St George denies further channel conflict accusations

by Mackenzie McCarty29 Apr 2013

St George has been forced to defend itself once more against channel conflict accusations, after a letter allegedly send to a home loan customer and broker appeared to promote the use of the lender’s own branches and call centre over using a broker.

The recipient of the letter says the letter is ‘extremely disappointing,’ as ‘obviously the broker was the one who introduced the client to the branch in the first place’.

Australian Broker received a copy of the original letter sent by St George, which reads:

“Now is a great time to ensure that you’re aware of [features] and how they could help make managing your home loan easier as your needs change. With that in mind, we want to offer you a home loan check-up with one of our St George Home Loan Specialists…”

After outlining the particular benefits of speaking with a St George home loan specialist, the letter ends with:

“For your convenience, there are a number of ways you can organise your check-up. You can choose to do it in branch or over the phone…Or, if you prefer, you can contact your broker.”

St George general manager of mortgage broking, Clive Kirkpatrick, says the letter has been sent out for ‘some years,’ and is issued to all home loan customers on the anniversary of their home loan.

“[The letter is used]as a way of encouraging them to ensure that their total banking needs are being met; we have an obligation as a lender to make regular contact with our customers.  We believe that the letter clearly tells the customer to contact their broker if they choose to do so.  As a matter of course we talk to a lot of brokers, we seek feedback on all facets of the business and this letter hasn't caused any problems for brokers who maintain good on-going relationships with their customers.”

Kirkpatrick says the lender has implemented a new process of on-boarding new broker customers over the past few months.

“Those welcome calls are now made by the local branch chosen by the broker and we're receiving a lot of positive feedback from brokers.  We've done a great deal of work with our branches in helping them to understand what mortgage brokers mean to our business and what a brokers customers mean to them - channel integrity is vitally important to us.  We've also recognised that brokers can benefit from a relationship with their local branch by working together to help customers to get the most from our products and services - we encourage all brokers to connect with their local branches.”

Finally, he says, if the client chooses to go into a branch or call the St George contact centre to discuss their needs and, as a result of those discussions, tops up their loan up to $100k, the broker maintains their trail.

This is the second time in as many months that St George has come under fire following accusations of channel conflict. Back in March, Australian Broker reported on a similar incident involving the timing of bank-initiated client contact.

COMMENTS

  • by Country Broker 29/04/2013 11:02:53 AM

    This would ensure I would never use St George / Bank Of Melbourne !

  • by MelbBroker 29/04/2013 11:04:46 AM

    What a load of rubbish. These clients have opted out of direct marketing and yet continue to receive what is clearly a marketing letter. If they loved brokers so much, why wouldn't the letter refer to that option first (or your local branch, should you prefer)? They must truly believe all brokers are stupid.

  • by Tony 29/04/2013 11:10:10 AM

    Seems to me a slap in the face for brokers and what if the increase or similarly new borrowings are more than $100.K ???? Why wasn't that asked, addressed and commented on in article?
    How can you establish a relationship with your local branch when your client base covers an enormous territory and clients want their local or most convenient branch !!!!