2023 Rank the Banks (and Other Lenders) Released

Rank the Banks Other Lenders and Debt Collectors

Original media release from Financial Counselling Australia (11/12/2023).

At a glance

  • Financial counsellors rated the hardship practices of the big four banks, non-major banks, non-bank lenders and debt collectors on a scale of one to 10 (1 being the lowest)
  • The big four banks are best when it comes to treating customers in financial hardship, with scores of around 7.0. Their performance has improved significantly since the first Rank the Banks survey 10 years ago
  • The non-major banks continue to underperform, with an average score of just 5
  • Non-bank lenders scored extremely poorly, with an average score of just 4
  • The major banks are effectively assisting people affected by domestic and family violence, but there is room to improve when supporting people affected by scams, people in prison and First Nations customers
  • A debt collection agency scored the highest rating of all organisations surveyed
  • The majority of lenders need to dramatically improve their hardship responses.

Financial Counselling Australia, in conjunction with the state and territory financial counselling associations, released its bi-annual Rank the Banks (and Other Lenders) survey which found the big four banks performing well, but all other lenders failing their customers in financial hardship.

The survey collates the views of financial counsellors on how the banking industry and other lenders respond to customers in financial hardship. Undertaken in late September and October 2023, 431 financial counsellors responded from every Australian state and territory for a response rate of 42 per cent.

Similar surveys were conducted in 2013, 2015, 2017 and 2019, allowing comparisons to be drawn over time. The survey is usually done bi-annually but was rescheduled to 2023 due to the COVID-induced lockdowns of 2020 and 2021.

The key findings were as follows:

  • Financial counsellors rated the big four banks well, with scores from 6.7 and 7 out of 10
  • The big four have improved vastly since the first survey in 2013 where they rated between 4.4 and 6.2
  • The non-major banks were still well below the big four, with the best rated 6.2 (Bank of SA) and the poorest 4.2 (Citibank)
  • None of the 22 non-bank lenders scored above 5. The highest-rated were Cash Converters (5.0), Wallet Wizard (5.0) and Liberty (4.9)
  • The lowest were Swoosh (2.8), Bluestone (2.9) and payday lender Cigno (3.0)
  • The highest rating (8.1) was scored by debt collection agency Credit Corp
  • While the big banks are generally doing well when assisting people affected by domestic and family violence, they need to do more to support people who are victims of scams, people in prison and First Nations people
  • Financial counsellors in remote and rural areas did not rate the major banks as highly as those working in capital or regional cities.

You can read the full report here.

Quotes from FCA acting CEO Peter Gartlan

“It is good that the major banks have continued to provide adequate support to their customers doing it tough. And it has been great to see the significant improvement over the last decade since we began Rank the Banks. Many financial counsellors noted that the major banks have well-developed hardship practices and well-trained staff who work well with financial counsellors.

“It’s been encouraging to see how the major banks have adapted practices to better support people affected by domestic and family violence, but there’s clearly work to do when it comes to scam victims and people in prison.

“As in past surveys, it is disappointing to see the non-major banks still lagging the major banks when it comes to support for people facing hardship and the failure of many of them to consistently accept third-party authorisations. The worst performers were Bendigo and Adelaide Bank, Citibank and Bankwest. Our findings suggest the non-major banks are not investing enough resources into their hardship teams and that their customers are not receiving proper hardship support.

“Some of the non-major banks are actually subsidiaries of the major banks. Where that is the case, the major bank needs to intervene to improve the hardship response of their subsidiary bank.[1]

“As for the non-bank lenders, their performance continues to be abysmal. This is particularly worrying as we know these lenders target people who are financially fragile.

“The non-bank lenders that caused the most problems for financial counsellors by rejecting their third-party authorisations were Cigno, Toyota Finance and Latitude.

“Financial counsellors are experts in financial difficulty and understand how the system works. People who are self-advocating will not have that knowledge and are likely to fare much worse. Given that financial counsellors rate so many creditors so poorly, we despair as to how people who are unrepresented are treated.

“In the current cost-of-living crisis, ASIC is appropriately focusing on the extent to which lenders comply with their financial hardship obligations and is collecting data from 30 lenders. We urge ASIC to take appropriate enforcement action if deficiencies are found.”

Lynda Edwards, who coordinates FCA’s First Nations network, said the ratings from financial counsellors with First Nations clients were of great concern.

“Lenders and financial services companies more broadly, must do more to address this situation,” Ms Edwards said. “Despite some solid progress, there’s clearly still much work to do to improve financial inclusion and understanding for First Nations people.

“Organisations need to prioritise developing culturally aware and culturally sensitive practices in their dealings with their First Nations clients. We are happy to work with these firms to do that and become more proactive in identifying First Nations clients in financial hardship.”

Mr Gartlan said: “Financial counsellors are on the front line and know which creditors are treating customers in hardship fairly and which are not. We run the bi-annual Rank the Banks (and Other Lenders) survey to tap into their first-hand knowledge. The survey identifies shortcomings and highlights room for improvement.

“The survey includes several places for financial counsellors to make qualitative comments about individual companies. These comments will be shared with those companies that request them as a way of providing direct feedback.”

Financial counsellors work in not-for-profit organisations offering free, independent and confidential advice. They do not sell anything, nor do they earn commissions. They are different to financial advisors or planners.

To contact a free and independent financial counsellor ring the National Debt Helpline on 1800 007 007.