Firstly, I must apologise for the length of this post. I tend to be loquacious in my writings, and I have also included quite a few details of my experience. That said, I have broken this down into sections for ease of reading.
At the beginning of 2017, I received a brochure from the Commonwealth Bank of Australia (CBA). This was not entirely surprising, as I am one of the bank’s many customers (though once I have found a decent replacement will be one of its ex-customers, due to the events described below).
The brochure encouraged me to open up a credit card account with CBA. I had no particular reason to do so, as I had a credit card that was entirely suited to my needs, but this offer included some freebies – and I’m a sucker for freebies. Accordingly, I decided that I would apply for the card, comply with the conditions and get the freebies, and then cancel it.
A cunning plan? No doubt; unfortunately I was not expecting the mendacity of a bank that I had entrusted with my money for thirty years.
The offer – key points
So, what was I being offered, and what was required of me? There were different offers attached to different conditions, but I have summarised these in two parts.
The bank’s offer, most of which is still available via its website, promised:
- A low rate credit card
- A waiver of the first year’s annual fee
- $250 cash back.
- Apply by 28 February
- Spend $500 on the card by 31 March 2017.
The letter also specified how to apply: this could be done online, by posting the completed form, or in person.
Finally, it specified the conditions in detail, and what I needed to include with my application (such as proof of income).
I scanned the completed application form, and submitted it at the local bank branch on 22 February. Three days later, on 25 February, the bank wrote to congratulate me on my new credit card.
During March 2017, I eschewed the points I would earn with my main credit card, to ensure I spent at least $500 on this card – and thus qualified for all the benefits of this offer. I spent $789.45 by the time I received the first statement, for the period 24 February to 20 March.
The first statement contained a surprise: on 20 March it listed “Annual fee” – for $59.00, bringing the statement total to $848.45! I was not happy, and immediately contacted the bank to ensure that I was going to receive the promised benefits.
My first contact with the bank resulted in a promise to respond once the matter had been investigated. I got an email on 28 March, in response to my complaint:
…because the credit card was applied for in branch there is no cash back offer and also because it was not submitted via the offer prompt, If the branch had advised otherwise, You will then need to attend the branch and speak with them directly…
I sought to respond to the writer, using the bank’s online communications, on 29 March – but received no response. I was later advised that my response would not have been received, as the ‘case’ had been ‘closed’. Accordingly, I rang again on 3 April – speaking to another person (because why would anyone care about a consistent communications channel?). This time I was able to email the new contact’s supervisor (apparently not all bank staff have emails) with a copy of the application form – showing clearly that it provided for application in the branch.
I received a response to this enquiry on the same day:
…it was the branch, not yourself that did not submit the application correctly… I have emailed [name omitted] at the [branch]… asking her to follow up the application and refunds and requested she contact you ASAP…
In talking to the bank representative, I was informed that it was up to the branch whether it wished to honour the offer.
My response to this latest communication stated in part:
It may well be that your branch failed to follow appropriate procedures, but that is not my problem. I fulfilled the requirements of the bank’s offer when I lodged my application. That is, I entered into a contract with the Commonwealth Bank of Australia, not with a particular branch. If the bank has a problem with its internal processes, that is (obviously) an internal matter. I now expect your confirmation of the credit, and its placement against my account, by COB Tuesday 04/04/2017. This is REGARDLESS of whether a branch followed the ‘correct procedure’, or what the branch may wish to ‘decide’…
In other words, I was getting annoyed.
On 10 April 2017, I received a phone call from the local branch’s representative. She stated that I had applied for the credit card “outside the offer period”. At this point I was ready to get really angry, but managed to retain some semblance of composure while explaining to her that I had already provided the bank with the evidence showing that this was not the case. I was, I told her, utterly sick of the bank giving me the run-around.
In response, I was advised that she would check with her manager and ring me back the following day to inform me “what can be done”.
True to her word, this representative did indeed ring the following day. She spoke very briefly, advising me that my credit card should soon show two transactions crediting me with $59 and $250. I rang her on 12 April as only one of these credits was visible, and she stated that the other may take some extra time as it involved ‘a different process’.
I had won – sort of.
Outcomes and considerata
While I have not yet abandoned the CBA, I intend to do so as soon as I have found the best replacement for my family’s banking needs. Additionally, I wrote a letter detailing this experience, and sent it to my federal representatives (Senate and House of Representatives), the ACCC, and APRA (Australian Prudential Regulation Authority, the agency responsible for regulating financial institutions). One of my senators has since responded to seek my permission before writing to ASIC in relation to this experience.
At a broader level, what was this experience telling me about the bank I have used for my entire working life?
- It is too big to be able to deal consistently with most of its customers. I dealt with three different bank employees (four if I count the manager involved in my second contact). Each time I had to explain what the problem was, and respond to the same excuses (you applied too late and/or the wrong way).
- Bank employees are not across the requirements of the bank’s offers.
- There appears to be a culture of “no”. ‘We can’t do that’; ‘we are unable to’; ‘you are asking for something I cannot do’ etc.
This third problem is the major concern. I do not think the bank has issued its employees with instructions to deny benefits to customers; instead, I suspect that remuneration packages are designed to get new customers in as cheaply as possible. That is, the problems I encountered are likely to be endemic, but are unlikely to be due to an explicit policy. Instead, I suspect that incentives for employees – from the front counter on up – are designed so that if a promise can be reneged upon it will be.
I suspect that the bank has misled many more customers than just me in this deal. Given that every one of the contacts I had commenced with being told that I was not eligible for the offer that I plainly was eligible for, I expect that many thousands of Australians have encountered similar situations. Worse, most of us do not keep copies of everything, and so most people that the bank has managed to scam in this manner have had no recourse.
We need a royal commission to examine how banks are failing us, and why. These are institutions that are ‘too big to fail’, and that clamoured for government assistance during the GFC – they have obligations to the taxpayers that assisted them in their time of need, and they are not currently meeting those obligations.
I would be keen to hear from others who have been offered this ‘deal’, and then been refused the benefits because ‘stuff’. How have you responded?