FCIB probe

Sinckler taken aback by unilateral terms and conditions

Minister of Finance Chris Sinckler says he will be asking the relevant financial authorities under his watch, including the Central Bank of Barbados, to investigate proposed amendments by CIBC FirstCaribbean International to the terms and conditions of its customer service agreement.

CIBC_FirstCaribbean_International_Bank

The changes, which are due to take effect next January, will give the bank unilateral control over all future interest rates, fees, charges and overdraft limits.

FirstCaribbean has also warned customers that as a result of its decision to outsource some of its operations, it will no longer be accepting liability for any claims arising out of the handling of their accounts and information by contracted third parties.

Customers have been given until December 31 to agree to the changes. If they do not consent to the adjustments, this could lead to immediate termination of their banking services by FirstCaribbean.

Sinckler, who is a customer of the bank, said he was personally “taken aback” by the “directness” of the letter he received from the Canada-headquartered group this week outlining the changes.

However, as Minister of Finance, he said his first priority was to ensure that “all is correct and appropriate in the circumstances” and that ordinary Barbadians were not “ill treated” or “ill-done”.

Minister of Finance Chris Sinckler addressing meeting with hoteliers.
Minister of Finance Chris Sinckler.

In this regard, he told Barbados TODAY that there may also be some issues for the Fair Trading Commission (FTC) to look into.

“I will instruct that those agencies that fall under my remit that have charge of the regulation of financial institutions, to make sure that Barbadians are not being ill treated or ill-done by any of this, and that everything is appropriately done. If it is not, to ensure that it be reversed because it is a fairly serious issue,” he said.

“In the context of what we know now to be the issue of cybercrimes and electronic crimes and all of those things going on, I can see why people, and I certainly as a customer of FirstCaribbean Bank, would be a little uncomfortable with third parties handling their accounts and the institution with which you have primary relationship saying that they will not take responsibility for anything that happens after that.

“That is something that needs to be seriously assessed and investigated as to its appropriateness,” he stressed, adding “you will hear more from the Ministry in the coming days”.

Former president of the Barbados Bankers’ Association (BBA) Horace Cobham also said the development was worrying, contending that the proposed changes were unfair and unreasonable and the FTC should step in.

He also cautioned of wider implications for the banking sector if the provisions are implemented and work out for the financial institution.

“If one party in the industry is able to successfully execute a strategy that effectively reduces their cost, cost of servicing clients, cost of maintaining accounts, cost of information sharing with clients and the marketplace, it is only a matter of time before others in the industry will follow suit,” he told Barbados TODAY.

“If the objective here is to manage, if not reduce costs, and this approach is successful, then the others won’t have to reinvent the wheel. I’m not suggesting for one moment though that the others will follow suit.”

Cobham, a former banker and business owner, added: “They said ‘unilaterally change any of the terms of the account opening agreement’ and . . . if I use the reasonableness test, the question is ‘does that term in an agreement strike one as fair or reasonable?’ To agree to something today that you would be bound by tomorrow, next year, or 10 years from now seems to fail the reasonableness test and the fairness test and therefore that is an issue for the Fair Trading Commission to adjudicate on.”

“I have lived and seen and experienced the Fair Trading Commission taking issue with smaller issues, taking big issue with smaller issues than this. I think it would be important for people to look and see what the Fair Trading Commission is going to do . . .

Additionally, Cobham raised specific concerns about the disclosure by the bank that it intends to outsource client information, which could then be subject to laws of another country.

Stating that he does not believe the decision has been taken willy-nilly, the ex-banker said CIBC First Caribbean has an obligation to be more forthright with clients and potential customers on this issue.

“I don’t understand how they could commit you to all of these arrangements and then say they are not liable . . . It sounds like neither the bank nor the third party provider would be liable for any issues relating to the account information but yet they are the people who are making unilateral decisions . . . So I think they’ve got to explain and give clients a little more comfort about what that means,” he said.

Meantime, director general of the Barbados Consumer Research Association Malcolm Gibbs-Taitt has called on customers of the bank to take a stand.

He said they needed to register their strong disapproval of the plan via letters to the financial institution before the end of year deadline stipulated by the bank.

Gibbs-Taitt cautioned that if this move was allowed to go unchallenged, other banks could take similar action.

“When something happens at one bank and the other banks get wind of it, once it is seen as advantageous to the other banks they will follow suit. That is a fact and that is what we have to be fearful of,” the association boss added.

However, current president of the BBA Glyne Harrison has urged Barbadians not to worry about that.

He said while he could not comment on the CIBC development, all banks were required to notify the regulator of any changes.

“Each bank looks at their model and each bank would make decisions based on their model and structures of operation. There is no need for customers to worry that there will be a rush by banks to do the same. That is why we have a regulator,” Harrison said.

“All banks talk to the regulator before they go ahead and do these things. So customers don’t need to be afraid that all banks will rush and do this because it is not a general industry thing. This is one bank.”

Attempts to reach representatives of the FTC and the Central Bank of Barbados for comment were unsuccessful.

carolwilliams@barbadostoday.bb

11 Responses to FCIB probe

  1. Robert Holloway
    Robert Holloway November 15, 2014 at 2:15 am

    were inplace after 2007 for new accounts per news I saw

    Reply
  2. Roger Manning
    Roger Manning November 15, 2014 at 2:56 am

    I have to change banks yet again.

    Reply
  3. James Austin Bynoe
    James Austin Bynoe November 15, 2014 at 3:32 am

    As a regional cyber security evangelist with the Caribbean cyber security center this move by FCIB does not surprise me, and why I keep preaching the gospel of cyber safety. There has been a rise in cyber crime banking fraud across the region and the banking community instead of focusing on measures to protect themselves and customers by upgrading their IT banking and ATM platforms, they would rather shift the liability to a third party leaving customers in the no remedy zone when incidents occur. Until a comprehensive set of cyber laws are passed requiring financial institutions to comply with international standards for reporting, compliance and customer protection the banks will not what surely is the right thing. It simply time to take cyber crime and safety seriously in barbados and across the region.

    Reply
  4. James Austin Bynoe
    James Austin Bynoe November 15, 2014 at 3:32 am

    As a regional cyber security evangelist and CEO of the Caribbean cyber security center, this move by FCIB does not surprise me, and why I keep preaching the gospel of cyber safety. There has been a rise in cyber crime banking fraud across the region and the banking community instead of focusing on measures to protect themselves and customers by upgrading their IT banking and ATM platforms, would rather shift the liability to a third party leaving customers in the no remedy zone when incidents occur. Until a comprehensive set of cyber laws are passed requiring financial institutions to comply with international standards for reporting, compliance and customer protection the banking community has no incentive to do what is right to not only protect themselves but also their customers. Effective national cyber defense starts with laws, therefore It is simply time to take cyber crime and safety seriously in barbados and across the region.

    Reply
  5. Ralph White
    Ralph White November 15, 2014 at 4:40 am

    I changed years ago! Thank goodness!

    Reply
  6. Tony Webster November 15, 2014 at 6:12 am

    The CIBC move reminds those of us who yet read, of Orwells Big Brother! I’m therefore solidly with those who see the need to restrain this adventure lest it not only propagate to other banks, but become the new legal norm for all contracts governing transactions of service and goods. Government itself…might find some usefullness…in the “New Understanding”, as it seeks to climb those fiscal mountians yet surrounding them! The mind boggles!

    However…as I gently put on my Devil’s Advocate hat…I venture to ask one simple question:-
    When you last down-loaded an “app”; or an “updated app”, or even more particularly, a “free app”…did you read all 67 pages of the “contract”…or did you immediately, and consentingly, and willingly…click on the ” I agree” button?

    Reply
  7. Tony Waterman November 15, 2014 at 6:51 am

    I don’t see anything wrong with CIBC First Caribbean, changing the rules, with little or no respect for the Office of our Banking Commissioner’s Office, what i am more concerned about is that Barbadian who CLAIM that they have been “”INDEPENDENT”” for the past 48 Years. are not CLOISNG their Accounts at this Institution em ENMASSE, and heading over to their OWN Home grown institution “”The Credit Union””. Why after 48 years do we still think that WHITE IS RIGHT FOR US.
    If you stick with this Bank, WITHOUT any INFORMATION/BANKING Security and you Cannot Make a claim for RESTITUTION from them, PLEASE!!! don.’t come crying to me.
    IF YOU STICK WITH THIS INSTITUTION, YOU WILL BE UP **** CREEK WITHOUT A PADDLE, CHANGE NOW NOW NOW.
    All these FOREIGN BANKS see ALL the ISLANDS in the Caribbean Basin as not worth while.

    Reply
  8. Mark November 15, 2014 at 7:15 am

    This is very simple banks need people to stay in business all the people have to do is move their money from that bank.People need to understand that the power is in their hands not the the bank.

    Reply
  9. A.Blackman November 15, 2014 at 7:17 am

    Poor M of F , he only have a bank A/C for the last 6 years

    Reply
  10. Mark November 15, 2014 at 7:22 am

    Their was a situation in the US when banks add a $5 fee unto people ATM card for using the people started to withdraw their money at a rapid pace and that situation came to stop as soon as it started. Bajans can do the same work united.

    Reply
  11. morris redman November 15, 2014 at 12:30 pm

    The issue as I see it is that in the Caribbean and In other parts of the world with tight money
    (according to the current G 20 conference), plus bankers have been making bad loans and Computer cyber crime have been increasing as a local and international threat. Now the bankers are trying to introduce a third party to be responsible for collection. This is where government financial authorities and bankers must do a better job in ensuring that banks are not lending more than their capital would allow. Employees and law enforcement must also be better trained in detecting, investigating and preventing cyber crime against financial institutions. The Courts in the jurisdiction must also be prepared to have the appropriate legislation and fines to deal with cyber crime against financial institutions which in most jurisdictions around the world is tougher when the crime is against a financial institution.

    Reply

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