here&now

2009 Annual Report available

Savings & Loans’ Annual Report for the 2008/09 year is now available on our website at savingsloans.com.au/annualreport

This is the first time that the full report has been primarily published online. A small number of members requested a hard copy of the report, and they received a shortened version.

We’ve also combined our Corporate Social Responsibility Report with the Annual Report this year, which shows the prominence that the community and environment have within Savings & Loans.

It was certainly a tough year for everyone in the finance industry, and it was no different for Savings & Loans. We’ve come through the difficult times and set a strong platform for us to build from in the future, thanks to the amazing work of our staff and the support of members. The Chairperson’s Report and CEO’s Report within the Annual Report give more detail regarding our performance, and I encourage you to read it.

If you have any questions about the information contained in the report, please post them here.

Greg

We already have a people’s bank!

An excellent idea was put forward by some economists late last week – Australia should have a financial institution that offers the same services as the big banks but operates for the good of its customers. The bank wouldn’t be forced to make extravagant profits for shareholders and would instead be focused on expanding services and keeping fees low. It would be a “People’s Bank” of sorts.

What a fantastic idea! In fact, it’s such a good idea that 126 of these financial institutions already exist – they’re Australia’s credit unions and mutual building societies.

These mutual institutions (companies that are owned by their customers, known as members) do exactly what the “People’s Bank” would be designed to do. We provide lending, savings and deposit accounts – just like the major banks – and focus on serving our members and the community rather than returning profits to shareholders – very unlike the major banks. With Savings & Loans you can even deposit funds at a Post Office without charge.

We’re overseen by the same regulatory framework as the banks and we have access to the same Government guarantees. Our members have can use one of the largest ATM networks in the country (that keeps on expanding). But the thing is, we’re not banks.

So why – when we share the same regulatory framework as the major banks – are more people moving their banking over to them? Is it an image thing? Are credit unions still not seen as safe as banks?

I’d be interested to hear your thoughts.

Greg

Code of Practice spells out obligations

Savings & Loans has joined with the other 126 credit unions and building societies in Australia to launch the Mutual Banking Code of Practice. The code spells out our responsibilities to our members and what they can expect from us.

The term ‘mutuals’ refers to organisations such as Savings & Loans that are owned by our customers (or members, as we like to call them).

The code is a pretty lengthy document but it can be summed us by the ’10 Key Promises’ that underpin it:

We will be fair and ethical in our dealings with you. This means that we’ll always act with honest and integrity and treat our members with respect whenever we interact with them.

We will focus on our members. Everything we do is designed to ultimately benefit members and provide them with friendly service and competitive products.

We will give you clear information about our products and services. We’ll provide you with everything you need to understand our products. This includes interest rates, fees and charges, as well as regular statements delivered electronically or by mail. Our advertising won’t be misleading and will explain to you how to minimise interest payments and fees.

We will be responsible lenders. This means that we won’t encourage our members to take on debt that we think will put they’ll struggle to service or repay. If someone is in financial hardship, we’ll work with them and offer assistance.

We will deliver high customer service and standards. This means that we’ll provide you with service that is reliable and give you real value. Our staff will be well trained and we’ll keep all of your personal information confidential and secure.

We will deal fairly with any complaints. If you aren’t happy with Savings & Loans, you’re free to lodge a complaint with us, which we’ll handle quickly and fairly. We’ll explain other avenues for resolving disputes if you’re not happy with our decision.

We will recognise member rights as owners. Being a mutual organisation helps set us apart from other financial institutions – this means that everyone who has an account with us is an owner. We’ll make sure that you’re kept updated with the benefits, costs and impacts of our status as a mutual, as well as reasonable proposals to change our mutual structure. (You can see our Constitution for more information on our position as a mutual.)

We will comply with our legal and industry obligations. Banking is a highly regulated industry, with rules and regulations in place to protect consumers. As a responsible institution, we will abide by all of these codes and laws.

We will recognise our impact on the wider community. Savings & Loans doesn’t exist in a vacuum – everything we do impacts the wider community somehow. We’re committed to being engaged with the community and reducing our impact on the environment.

We will support and promote the Mutual Code of Banking. This means making sure that all parts of our operations abide by the code and make sure our members are aware of it.

The explanations are my words, not the official explanations from the code.

From our point of view, not a lot will change at Savings & Loans a result of signing up to the code – it’s the same concept as our Members First Policy and Member Charter. These documents have been around in some form or another and are well and truly entrenched in how we operate.

When payday doesn’t come fast enough

I’m sure many of us have been in a situation where we wish we had a little more money to tide us over until our wages or salary goes into our account. Maybe your washing machine or fridge stops working or some other unexpected expenses come along. Some things just aren’t planned or budgeted for.

Some people in this situation turn to what are known as “payday lenders” – businesses that loan relatively small amounts of money for a short term, usually with high fees and interest rates. In fact, when some of the fees and penalties are taken into account, interest rates can sometimes top 1,000%.

Payday loans were originally designed to provide short loans for a few days (literally until the next payday) but most of these debts are carried for weeks or months. The lenders may not require the same proof of income as ‘traditional’ lenders like credit unions. Some prey on the fact that their borrowers need cash quickly and will accept huge penalties, or simply don’t understand the contract.

Media reports suggest that payday lenders are causing people to forfeit household goods such as beds and washing machines because they are unable to meet the extraordinary payments.

So what do you do if the car does need work or your fridge stops working? One option is approaching not for profit groups, who can often provide short-term loans with low (or even no) interest and fees (or if you’re a student then speak to your uni’s student association or union about options for short term loans – they’re usually happy to help out with rent, bills or books).

If you’re not studying, then there is a range of charities that provide emergency loans. It’s hard to ask for help but I’d encourage you to – you might feel embarrassed but it’s better than the payday lending alternative.

Savings & Loans is currently funding a pilot program with the Salvation Army, that is offering emergency interest-free loans if people agree to financial counselling and budgeting sessions. The program’s run through the Salvation Army, so doesn’t impact our operations or lending obligations.

And as the wider economic climate changes, more people may be tempted by the lure of payday lenders to pay loan or credit card arrangements. Don’t do it.

Savings & Loans – like all Australian credit unions, building societies and banks – is committed to helping our members if they’re having financial problems. Rather than borrowing money to meet existing commitments, call us and discuss your situation. If you lose your job or have your working hours cut, then visit a branch or call our Member Contact Centre.

We’ll talk over your situation and look at how we can work together to help you get back on top. Everyone’s situation is different and our staff will develop a plan to get you back on your feet.

Brent Hill, Senior Manager Corporate Social Responsibility

Skimming the new craze in scamming

I’m Olivia, Savings & Loans’ Senior Forensic Analyst. A big part of my job here is making sure that members are given the information and tools to help keep their money safe.

Over the past few weeks, you may have seen media reports about ‘skimmers’ being attached to ATMs to allow criminals to access people’s card details. This isn’t something that members should be particularly alarmed about, but there are a few steps that you can take to minimise the risk of your card being compromised.

First, it might be good to explain the process involved in “skimming”:

1. A magnetic card reader is attached to an ATM over the card entry slot. This captures all of the information on your card’s magnetic stripe as it’s inserted into the ATM.
2. A small camera is fitted near the ATM to record a user’s PIN after they have inserted their card.
3. The information from the magnetic card reader and the camera is transmitted to criminals.
4. The criminals manufacture a false card using the information contained on your magnetic strip and withdraw funds using the PIN recorded with the camera.

That may sound a little daunting, but there are a few simple things that you can do to help keep you safe from skimming:

1. Cover your hand whenever entering your PIN. The scammers rely on capturing your PIN to withdraw money so anything you can do to shield your hand is a step in the right direction. Remember this when using an ATM or paying via EFTPOS.
2. Look out for strange ‘add-ons’ or changes to ATMs or EFTPOS terminals. Devices vary from machine to machine but will always be near the card entry point. (Remember that Savings & Loans’ ATMs have recently changed over to rediATMs but are still as safe and secure as they’ve always been.)

If you think an ATM has been tampered with, don’t use it. Report it as soon as possible to Savings & Loans or the financial institution who owns the ATM. If you’ve already used a machine and think that someone’s tampered with it, call us straight away so we can cancel your card and have it replaced.

Remember to regularly check your accounts for any transactions you don’t recognise. If you notice anything out of the ordinary, contact Savings & Loans immediately.

You shouldn’t be worried about accessing your accounts with Savings & Loans, as long as you use some common sense. If something doesn’t seem right, call us on 13 11 82.

For more tips on keeping your money safe, visit savingsloans.com.au/security