Australian Banks Banking on Unemployed
Contrary to what we expect especially that Global financial crisis is all over the world, we didn’t see that Australian banks will step into a drastic measure of issuing debt especially for unemployed or people without specific source of income.
After Australia Institute surveyed more than a thousand people, people revealed some appalling news. The banking sector of Australia is now opting to share some debts or loan for people who are not capable in paying it off in return, thus pulling more customers into debt zone. The Institute’s deputy director Josh Fear says 66 per cent of those surveyed had recently been offered a new credit card.
And it was a surprised to him, as he said “We found that two out of every three survey respondents we spoke to reported receiving [an] unsolicited offer for a new credit card in the past 12 months, and that one in two had received an unsolicited offer to increase their credit card limit”.
A lot of Australians are being offered everyday and this has been multiplying in two folds.
The most appalling there is in this news is that most of the Australians seeking loan amounts are now resulting to having their houses claimed or for some reason that they can’t pay, event their personal source of income are affected like the ones in Social Security, or financial help from their insurance.
Australian banks are now creating some restrictions though as soon as the report came out. They have trashed the report and said that it wasn’t true at all. Says chief executive Steven Munchenberg, there is no interest in banks providing debt to people and credit to people who cannot repay. Even calling out for a number of resolutions and recommendations, like a legislation to make sure the credit is not extended to those who cannot pay back. It also wants legislation to ensure interest rates charged by banks move in line with changes to the RBA cash rate, and it recommends the practice of paying bank workers commissions to sell their products be banned.
And Christopher Zinn from the consumer advocacy group Choice had express a welcoming for that note.
“Bank workers and staff are incentive’s for pushing credit onto people, basically the more credit that they can sell, the more returns they can get,” he said. However bank workers tactfully rejected the call and said it is only a standard practice to gain commissions just like how different industries do.
