In a keynote address to an Australia-Israel Chamber of Commerce luncheon last week, Ian Narev said it can be hard for customers with legitimate complaints to be heard by institutions, leading to an industry review of complaints processes.
There are, however, others whose complaints are unreasonable.
“It’s important to understand some fundamental truths about the banking business model. By the nature of what we do – extend credit, manage investments, provide insurance – it is an unfortunate but inescapable reality of our business model that we are going to have some troubled relations with customers,” Mr Narev said.
“In some cases, we have customers who feel dissatisfied because they are being unreasonable, and because they are acting improperly with the Commonwealth Bank, and because they hope they will embarrass us into settling in a way which no reasonable Australian would expect us to settle.”
Mr Narev also admitted that CBA has made mistakes, but has also moved to fix them, making the argument for a royal commission “baseless”.
“The fact that the position of the industry has been so strong, that we’re acknowledging and fixing mistakes and that we have such strong regulators makes the analogies with other circumstances in which royal commissions have been recommended baseless,” he said.
“The royal commission is bad policy: it’s not the right policy for an industry with this record, with this approach, and with this regulation.”
Mr Narev said a royal commission into the financial services industry will affect overseas investors’ view of the Australian banking system and, in turn, “one of the great sources of strength in the Australian economy”.
Well done Narev for publicly stating this. The recent 4 Corners report is a classic example of a small number of valid complaints mixed in with a larger number of emotional blackmail attempts from people who were underinsured.
If CBA and other insurers give in to blackmail via the media and the ambulance chasing law firms, it just encourages more people to do it. The Couper case was an unfortunate example where CBA gave in, and it has subsequently been touted as a “precedent” to inspire other insurance fraudsters.
And who pays for all this? Ultimately it’s the responsible, properly insured, honest policyholders who pay for it by way of increased premiums.
Scott – the key phrase here is ‘at face value’. Let’s look for a minute at the current media headlines surrounding Tony Greig, his widow, and his CommInsure policy. The case went to FOS, who at best are biased towards the client, and they declared she didn’t have a valid complaint against CBA. They suggested she pursue legal action, but she has gone straight to the court of public opinion via the copious amounts of media coverage. Is she hoping to embarrass the CBA into a payout? Certainly it’s a tactic which has worked on them before. To be honest, I’m relieved to finally see Narev come out and say something in defence of his organisation. Perhaps that way I won’t see ever escalating insurance premiums for my clients because of unnecessary payouts on invalid complaints.
I agree with his statement that not all complaints are valid. It would however be easier arguing this point if the opposite view could not point to what appear (at least at face value) to be very real and valid complaints. There is also the difference between legal and ethical — the Bank West documentation would have allowed CBA to call in any debts they wished whenever they wished, this does not however mean they should have.
I have seen situations where complaints have been made that have been written by another adviser using terms the client would never use and making comments that are completely untrue.
I’m not with a bank, nor am I defending what has gone on at the CBA, however encouraging someone to make a complaint without the knowledge of what went on at meetings and what was said by clients is one of many matters that will continue to hold us back.
It’s pretty easy to drag the whole industry down to make yourself look good, much harder to do your bit to ensure our journey to a profession continues.