ABSIP calls for an investigation into claims against banks and insurance companies that over-charge black customers

The Association of Black Securities and Investment Professionals (ABSIP) has called for an investigation into South African banks and insurance companies accused of perpetuating apartheid-era socio-economic imbalances by charging black customers exorbitant interest rates and insurance premiums.

ABSIP’s comment followed South African Broadcasting Corporation’s Special Assignment expose which showed that thousands of black home owners believe banks, particularly First National Bank, have discriminated against them when it took over their mortgage loans from the now defunct Saambou many years ago.

Black customers told the programme that more than 4 000 bank customers were charged 30% more than white customers on mortgage loans, and the bank had refused to refund them. Likewise, it was reported recently that black and white customers called an insurer to request quotations for insurance and provided identical details (age, location, car make and model, driver’s licence tenure etc), yet the quotation of the black customer came out significantly higher.

“The recent claims of discrimination against black customers cannot be tolerated. This matter needs to be investigated, clients refunded, fair lending and insurance policies introduced and applied, and discrimination based on colour or of any kind must end. Ethics must reign in the banking and insurance industries. Where else are black customers being taken for a ride? We must find out”, said Sibongiseni Mbatha, President of ABSIP.

“These allegations reflect structural economic imbalances that still exist and need to be resolved. ABSIP demands an investigation into why this discrepancy has dragged on for years. Relevant bodies such as the Banking Association of South Africa, South African Insurance Association, Financial Sector Conduct Authority, Ombudsman for Banking Services, Ombudsmen for Short Term and Long Term Insurance and others should launch an investigation into these discriminatory practices,” said Mbatha.

Mbatha said ABSIP will continue advocating for a transformed, fully inclusive, ethically run financial sector that equitably represents black professionals and black business to enable sustainable growth for the sector and South Africa at large.