‘See everything you are doing’: Banks are acting like Big Brother by ‘watching transactions’ during COVID-19
Banks are drilling down into customer expenses more than ever before as it becomes much harder to hide transactions due to pressures to pay by card.
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EXCLUSIVE: Banks are drilling down into customer expenses more than ever before as it becomes much harder to hide transactions due to pressures to pay by card.
In some instances home loan applicants are being forced to write handwritten letters, emails or even provide itemised receipts showing what their money is being spent on in order to get finance from banks.
Home Loan Experts’ managing director Otto Dargan said the “doomsday spending” by Australians during the COVID-19 pandemic has resulted in prospective borrowers having to spill the beans on exactly what they are spending their money on.
“We saw some borrowers become doomsday shoppers and stock up on supplies or home office equipment in March which has caused some lenders to question their living expenses when they apply for a loan,” he said.
“The banks asked them to write a letter to explain their expenses and then they were approved.”
Mr Dargan said banks now held more data on people’s spending habits than ever before as people were being pushed to pay by card not cash during the pandemic, to reduce the spread of the disease when using notes and coins.
“People’s spending patterns have changed, with more people using tap and pay or mobile payments the banks also have more data about their customers and the economy,” he said.
Melissa Roscoe, 25, recently settled a home loan on a three-bedroom home for $435,000 in Wyndham Vale in Melbourne’s southwest.
She said she was quizzed on specific details including itemised purchases she had made at Bunnings for home renovations that appeared on her bank statements.
She was also asked about specific medical expenses and a red light camera fine.
“I had to provide information in writing about my transactions, I had receipts for everything and provided that to the bank,” Ms Roscoe said.
“Everyone has to pay by card and so now there’s no other option than for the bank to see everything you are doing.”
Mortgage Choice broker Tim Leonard said “it’s Big Brother at it’s best now”.
“This has opened the doors to so many areas where the government was losing money on income tax because of cash industries,” he said.
“Pretty much every lender looks at your last three months of living expenses and now they are really critically honing in on what your day-to-day costs are.
“You can’t hide what your living expenses are.”
Nearly all retail outlets are demanding customers pay by card and not cash since the COVID-19 outbreak started including supermarket giants Coles and Woolworths.