I got a cheque in the mail. Completely unexpected. A real cheque for $2400. None of this “you may have won $2400.” It was real.
All I needed to do was deposit the cheque and I would be richer $2400. Woo hoo! Perhaps it was a dividend from one of my investments. Maybe I had a bank deposit roll off. Well whatever. Money is money.
But wait… this cheque was a bit different. It was unsigned. I needed to sign it myself before depositing. This was enough to get me digging through small print I don’t usually have time for…
Surprise, surprise! The cheque was in fact a cheque against my own credit card. If I banked it, I would be borrowing on my card.
I did not ask for a loan. I did not need a loan. But my bank wanted me to get into some debt with them.
I’ve always found bank marketing problematic: how they call you up asking you to borrow; how they sell structured investment products that the salesperson themself barely understands; how they push credit cards on shoppers as they are walking through malls.
But to me, this latest marketing ploy was a new low.
There will be some people who may not pause to read through the marketing material. There is no warning saying that “By signing this you agree to borrow on your credit card at X% per month.”
Sure there is a covering letter. Sure it is up to the consumer to beware.
But is there not a duty for the banks to act responsibly? To be very clear and not conceal debt as some kind of gift – even if it is a gift to yourself?
Banking marketing tactics like this should be regulated. Lending should be treated like we treat legalized prostitution: you can provide the service but you should not solicit or encourage the consumption of your product.
Banking products are not like other consumer products: a loan is not a latte; it’s not an iPod. It’s an obligation to repay money over time and possibly one you cannot meet or couldn’t if circumstances change. It is not a decision to take lightly or to be made light of.
To encourage a person to get into debt… to create a loan that is only one signature away… is, in my personal opinion, a moral hazard.