Gail Rant: I’m So Sick of this BS!
Posted by Gail | Filed under Debt Traps
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Last Tuesday the newspapers were full of stories about PwC Canada’s latest consumer lending survey. (In case you don’t know what PwC stands for, it’s the acronym for Pricewaterhouse Cooper, which is a consulting company.) PwC had a research company talk to over 600 Canadian homeowners with incomes over $100,000. To put this in perspective, according to the Tax Man, the median after-tax income for Canadian families of two or more persons was $63,800 in 2009, virtually unchanged from 2008 and 2007.
The thing that set my Rant Meter off was this line, as reported in the Financial Post: “Canadians look to their banks in a very paternalistic way in terms of providing good advice and diligence over what’s responsible and prudent for Canadians to borrow.”
Lord love a duck! Why is the expectation of good advice and diligence in terms of responsible lending being cast in the light of childlike expectations? Paternalistic? Really?
Maybe I’m wrong, but isn’t it in the banks’ shareholders’ best interest for them to lend prudently? And how did we get into such a mess that banks are actually turning to legislators and begging for help because the pressure from non-Canadian lenders and lenders of last resort are screwing with common sense and good lending practices.
The PwC guy being quoted terms the lending market a “battlefield.” Are consumers the soldiers that lay fallen because lenders are willing to sacrifice us in their war to gain and retain their little piece of the competitive real estate?
Lest you think that PwC is interested in helping the average Canadian by creating a more reasonable lending arena, let me quote from their Executive Summary: “According to the survey respondents, the majority find consolidated lending products appealing, and most are looking for education about how this product can best work to fit their unique needs. To successfully market consolidated lending products, bankers need to understand their clients’ needs and tune the many detailed product features to each customer’s unique circumstances.”
That blah blah blah means that while we’d like to believe Canadians are finally smartening up about getting out of debt, it’s a lot of talk. The action they want to take is to consolidate their debt (oh, yeah, make this easy for me, puh-lease) and PwC wants to “help” banks create just the right hook to reel in these wide-mouth consumers.
There are some other telling statements in the PwC report, like this gem: “According to the survey, debt isn’t a particularly scary word to the majority of Canadians. Nearly 80% agree that borrowing money is necessary to maintain their household.”
There’s also the revelation that 64% of respondents intend to decrease their borrowing over the next 12 months. Do you believe that intention will win out over a new slew of borrowing products aimed directly at consumers Achilles heels?
Let’s juxtapose that idea against this beauty from the survey: “78% of respondents still believe they have the capacity to borrow more.”
Shoot me now!