Home loan fact sheet shadow shop

The results of our key facts sheet shadow shop were unpleasantly surprising.
 
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01.Poor results

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We shadow-shopped over 15 bank and credit union branches, and discovered that bank staff have little or no idea that the key facts sheets for home loans even exist.

The new year should have got off to a good start for people looking for a home loan, thanks to the government’s banking reforms. 

And, as a key recommendation of the CHOICE Better Banking campaign, banks are now required to provide consumers with a key facts sheet when enquiring about a home loan. 

However, consumers need to ask for one – and it’s this catch that is already proving difficult. The purpose of this one-page summary is to make it easy to compare loans, fees and ongoing costs rather than struggling through a variety of different brochures, handouts and information provided by each financial institution you visit. 

What the CHOICE shadow shop revealed

We decided to put this to the test. Four shadow shoppers visited 18 bank and credit union branches in a variety of locations in Sydney between mid-January and early February. 

All posed as a first-home buyer looking to borrow about $300,000, and asked if they could be provided with comparative fee and interest information they could take away, without using the phrase “key fact sheet”. 

The results were unpleasantly surprising. Of the 18 branches visited, only one was able to provide our shadow shopper the key fact sheet and this was only after they asked four times.

Here are some examples of the documentation the Big Four banks gave our shadow shoppers to take home. ANZ was the only institution to provide a key facts sheet.

At two branches the shadow shoppers were turned away and asked to call to make an appointment, while at another a bank staffer said she’d heard of some kind of fact sheet but didn’t think it was available yet. 

One wrote out the details of the various home loans on a piece of paper (branded with an insurance company and not the bank in question), while others seemed to be far more interested in getting our shoppers into a pre-approval situation for a loan. 

One of our shadow shoppers was even asked if she planned on having children as she discussed the loan process but still didn’t receive a key fact sheet. While most of the institutions we visited do provide key fact sheets on their websites, overall it seems that bank staff have little or no idea the fact sheets even exist. 

A spokesperson from ASIC, the regulator responsible for policing key fact sheets, told us it’s “monitoring compliance with the new reforms by looking at individual complaints and industry-wide conduct.” 

“It seems the last thing the big banks want to do is help consumers compare products,” says CHOICE head of campaigns, Matt Levey. “We don’t think consumers should have to come up with three magic words – key fact sheets – to get access to clear information to help them find the best mortgage offer.”

For more information about Mortgages, see our Borrowing section.

 
 

 

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