BANK SECRECY.

Hokitika Guardian, 31 July 1923, Page 3

BANK SECRECY.

(Hanker, in Daily Mail)

Mr Justice Avory has just decided that h hank is. under certain conditions, justified in revealing to a third party the state ot a nistoinri s a< count.

This decision has aroused a great deal of interest and even consternation. Business people are wondering how far this kind of thing can he allowed to

There is, however, no cause fur alarm. The hanking protession is quite as jealous ol its reputation for maintaining secrecy as arc the legal or medical professions. The customers’ affairs are regarded as sacred.

There are tunes, however, when a hanker docs divulge an opinion regarding a customer. It is now an old-ost-tablished custom for business firms to make inquiries regarding the credit and standing of others. These inquiries are made through the respective hankers and the replies are guarded and do not give detail--. Bankers’ references are also usually required when new tenants enter into occupation ol fiats or houses. In giving an opinion a hanker has to be very careful. li he gives one which is too favourable and misleads the inquirer he is liable for damages. On the other hand, if he gave one which erred in the other direction his customer would bring an action.

With regard to overilral Is, it a man has been called upon to repay money lie owes the hank and refuses to make a settlement the hank is entitled lo take steps to enforce payment. Tho man, of course, would have no legal or moral right to accuse the hanker of breach of confidence. Banks are conservative institutions. Quill pons are still to he found oil the counters of some of flic older branches in the AVest End, and the telephone was not in general use, even in London hanks, until the war period. The adoption of the telephone has brought quite a number of new problems with regard lo maintaining confidence. Customers, almost, invariably women, do not hesitate to ring up and ask for their balance or some other private information. It is, except in rare instances, quite impossible'for the hanker to he certain that it is the customer speaking, so in most cases the information must he refused.

Tl will readily he seen that the praetiie of giving confidential information over the telephone is a dangerous one. and if allowed lo develop would lead to grave abuse. All kinds of unauthorised persons would ring tin and obtain information to which they have no right. Another of the irouhles that have come with the telephone i:- the man who, having taken a. customer's cheque rings up the hank lo ask whether it will be met. Not the slightest information. is ever given in such eases.