By: Staff Reporter
Australian banks have been accused of pushing debt onto customers regardless of their ability to pay it back.
According to a new survey by The Australia Institute the major Australian banks are reaping ‘super profits’ through unsolicited offers for new credit cards, personal loans and increased credit card limits.
The report “Money and Power” found that in the past 12 months two in three respondents to the survey had received an unsolicited offer for a new credit card. One in two had received an unsolicited offer to increase their credit card limit and one in three had received an offer for a personal loan.
The report also found that one in five received an offer to increase the available credit on their home loan.
According to the report the survey found that seven in 10 Australians believe the big banks’ market power is too strong yet many believed, at the same time, that the bigger a bank’s profits, the safer it is.
Josh Fear, the Institute’s deputy director and report co-author, said government intervention and new regulation policies were vital.
“The big banks are reaping underlying profits of around $35 billion per year, $20 billion of which is ‘super profits’ earned because of their market power,” he said.
Among the recommendations made by the Institute was the proposal to legally enforce banks’ interest rates to sit in line with the RBA cash rate and the restriction or banning of sales targets and commissions for bank workers.