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Posts published in October 2018

Banks have no moral or ethical obligations

I read sometimes that people wonder about the actions of banks and whether they should have a moral and ethical obligations towards its customers.

Here is a link to an article on Stuff which, amongst other things, asks that question.

https://www.stuff.co.nz/business/107570574/Doesn-t-the-bank-have-a-duty-to-help-me-live-better

Probably the best person to answer that is the Banking Ombudsman. In their letter to me regarding ASB bank, they advised
“….The words “duty or obligation” generally refer to a legal obligation or an obligation under a code of practice. They do not include a moral or ethical duty, neither of which is enshrined in law and about both of which opinions differ.”

That’s a polite way of saying that banks do not have any moral or ethical obligations and nor is that part of their customer service.

Corporations don’t have to be “nice” to customers, the same goes also for other large corporations like telecommunication companies and insurance.

There is so little competition from any other competitor, even if you do leave because of poor service, you are likely to return at some point in your life. Banks and corporations keep customer profiles and histories for life, so they get to decide whether they will take you on as a customer.

In NZ it is always expected that the customer is responsible for their own actions when dealing with corporations like the banks and others. Corrupt banks and corporations in NZ will never be penalised by the courts for their wrongs, and if you are harmed by the wrongful actions of a bank, no court anywhere will rule in your favour.

A lot of what is portrayed in the media about the banking industry and other corporations are to hide the truth about how those industries actually operate. Evidence I gathered to understand the bankruptcy against me showed not only did the banks act fraudulently but they joined with others including government agents and solicitors, for the one goal, to try and keep me in debt for the rest of my life. Once the banks realise you start to take control of your spending and reduce your debt, they will bankrupt you, to make sure you can never borrow money again. Which could mean a substantial loss of income for the bank, so they retaliate. Its all about the life time value of the customer. Why else do you think it takes 30 years to pay off a mortgage.

I learned the hard way that bankruptcy will stay with you for life, because the government makes it public. That is the punishment the lending industries put upon you, not for defaulting on your debt, but that you wish to put yourself in a better financial position so you cannot get into debt again.

The economist of Westpac bank in an article says that NZ’s economy is built on debt. With the household debt levels at more than $260 billion, that fact is certainly true.

Bankrupts are no longer fit and proper persons in some sectors

There are more than one thousand people bankrupted in NZ every year.

I’ve been researching the life long impact that a bankruptcy imposes on people. I was looking at the application on the Financial Markets Authority website to see what was entailed in applying for a Market Services Licence under the Financial Markets Conduct Act. You actually have to declare that you are a fit and proper person by way of a checklist. One of the questions is – have you been bankrupted or entered into a creditor compromise agreement in the last 15 years.

I asked the Chartered Accountants Society what they deemed to be a fit and proper person, but they did not respond. Some regular jobs can never be entered into. Apparently one cannot obtain any insurance while bankrupted.

The Insolvency Act removed the right to be automatically discharged from bankruptcy after three years. The Official Assignee did say that there are some bankrupts who have been in bankruptcy for many years.

When I speak to lawyers and accountants about my upcoming forced bankruptcy by BNZ, they can only advise whether I meet the criteria in terms of dollar value.

Not one has had the skill to advise the actual consequences of not just a forced bankruptcy by a creditor but even when a debtor themselves files. The insolvency and trustee website does put some information out. Information that includes becoming bankrupted may affect ones banking, credit reporting, employment and privacy etc.

What they don’t say is that unpaid debt is actually deemed a crime of which there is no clean slate. If a financial hearing is requested of you by a creditor through the courts, you can actually be arrested if you don’t appear. That deems you a criminal.

So should people who are bankrupted or who even have outstanding debt, be treated by society as a criminal and also as no longer a fit and proper person as some industries already treat them. Should their right to make amends be also taken away from them.

It has been said that in NZ there is a tremendous stigma around bankrupted people. Is that an acceptable standard for the people of our country. Should our laws be changed to remove the stigma. Should our laws that take away the rights of debtors be changed. Laws like the Privacy Act, and the right to represent yourself fully in court. As a judgment debtor myself my rights to those things has been denied. Should our laws be changed so debt collectors and creditors cannot continue collecting debt for the rest of a persons life.

I cannot defend creditor claims against me in the High Court without it being made public. That defense will stay public forever. I was also surprised to find that bankruptcy annulments are also permanently made public. The earliest annulment I found on the NZ Gazette dated back to 1993. Should the name of the creditor who bankrupts a person be made public.

Should people in debt be ever allowed a second chance at life. Or should they stay branded as no longer a fit and proper person for life, and be disciminated against for life.

If you readers could change our laws around bankruptcy and insolvency, what would you change?

Lisa