PHILIPSBURG--Regional CIBC FirstCaribbean Bank clients have received notice of outsourcing of particular functions and changes to conditions, which were described in a Barbadian newspaper as a "bombshell." The bank swiftly reacted to the news via its Website to address customer concerns.
The bank stated that the letter "is not a notice of any impending wide-scale changes to fees or interest rates, but speaks generally to the possibility of future changes" and that "centralised processing of client transactions ... is standard" in the industry.
Attempts to reach local bank management proved futile, but the few customers The Daily Herald could reach said they had not received notice of any changes. In line with industry standards, any changes become effective 30 days after notification.
However, one lawyer contacted by this newspaper pointed out that contracts could not just be changed unilaterally. "That requires authorisation from the other party," wrote Wim van Sambeek in an e-mail from The Netherlands. "In really exceptional circumstances you can – simply put – request a change. But even then the principle stands that agreements should be kept."
The article by Nation News dated November 14 said the bank was "about to hit thousands of its customers with a dramatic change in their relationship." Customers reportedly received notice that the bank would "outsource all lending, account and client information from all its banks in the region to third parties in another country, who will now be processing it."
In addition, the bank said it wanted to change all the contractual arrangements that clients originally had signed, to allow the bank to "unilaterally change any of the terms of [your] account opening agreement or any other of its agreement with [you] applicable to interest rates, fees, charges, or overdraft limits at any time in the future; and such changes will be deemed to have been unequivocally accepted by [you]."
The article further quoted a letter concerning fees, signed by Managing Director for retail, wealth, businesses and international banking Mark St. Hill: "The bank may change applicable fees, charges, overdraft limits at any time in the future and notify [you] by any means of public or private notification." After 30 days, changes will have been deemed "unequivocally accepted" by customers.
The bank issued a news release dated the same day on its Website to address concerns resulting from its letters to clients.
"All accounts opened after 2007 are already signatories to this agreement – the correspondence was sent to customers whose accounts were opened prior to 2007 and is designed to bring these account agreements up-to-date in line with the account mandate..."
FirstCaribbean said the letter was "not a notice of any impending wide-scale changes to fees or interest rates," and that "fees are reviewed at intervals and are adjusted – upwards or downwards – in line with a number of conditions within a particular jurisdiction. Should there be an adjustment to any fees or rates in the future, this would of course be done with the appropriate notice to both our regulators and our customers, as is customary."
Addressing the outsourcing concern, the bank said this had been approved by regulators and was necessary to improve "efficiency in delivering quality banking services." It was not clear to what regulators the bank was referring.
"There is no change to the way our customers operate or access their accounts. Their funds remain accessible through the usual customer channels..." It further stated that centralised processing, "including through third parties, is standard across financial institutions and other companies, both inside the Caribbean and beyond."
It could not be ascertained whether the Central Bank of Curaçao and Sint Maarten would accept a similar outsourcing under its jurisdiction. Officials of the bank could not be reached for comment yesterday afternoon.
FirstCaribbean Bank assured that "information will be accessed by a highly trained, competent workforce who adheres to the highest standards of confidentiality" and that it made "every reasonable effort to prevent unauthorised use, sharing, loss or theft of information."