekends and school holidays without seeking anything in return was the local bank manager of our small town branch. I vividly remember his Landrover 109 branded with the colours of the bank. He would sit down and talk for hours with my father on issues pertaining to his finances and his meagre bank account.
[To my father, whom I know accesses this Platform, I cannot recall ever telling you this, but you were, and still are, the best teacher I ever had. Thank you for everything including those painful punishments.]
At no point during these visits did Mr. Bank Manager (there were actually several over the period) entice my father to take a bank loan. In fact, they often guided him on how to avoid borrowing from the bank. Those are the old bankers that I miss. To them, being a banker was more than just a job, it was a calling.
Fast forward to 2014: a friend was recently convinced by her bank to consider opening cellphone-banking accounts for her factory workers. “It’s very simple Madam, they won’t have to pay a cent. Their salaries would be sent directly to their cellphones… no hefty bank charges…” [Yeah, they know that their greedily-high charges are deterring many people from using their services]. So my friend asked what she had to do. “No problem, we will send consultants to talk to your staff and sign them up for the service.” Nowadays of course they are all ‘consultants’, not just bank clerks.
The ‘consultants’ arrived promptly as arranged. The factory operations were interrupted for this ‘wonderful service to be introduced to the staff’. My friend the factory owner felt she didn’t have to be involved at this point, so she continued with her own tasks of the day.
After some time she realised that the introduction of a supposedly easy and cheap service offered by her bank was actually eating into the second hour of her factory time – for which of course she was still going to pay. She decided to check what was happening – had all her workers been kidnapped or poached by her competitors disguised as bankers? To her dismay, she found that the ‘consultants’ were doing considerably more than introducing cellphone banking to her staff – they were selling them various insurance policies. It was a value-added service, they claimed. My friend, knowing quite well the difference between banking and insurance services, sent the ‘consultants’ packing without further delay.
Bankers have become little more than glorified salespersons, who sell us their products under some non-negotiable terms and conditions. They never pay us a visit unless there is something in it for them – them, the consultants and their bosses in the corner offices. Yes, those ones wearing the designer suits.
As our data system crunches the large numbers of submissions that have been flowing in since we announced the Global Greed Series, it is clear that hundreds of consumers have found themselves stuck and unable to operate free of the clutches of various financial institutions. Bankers have become a law unto themselves: from unauthorised debits, reckless lending, overnight inter-bank lending and borrowing, delayed remittance of EFTs, facilitation of fraud and cheque kitting to arbitrary blacklisting of those conscientious clients who are relentless in demanding accountability of their every cent.
Within the last two weeks, the list of complaints we have received highlighting atrocities being committed against consumers by banks and bankers has grown to a level we would never have expected.
Let’s take the case of African Bank Investments Ltd: the bank that briefly shook the country’s financial institutions and forced the Reserve Bank Governor to step in and place it under curatorship – using what we would call the Governor’s Wand or Broom Stick. Most references in the media to the crap the micro-lender and its executives had been up to were concealed under the acronym ABIL. Somebody at the Financial Services Board must have been asleep or decided to look the other way. My suspicion, however, is that they were too deeply involved in the scheme themselves to do anything about it.
The troubled micro-lender appears to have been caught out as far back as October 2012, when the National Credit Regulator commenced investigations into possible reckless lending. This culminated in the NCR seeking a R300 million fine and a year’s suspension for the violation of the National Credit Act. There was no talk of jail terms for the executives involved, and the claims were settled for a mere R20 million… which is about 6.7% of the initially-levied fine. That is hardly short of a ‘pat on the back’ for a job not-so-well done.
Banks, it appears, create their own rules within which they play. The problem is that they often play with clients’ money, not their own. As the Series continues, we will reveal how the banks’ glorified salespersons make hefty commissions through experimenting with untested schemes on their clients’ funds. Whatever the investment opportunity to which a banker introduces you, the only entity that will never lose is the bank. With the ABIL debacle, those bank clients whose moneys had been invested in the company definitely lost out.
If the banks and the bankers cannot corrupt the legally-established regulatory frameworks, they just invent their own and we have to live with the consequences. When the National Credit Act came into effect, banks decided to register their own under-the-radar credit bureau – the South African Fraud Prevention Services (SAFPS), an entity that they have used selectively to financially decapitate businesses and individuals of their own choosing. As Nav Chan could confirm, you can be completely ruined due to a listing by this banks’-funded organisation.
Conspicuously missing from the SAFPS listing are those construction and food companies and their respective executives who have been found guilty and fined for price-fixing in the recent past. This takes us back to the 1945 writings of George Orwell: in the financial farm, though all animals should be equal, “some animals are more equal than others…” So if you want to be more equal, start your own bank.