Barbados Today

Not under the Fair Trading Commission’s (FTC) watch!

That stern warning has been sent to FirstCaribbean International Bank by the FTC’s Director of Consumer Protection Judy Maynard in response to the financial institution’s controversial move to make unilateral changes to its agreement with customers.

Maynard told Barbados TODAY in a candid interview this morning that the proposed changes were unfair under the law and therefore unenforceable.

She said correspondence to that effect had already been sent to the bank, which is a subsidiary of the Canadian Imperial Bank of Commerce (CIBC).

“A letter was hand delivered to FirstCaribbean on Friday, November 14, informing them that this matter is of utmost [importance]. Consumer protection is paramount to consumers and because it is [also] paramount to the commission we have to ensure that the rights granted to consumers under the Consumer Protection Act are not eroded,” she said, adding that after evaluating the terms, the FTC had informed FirstCaribbean to “address this matter”.

“This is a matter that we are looking into and we are going to continue to be vigilant with respect to this and any other person that brings terms and conditions or anything of this nature that can affect consumer welfare.”

In notices sent to some of its customers last week, FirstCaribbean set a December 31 deadline for its clients to agree to changes that would give the bank unilateral control over all applicable interest rates, fees, charges and overdraft limits; allow the bank to share and process information on customer accounts outside of Barbados in its consolidated centres or with its third party processors; and prevent customers from holding the bank “by reason of any act, delay or omission of such CIBC FirstCaribbean Group member or any third party service provider in the performance of the services required of it”.

The bank, which operates in 17 Caribbean territories, said the changes would take effect on January 1, 2015 and customers’ failure to consent could lead to immediate termination of their FirstCaribbean banking services.

In a second statement on Friday, the bank stressed that all customers who opened accounts after 2007 had already agreed to the controversial terms.

However, Maynard insisted that “FirstCaribbean can do nothing with it”, adding that any terms that were deemed unfair under the law had “no teeth and no bite”.

“It cannot already apply to customers because if you look at it, they speak about it beginning in January 2015. If the terms are unfair under the law they are unenforceable in a court of law, and FirstCaribbean has been told that any term that has been deemed unfair under the Consumer Protection Act is unenforceable in a court of law,” Maynard said.

“The consumers need not fear their rights are not being protected.”

When contacted, representatives from the Central Bank of Barbados, the regulatory body for the financial system, opted not to comment on the matter.

marlonmadden@barbadostoday.bb