Banking ‘bullies’ leave vulnerable people open to scams
Big banks have been accused of abandoning rural communities and leaving customers at risk of scams. Photo: TND
The major banks are “bullies” who are abandoning rural communities and leaving vulnerable customers at risk of financial scams, a Senate inquiry has been told.
Nearly 800 bank branches have closed in regional and rural Australia since June 2017, according to the latest data from the Australian Prudential Regulation Authority (APRA).
A long-running inquiry is examining the effect of closures on rural towns and considering possible mandates to keep a minimum number of country branches open.
When a bank shuts, customers are usually directed to the local post office for limited financial and cash services offered through Bank@Post.
Australia Post has told the inquiry there are about 1150 rural communities with post offices, but no banks.
The LPO group, which represents post office licensees, is pushing for the establishment of a government-backed postal bank using Australia Post’s vast regional network.
Co-chair Scott Etherington said three of the four major banks pay Australia Post for transactions, but post offices have to manage customer’s banking enquiries for free.
“How much longer should our members continue subsidising the banks?” Mr Etherington told the inquiry.
“These bankers are not clever businessmen. They’re bullies.”
Elderly rural customers rely on face-to-face banking at post offices, often in fear of being caught up in scams or losing money, Mr Etherington said.
“These customers, they’re terrified of having to do things digitally.
“These people don’t have enormous resources and they count every cent and every dollar.
“They can’t afford for $5 or $10 or $1000, heaven forbid, to go astray because they hit the wrong button on their phone or hit the wrong thing on their web browser.”
The banks broadly point to the rapid uptake of digital banking to justify closures.
The National Farmers’ Federation said online banking gave producers more options to manage their finances, but mobile connectivity was not always reliable.
The closure of rural branches meant farmers had lost valued relationships with local managers, who understood the nuances of their loans and businesses.
“Ultimately we want the regions to be a great place to live,” the federation’s policy officer Charlotte Wundersitz said.
“Chipping away at essential services in the communities impacts the livability and the desire of more people to move into those regional areas, which then has implications for agriculture.”
APRA data presented to the inquiry showed the number of banks in regional and rural areas had reduced by 34 per cent in the last six years, along with 39 per cent in the cities.
The number of ATMs provided by banks dropped by 50 per cent in the country and 62 per cent in metropolitan areas.
Authority board member Therese McCarthy Hockey acknowledged the data didn’t reflect the number of branches that has reduced their operating hours.
While there were errors in data in the past, Ms McCarthy Hockey said there was no doubt about an ongoing reduction in bank branches across Australia.
“The trend it clear – it’s downward,” she said.
The inquiry is due to hand down its final report next May.