Banks feeling Heat?

"Any publicity is good publicity"
The sentiment behind this very common saying is very sound.

Unless you're a bank, in which case the saying is:
"Any publicity is bad publicity"

In the past couple of weeks, Australian mega-bank Westpac announced a profit that was remarkable in size by just about any metric ones wishes to use.  (eg, percentage of deposits, percentage of loans extended, blah blah blah)

Concerned (justifiably) that making lots of money at the expense of the Australian public (only the most ingenuous or foolish harbour thoughts that banks are there for their intended purpose - to facilitate the economy and public economic benefit) Westpac mounted a survey of customers ("We've just made a record profit that'd choke a horse; do you feel (a) ripped off, (b) extremely ripped off, or (c) totally cheated out of your money?")

Mine Host knows this as he is not a Westpac customer yet received a mysterious telephone call:

The call was a survey about the "customer service experience" of his dealings with a Westpac staffer by the name of; Mr. Rapacious Lender, a business banking manager.

The only contact with Mr. Rapacious Lender was several weeks beforehand when the Wayside Tavern's accounant had telephoned once with a most basic enquiry.

The telephone surveyor was somewhat stunned to discover that nobody in "the household" had ever dealt with, nor even met, Mr. Rapacious Lender, nor was any member of "the household" in any manner a customer of Westpac.

It would seem that one phone call was sufficient for Mr. Rapacious Lender to report Mine Host & the Wayside Tavern as "new customers" to HQ in the big smoke.

Customer Confidentiality

One of the staff from the Wayside Tavern struts into the bank.
This person is often entrusted to carry a deposit to the bank and deposit it over the counter, and that is the full extent of their involvement with banking matters.
They are not a signatory or in any way authorised on any bank account belonging to the Wayside Tavern.

Upon fronting the counter this staff member enquires of the teller:

"Does my boss have any bank accounts that I don't know about?"

The teller gazes at their screen and taps some keys on their console.
"Yes, here's an account which you probably don't know about"

"I didn't know that particular account existed" says the staff member, looking at the screen, "I'd like to know what activity there has been on that account."

"There's actually a fair bit of activity" responds the teller, "in fact too much to tell you about.  The account also maintains a significant cash balance!"

The teller then prints statements for the year to date (nine months worth), and hands them over the counter.


***************

Clarification:  The major sin in this tale is by the bank.
The staff member's sin is most minor alongside that committed by the bank officer.

Bankruptcy IV

From the 2nd of September:

"If one is to be bankrupted, it is always imagined there will be a tangible reason, & a person to blame.

E.g You have made a rash decision, & can blame only yourself. Or you have a lowdown mongrel of a bank manager, & thus have someone you can seethe over & plan to shoot, or something.

Either way, you could expect to have lots of warning, i.e. to be trading poorly for a while beforehand, or be having difficulties meeting bank commitments etc.

It never entered my head that it could pop out of nowhere, that you could be trading profitably, looking to expand, everything going fine. The *pop* along comes an event that you never imagined would happen to anybody. There is no person to blame, no rash decision been made."
The spectre of bankruptcy is no longer looming, I can sleep again. And I made this offer:

"Anybody who can guess what it is that has caused such trouble will be allowed open slather in my wine cellar."

Nobody came close. Some great stories, but nobody guessed anywhere near to it.

The bank was very good about it. Much much better than expected.

The problem? I couldn't get insurance. No Australian underwriter would offer me insurance. The reason: I am located north of 23 degrees latitude, & insurance companies will not offer commercial property insurance to anybody north of 23 degrees.

I had expected there would be a last minute quote, but instead for several weeks I was totally & completely uninsured. (Public liability insurance was no problem, otherwise I'd have been in even worse trouble.)

My preferred insurance brokers, a huge worldwide firm, was finally able to find insurance for me on the international market. This was no joke, putting a country pub into a market that is designed for the insuring of entire fleets of oil tankers or something.

The insurance was finally cobbled together via 8 different underwriters. Quite an effort.

The cost as 1/5th of profitability.... When I entered the pub trade property insurance was about 1/70th of profitability. Increase in risk is negligible. Increase in real terms, in cost of replacement has been negligible.

Very few people believed me. The insurance industry became heated when I sooled the politicians onto them. My industry association was ambivalent, but after phoning a few insurance companies themself, oh boy did they ever believe me. The Liberal & National party responses varied between laughing ("You're in a pickle mate!" - from one very well known LNP politician, who actually laughed as if it was the funniest thing heard all week. This was not helpful)

My local member at least pretended to give a toss. Every ALP politician I contacted was extremely helpful, & escalated the predicament (it'll affect the bulk of businesses north of 23) at either state or federal level.

My ALP federal politician, within 30 minutes of being phoned by me, traipsed straight accross Canberra to thump the desk on my behalf with certain powers. For their trouble they received this response: "Your consitituent is making this up."

That was action within 30 minutes. The first LNP politician to call me back took half a week to do so. All they had to say was how lucky it was I had phoned them, as the ALP "won't even bother to help you mate."

Why is lack of insurance critical? It is a condition of bank finance. Without insurance the bank has cause to instantly withdraw their finance, force a sale. In such circumstances the sale would be for a fraction of what would be termed a "fire sale price", being as the incoming buyer would be buying something they cannot insure.

This is a possible explanation for the (to me) strange behaviour of the past few months from a couple of other pubs in town.

Bankruptcy III

Averted!

The longest 3 weeks of my life.
Now I can sleep again.

I'll allow another week for anybody to guess what the strife was.

Bankruptcy II

There is light on the horizon.
I may be remaining in business.
Not out of the woods yet.
It has been an anxious fortnight.

My situation is not completely unique.
But it is not faced by anybody south of 23 degrees latitude.
Nobody has yet guessed what has gone wrong.
One of the difficulties has been that lobby groups in Canberra refuse to believe what has happened, & state that it is not possible.

The attitude of the Liberal & National parties toward an external threat that may wipe out small businesses, has been utterly disgusting. They couldn't care less.
The attitude & assistance provided by the Australian Labor Party has been first class.

Bankruptcy

Update: No, the Carbon Commissioner has not given me the grandaddy of all fines for overgassing the beer. (Think again, funny person who emailed that)

Update 2: No, I'm not being shut down for encouraging hate speech after someone was overheard mumbling "Gillard's gotta go!" into their beer. (Gillard is the name of the [current] Prime Minister)

Update 3: On a serious note, it has nothing to do with any government agency. In fact both state & federal Labor Party politicians have been of invaluable help.


If one is to be bankrupted, it is always imagined there will be a tangible reason, & a person to blame.

E.g. You have made a rash decision, & can blame only yourself. Or you have a low down mongrel for a bank manager, & thus have someone you can seethe over & plan to shoot or something.

Either way, you could expect to have lots of warning, i.e. to be trading poorly for a while beforehand, or be having difficulties meeting bank committments etc.

It never entered my head that it could pop out of nowhere, that you could be trading profitably, looking to expand, everything going fine. Then *pop* along comes an event that you never imagined would happen to anybody. There is no person to blame, no rash decision been made.

The spectre of bankruptcy is looming, I won't be sleeping much for many days.

Anyone who can guess what it is that has caused such trouble will be allowed to pretend that they have open slather in my wine cellar (no actual access allowed, as by then the bank will likely possess it.)

Remember, there is no person responsible, and it could happen to anybody who has their business tied up in a tangible compact asset (like a pub).
It is not even an event (like a natural disaster, or closure of a nearby military base full of customers) & realisation of it crept up in only a few short days beforehand.

When I finally tell you all (coz nobody will guess it) you'll never imagine it could have happened the way it did.

Chequebook Security Procedures

"What procedures do you have in place to ensure your cheques are written only by authorised people?" Sneered the "Business Banking Relationship Officer" from the bank.

My reply:
"An expectation that your bank will not issue my chequebooks to strangers."



Not much he could say to that.

The bank had issued Six Hundred of my cheques to people who are not signatories to the account. Of these circa Sixty were written & presented by the time I detected something amiss.

The phone conversation was a rather "hot" one.

Inferior Beings

The Bank Manager returns from an overseas holiday.
He is no sooner back at work than he is dismissed.
He was informed via email.
The message was in his inbox, the first morning back at work.

There are entities who don't do things as well as Mine Host does.
The bank has just joined this list.

In that Case, Get an Earful of This!

A memorable ending for a phone to the bank.

The identity of this bank shall be concealed by using the unbreakable code name of - say - ZNA Bank.

For a bit of background, ZNA Bank has been strictly observing banking rules (& etc) with Mine Host. They have been refusing to allow depositing of cheques made out to "Wayside Motel" on the basis that the account is in the name of "Wayside Hotel" (sweet smile: "You'll just have to contact the drawer sir, & get them to reissue a cheque in the correct name") & other such infuriating conduct.

Then Mine Host discovers that ZNA has been taking orders for chequebooks (on one of his accounts) from members of his staff, who are not signatories to that account. These non-signatories then wrote a pile of cheques, all of which were honoured by ZNA Bank.

Mine Host is relishing the forthcoming "Please Explain" meeting he will be having with the branch manager.

For those unfamiliar with the twists of modern banking, (".. to better serve your financial needs"), it is not that they honoured cheques without verifying the signature that will embarrass the bank, but the issuing of chequebooks to non-signatories.
That they have been honouring cheques written with an invalid signature will not cause the bank to bat an eyelid. In our improved modern banking system this is the problem of the account holder.

With this bit of background in mind, one can imagine Mine Host's distress when the transaction banking helpdesk refused to discuss anything with him. For he was unable to satisfy the bank's security requirements & the operator was "unable to confirm identity".

It would seem the security procedures for mere phone conversation with the bank are considerably tighter than those required to have a chequebook printed & handed over.

Mine Host, by now experiencing a transitional mood, expounded down the phone on the subject of security procedures as they applied to telephone conversations or chequebook possession. During this delivery of opinion he may have used the "BS" word to describe the actions of ZNA Bank.

The operator then got all indignant & prissy, as if it was Mine Host and not the bank who was out of order, and in a stern tone of voice informed Mine Host that if he persisted with "language like that" she would terminate the call.

Mine Host reflected briefly on this.
The bank was refusing to talk to him, thus the call was going nowhere anyway,
The bank had sins aplenty,
The operator would not tolerate any "further" bad language,
The operator had stated emphatically that it was impossible to identify the caller,

Mine Host then gave her very good reason to terminate the call.