Safeguarding Consumer Rights In Investment Banking
Today we can hear a number of consumer rights violations by banks in various realms including investment banking. Not only small banks and unknown names get involved in these kinds of scams, at times we hear of even popular names such as CIB Bank gets into hot waters by engaging in fraudulent activities.
Lately there was an incident reported of a customer of CIB Bank of Intesa Sanpaolo who had apparently requested the bank to sell his share of CIB Real Estate Funds. The request for this transaction was made through internet banking system last year, November 2008. The bank for some reason failed to execute the transaction and this has lead to a great loss to the customer because of the blockage of trading using the funds from PSZAF.
The bank has agreed its mistake to the customer but this correspondence took place over the phone in which the bank has agreed to pay for the loss to the customer. The customer used CIB Bank telebanking system to lodge his complaint. Though the bank has agreed to pay for the loss over the phone, it did not honor its own words. The bank did not stand up to its own promise but they listed various reasons why the bank will not be compensating. The customer that suffered loss sought help from BBT, which stands for Budapest Conciliatory Council. Listening to the customer’s case BBT ordered the CIB Bank to purchase the investment on the price of the funds as of 24 November 2008. This order from BBT was issues on June 2009.
Despite the order from BBT, CIB Bank of Intesa Sanpaolo did not buy the investment bonds until Apr 2009. This has resulted in a significant loss to the customer and the loss suffered by the customer was 21% for not mistake of his. Consumer rights are very clearly violated and the customer who invested in the bank’s real estate funds thinking that his savings will bring better yield was not only disappointed but also wronged. The bank did not credit the amount until April 2009. Besides this, CIB Real Estate Fund of Funds was advertised in a highly misleading manner until June 2009.
All these have lead to the featuring of CIB Bank in the BBT Shame List. BBT shame list includes companies and institutions that fail to act ethically and companies that fail to honor the decrees of BBT. By failing to honor the decrees of BBT, CIB Bank has shown a total disregard towards their customers.
It becomes very difficult for customers to find reliable partners to make investments when banks those are to offer trustworthy services to people fail to fulfill their responsibility. The unworthy behavior of a single institution will raise serious doubts in the minds of the people about the other institutions including banks. No one would like to see his or her hard-earned money and their savings to be lost by the irresponsible behavior of their bank.
