The Finance Brokers Association of Australia
(FBAA) has labelled reports of major banks using Veda alerts to ‘spy’ on customers as “anti-competitive” and “completely wrong”. He is now encouraging brokers to use it as an opportunity to attract a growing number of customers disenchanted by the major banks.
According to a report by Fairfax
, NAB is being tipped off through Veda alerts each time a business banking customer goes to a rival for a loan. The major bank has now been accused of using “Big Brother” tactics for commercial gain.
The FBAA’s Peter White told Australian Broker
that this is a breach of privacy and a breach of competition laws.
“A borrower recently went and applied for a car loan from ANZ and was hocked to receive an email from NAB that its ‘smarter’ system had alerted them she was seeking and acquiring for finance elsewhere,” White said.
“My concern is it’s a breach of the privacy act and a breach of the ACCC – anti-competitive practices. I think it is completely wrong.”
White said he has heard about this practice before but there is no evidence as yet that it is happening with home loan customers. However, he said it is safe to assume that the banks would not stop at business lending.
“There’s no evidence as yet it is happening with consumer home loans, but if they can do it with [car loans] they can do it elsewhere,” he told Australian Broker
“In our industry, banks have been manipulating systems to stall transactions for forever and a day. If you try and refinance, it can take a month to get your discharge papers organised so you can go to settlement from one lender to another. To me that is anti-competitive as well.
“But in this issue here, they are using a credit reporting agency to get consumer information for commercial gain. It is just wrong.”
White is now encouraging brokers to market themselves as a solution to this problem.
“Brokers have contacts with most financial institutions saving the customer time and effort, not to mention keeping their financial details at arm’s length from the lender at the initial inquiry stage,” White said.
“It is important brokers get the message across that customers have every right to refinance or apply for a new loan without having a bank accessing personal information which they have no right doing.”