The Sunday Mail
THE excesses of profiteering-minded businesses, which became more than apparent during Zimbabwe’s hyperinflationary era, still abound.
It seems at every turn businesses are prepared to cheat an unsuspecting public. The revelations that were made in our August 7, 2016 issue of pension and insurance firms that were holding on to crucial data that is needed to assess whether pensioners and policyholders were not prejudiced in the conversations that were made after 2009 – when Zimbabwe switched from the Zimbabwe dollar to the multicurrency system – have largely been interpreted to mean that there is something that is definitely amiss. Quite clearly, there was everything wrong in pensioners being given token payments that could barely afford a plastic bag of groceries as lump sum payouts for lifelong pension savings.
Whether or not pension companies did this wittingly or unwittingly, is the business of the commission of enquiry set up by President Mugabe to decide.
It is comforting that Government has taken the initiative to restore the principles of natural justice in this regard.
But it does not have to take the intervention of the highest office in the land for consumers to be protected from predatory businesses. For quite some time, the conduct of local banks and mobile telecommunication companies has been questionable, especially when it comes to suspicious billing and extortionate pricing structures. And for a long time, it seems consumers have been getting the short end of the stick. For example, it took Econet Wireless Zimbabwe, which launched its network on July 10, 1998, 12 years to migrate from the “per minute and 30 seconds thereafter” billing method to the much more reasonable per-second billing. NetOne had changed its billing method three months earlier. But it had to take the intervention of the regulator, Postal Telecommunications Regulatory Authority of Zimbabwe, to whip the companies into line.
It is therefore reasonable to argue that had Potraz not intervened, the mobile telcos were prepared to continue molesting hapless subscribers.
It is important to note that Potraz only gave the directive after incessant lobbying from the market.
So, put simply, for the 12 years that mobile telcos had been operating before the directive, consumers were liable to pay the full costs of a minute-worth of voice calls even in circumstances where the call dropped due to poor network coverage.
It did not stop there.
Consumers continue to complain about constantly disappearing credit from mobile accounts. Although various excuses have been proffered, ranging from the type of the smartphone used and applications running in the background, it does not make sense in cases where this only affects one network provider – even in instances where the same smartphone is used. Even to the unintelligible subscriber it stinks to the high heavens. Consumers continue to complain endlessly of being cheated of their valuable air time. However, Potraz – assuming that even they, too, are not affected – has not been moved. If mobile telecommunication companies are bad, banks are worse. In an environment where cash is scarce and most people are being shepherded to use plastic money, the charges have become extortionate.
It boggles the mind why a depositor should be charged US$8 for withdrawing US$400. It is equally worrying why the monthly account maintenance fee has to be pegged at US$9,22. Also, why does a stop order facility of US$31,50 attract a stop order charge of US$4. This adds up to close to US$20, or R280.
All this is for one month.
One doesn’t have to consider “nuisance” charges for POS purchases, which can range from USc50 to about US$3 per transaction. So, in these circumstances, who is the ultimate beneficiary of plastic money?
Of course, such a system is pervasive on the local market simply because banks have become heavily reliant on non-core business. Banks have to earn most of their revenues from interest income, which is interest charged on money that is loaned out to the market.
But local banks are not lending.
In other words, banks are not playing their intermediary role of allocating resources to sectors that need them the most as expected. In essence, depositors are being punished because financial institutions are not prepared to lend.
It is as absurd as it is immoral. Given an option, many depositors will rather not bank their money, or use plastic money.
A pillow or wardrobe will not charge an extra cost and it is worth the risk.
Where is the RBZ in all this?
NMB’s recent move of opening accounts that do not attract service charges is a step in the right direction. Other banks should follow suit. As recent history would show, moral suasion is not quite a useful tool against predatory banks. There are countless depositors that are grieving as they are still to access their hard-earned money from collapsed banks.
However, former directors, having afforded themselves golden parachutes from these collapsed institutions, do not suffer such inconveniences.
Government, through its regulatory arms, should therefore intervene to protect the interests of vulnerable consumers.
- Feedback: [email protected]
