Aussies urged ‘to be on their guard’ for unsolicited bank loan offers as cost of living bites
Major banks are targeting customers with personal loan products that would allow them to keep splashing cash as the RBA desperately tries to rein in spending.
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Major banks are targeting customers with personal loan products that would allow them to keep splashing cash as the Reserve Bank desperately tries to rein in spending.
Consumers have been warned to “be on their guard” to make sure their financial situation would not be made worse by new loan offers, as the cost of living squeezes everyday Aussies.
Marketing communications to some Commonwealth Bank of Australia customers seen by the Herald Sun spruiks unsolicited conditional approval for a personal loan.
“No matter your goal, whether it’s your next set of wheels, to simplify your existing finances or even that next getaway – we’ve got something to suit you,” it states.
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It comes as RBA governor Philip Lowe faces intensifying pressure amid the steepest ever raising of the cash rate over nine consecutive months to 3.35 per cent in February.
The RBA’s mechanism for curbing inflation is raising the cash rate to limit further spending.
Canstar Editor at Large Effie Zahos said it was unsurprising to see a rise in the marketing of financial products including personal loans, credit cards and buy now, pay later schemes.
“When things get hard, it’s a perfect marketing opportunity, isn’t it?,” she said.
“It does not surprise me when people get into more financial hardship as the cost of living rises for products to come out, for lack of a better word, to help people get out of it.
“Consumers really need to take care.”
Ms Zahos said some of these products could be helpful if they allowed consumers to consolidate debts and pay less interest, but others might “be tempted to spend more”.
“Consumers need to be on their guard — don’t get overexcited, don’t think ‘oh, how special I am’; understand it’s a marketing offer,” Ms Zahos said.
“Do your own research and ask yourself ‘do I need it, or is it just going to add to my financial pressures?”
Australian Securities and Investments Commission Moneysmart spokesperson Andrew Dadswell said some forms of lending had bans on unsolicited offers, including “credit cards and small amount credit contracts”, but not all forms of credit were restricted by these.
“Firstly, we would recommend checking that the unsolicited offer is legitimate. This would involve speaking with the bank via contact numbers or chats on their website, rather than clicking on any links in an email. This action helps reduce the risk of scam activity,” he said.
“If the offer is legitimate and the consumer wanted to go ahead with the loan, the bank will need to fulfil its responsible lending obligations, including by making inquiries about requirements and objectives to take up the credit and also ensure that the loan is affordable to the consumer.”
A CBA spokesperson said customers could opt out of receiving this kind of communication if they chose.
“We know cost of living concerns are top of mind for many Australians right now and we have a range of support available for customers,” they said.
“When it comes to communication around new offers and products, we will share these from time to time with select customers within the target market of each product.”
Offers are understood to be shared with customers in line with a bank’s Target Market Determination (TMD), which is required by law.
If a customer applies for a loan or credit product, they then go through credit checks and an affordability assessment to satisfy responsible lending obligations.
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