‘Same banks, same techniques’

Consumer NZ has called for greater monitoring of banks and insurance companies, claiming Kiwis are being sold products they do not need by companies that are facing a royal commission of inquiry in Australia.

Yesterday a parliamentary select committee heard submissions on the behaviour of New Zealand’s banking sector, with an eye to the inquiry that is under way in Australia.

Although the Australian inquiry has seen a string of top-level bankers and insurance executives lose their careers and in some cases facing criminal charges, regulators in New Zealand have said they do not see the same systemic problems here.

Consumer NZ chief executive Sue Chetwin told the finance and expenditure select committee that the Australian banks had denied there were problems before the behaviour, which included bribery and fraud, was exposed.

‘‘The lack of scrutiny of our banking industry, I think, calls into question whether consumers can have faith in those [types of] assurances,’’ Chetwin said.

‘‘It’s the same banks, the same products and possibly the same sales techniques.’’

Consumer NZ gave examples of customers who had been convinced to buy insurance products that they did not need, which Chetwin called ‘‘nefarious’’ behaviour.

Two years ago she said she lobbied ANZ in New Zealand to stop charging customers a fee for using rival banks’ ATMs, but was told it was impossible. Yet, shortly after the banks in Australia decided to abolish the fees, the New Zealand banks quickly followed.

ACT leader David Seymour questioned the significance of the insurance problems in the context of what had been seen in Australia.

‘‘What I’m taking from this is that in Australia you’ve got bribery, fraud, hellfire and brimstone, [but] here in New Zealand you’ve managed to find a couple of people who are overinsured,’’ he said.

Seymour asked Chetwin to rate how badly the banks were behaving in New Zealand, compared with Australia. She refused to, saying it was impossible to know what was happening.

‘‘Maybe we don’t need the fullblown inquiry that we had in Australia, but what we do need here is to be able to get in there and have a look,’’ Chetwin said.

First Union national organiser Stephen Parry told the select committee that the union believed there was no place for sales targets among banking staff.

He said the systemic conditions that allowed the conduct seen in Australia to occur was ‘‘in place’’ in New Zealand, meaning there should be a presumption for an inquiry.

Antony Buick-Constable, acting chief executive at the New Zealand Bankers Association, insisted the banks in New Zealand were different to their Australian parent companies, with separate boards made up of directors who were required to act in the best interests of the New Zealand operations, under risk of being thrown out of the industry.

He claimed the behaviour seen in Australia was not present here.

‘‘We think, importantly, it comes down to the smaller size of our country and the smaller size of our banks,’’ Buick-Constable said.

‘‘We’re more connected – we’re talking to our customers on the sideline of footy matches on a Saturday. We think that is an important difference from the Australian landscape.

‘‘We are very connected to our customers.’’

Sue Chetwin, above, of Consumer NZ ‘‘Maybe we don’t need the fullblown inquiry that we had in Australia.’’