Banks' attitude to people who bailed them out is despicable
When even the body to whom members of the public complain about how the banks are treating them, complains about how the banks are treating it, we have a situation.
Ordinary people are just a "prawn in the game", as Arthur Daley from the TV show 'Minder' used to say, with banks conducting their business without even a nod to customer relations.
But if they can't be bothered to improve their game when the Financial Services Ombudsman becomes involved, then something is seriously adrift.
Publishing a review into the banks' handling of customer complaints yesterday, a smarting Ombudsman Bill Prasifka said his office was being treated as just another complaint department. If the Ombudsman finds dealing with the banks tough going, heaven help struggling homeowners skidding into arrears.
The Ombudsman's report showed no improvement in either complaint procedures or quantity received – on the contrary, things are growing worse. The first six months of 2013 recorded a 27pc rise in complaints compared with last year.
Let me decode the figures: banks are taking the mickey.
Clearly, senior bankers have developed amnesia. Personally, I'd make it a condition of their employment contracts for the following sentence to be stencilled on their desks: taxpayers spent €62bn net bailing out banks.
So stop treating ordinary people as expendable. And stop trying to lump everybody in mortgage arrears into the same category. Circumstances vary from case to case, and not every customer who's behind with repayments is pulling a fast one. Strategic defaulters could be less common than banks would like the public to believe.
The Ombudsman's report revealed the same complaints keep recurring, meaning no lessons are being absorbed. Either banks lack sufficient staff to deal with complaints, or employees aren't being trained properly, or else bank chiefs don't give a tinker's curse about consumer grievances and that ethos filters through the ranks.
Here's my experience of the internal complaints procedure within a bank. Earlier this year, I discovered my bank was overcharging me by quite a significant sum for a life assurance policy on my mortgage.
When I raised this, instead of an apology and an offer to put it right at once, my bank directed me to its complaints procedure, where I joined a lengthy queue.
I made a formal complaint and supplied all the necessary details, thinking it was an open and shut case. By and by, I received a letter telling me the matter would be looked into within 30 days.
Thirty days passed, and another letter landed on the doormat saying the bank was not yet in a position to assess my case – I'd hear back in another 30 days. The same happened again after a further 30 days elapsed.
On receipt of the third letter fobbing me off, I snapped and rang the person named at the foot of the letter, saying I was tired of being given the runaround. Far from being apologetic, he all but muttered "tough" – his department was very busy, he said. It needed no crystal ball to see his division was under-resourced and not managing to keep pace with the volume of complaints received.
In the end, we agreed a settlement then and there to resolve the matter – although I suspect he only did it to get rid of me and was equally prepared to keep sending out those "dangle away for another 30 days" letters.
My current account wasn't overdrawn, nor was I behind with mortgage repayments, and the bank had been caught overcharging on a policy it sold me. No question but it was in the wrong. However, there was no sense of contrition, let alone any rush to make good.
My issue was relatively minor yet it gave me a taste of the misery which stems from interacting with one of the financial institutions: a frustrating, protracted experience in which customers are treated with scant respect.
Now consider what it must be like for someone in financial distress, threatened with the loss of their home and/or business – a prospect facing many attempting to negotiate with banks today.
To date, Mr Prasifka has been muzzled – even though we're five years into the collapse – and is unable to name and shame unco-operative financial institutions.
But on RTE's 'Morning Ireland' yesterday, he said legislation allowing him to deliver fuller reports, including identifying repeat offenders on dispute resolution, would shortly be in force.
My disheartening experience was with Danske Bank, by the way. I say this because we need to know which banks – if any – are taking seriously their duty to manage customers' problems. And which are failing to engage.
"The banks seem to have no shortage of resources to sell all this stuff to people but when it comes to cleaning up the mess we're finding some of them sadly lacking in any interest in doing so," reported Mr Prasifka.
What banks are interested in doing, however, is to brand people in mortgage arrears as strategic defaulters. Even unfortunates who were never speculators, but simply found themselves caught out by the collapse, are being typecast as "can pay, won't pay" chancers. This is a cynical move to manipulate public opinion.
At the MacGill Summer School recently, economist Alan Ahearne said no reliable data existed for strategic defaults. Yet David Duffy of AIB is on record suggesting that one in five people in arrears is a strategic defaulter. This is a cynical, softening up process in advance of evictions.
Banks need to work with customers for solutions. Alternatively ignoring and harassing them is no quick fix, nor is demonising them.
With taxpayers' help, banks are managing to ride out the crisis. But any business which shies away from connecting with its customers is galloping full-tilt towards a dim future.