Banks cross 'the bad marketing line'

This country is, after all, a free-market democracy and businesses cannot be expected to play the role of inflation watchdogs and guardians against public spending sprees.

The only possible reason for banks to curb their credit card sales enthusiasm is if there is any possibility that their credit card debt book should start getting out of hand.

Which is highly unlikely because right now only about two percent of the big banks' assets are in card debt.

Questionable strategy

But, one has to raise a question mark on the gung-ho nature of some credit card marketing campaigns, particularly when it comes to direct selling.

A programme hosted by Tom London on Radio 702 and Cape Talk just before Christmas had callers phoning in with a litany of direct selling horror stories, none of which did the brand reputations of the banks concerned any good at all.

One caller, a university student aged 22, was called by a bank and offered a credit card with a limit of R30 000. When she insisted that she had no credit record, no income other than minimal parental pocket money and that she was to all intents and purposes unemployed, the tele-salesman just said; "That's no problem, just have it anyway".

Irresponsible

There is no doubt that the big bosses at the banks would have had a fit if they had heard one of their people behaving so irresponsibly but that's the problem with direct selling - your corporate reputation is often in the hands of people who just couldn't care less and want to flog as much as possible in any way they can to get as much commission as possible.

Quite frankly, some of the wholesale card-flogging madness that went on late last year was tantamount to drug pushers enticing kids to try some upper or other.

And this is where the banks do have a responsibility - to ensure that the over-enthusiastic and devil may care sales people in their tele-sales departments get rooted out.

It's bad marketing and bad business. And it would be entirely the banks' own fault if legislation had to be put in place to severely crack down on banks who foist credit cards on people who not only can't afford them but who would get themselves into deep trouble by being tempted to start using what appeared to be manna from heaven.

Money grubbing

Maybe banks don't care. Maybe they don't give a hoot about their reputations being damaged. After all, the public of this country already rates banks as money-grubbing shysters while back at the ranch they're all making money hand over fist.

But, maybe one day the South African consumer will change and stop simply buying things like cars as though there was no tomorrow in spite of prices skyrocketing way above world averages and maybe they'll start resisting bank charges that have long since left world averages in the dust.

And when that day comes, reputation will count for a lot more than it does today.

Life ruined

If that young university student with her windfall R30 000 credit card is unable to resist the temptation to use it and inevitably gets into serious financial trouble, she and her friends and family will remember forever the bank that ruined her life.

It's not about morality, it's about bad marketing.