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I lost my husband to cancer ten years ago. Shortly before he died I bought him a farm, which he greatly enjoyed with my stepson. The local banker who wrote our mortgage, (and also owned the real estate company which sold us the farm), became very friendly with the two of them. My husband told me that he wanted the banker to be a part of our family, help raise his son after he was gone.

After my husband’s death the banker was very friendly, and very pushy, wanting to marry me, take care of the farm, help make my husband’s dreams come true, etc. Foolishly I trusted him — (and started dating him). He went on a spending spree with my money and created enormous problems for me.

Every deadbeat who was behind on loans at his bank, every person he needed to curry favor with, ended up with some of my money. I had to fire them all and redo everything from scratch. The worst was that he authorised all sorts of construction work on my home without consulting me first — then I got hit with the bill. The work was faulty and it cost me over $300,000.00 to fix the problems.

He also misrepresented me in real estate transactions, costing me quite a bit of money.

At one point he didn’t want to pay interest on my CDs at his bank, (which he inherited from his father). A little intervention from the father finally got me my money back, but not without legal intervention.

I am told by a lawyer that there is nothing I can do because there is no ‘banker’s code of ethics’ against dating a client: as doctors and lawyers have.

I know I was a very foolish, very naive, distraught widow. Do I have any options ?

Thanks for taking the time to read this.

A reader asks:

“What if any makes the difference between SIVs and Enron?” 

What do you think? Aren’t both approaches both simply to hide the true condition of the underlying accounts?

I have often contemplated the reason why large commercial financial organisations seem to treat customers suffering from debt problems with apparent contempt.

Taking all of the emotion out of the argument it just seems to me that banks are missing a great commercial opportunity to be seen as ‘the good guys’ for a change if they were to implement responsible and compassionate debtor friendly collection policies.

Banks spend millions each year on attracting new customers. By working with those relatively small numbers of clients that fall into financial difficulties a ’smart’ bank could pull a major PR coup by having a demonstrably caring policy of going out of their way to help and retain such customers in their time of need.

I once thought that the UK Co-Operative Bank may choose to live up to their ‘ethical bank’ slogan and implement such a strategy. This has never materialized however and their claim to be more ‘ethical’ than their competitors certainly does not seem to extend to their policy of working with indebted clients as they are no different than the larger banks in reality.

I would be very interested to read the views of other readers as to why they believe that banks seem to uniformly treat people with debt problems as second rate citizens.

Erik asks us the following question for our opinion on this situation.

Is it ethical for Banks to let your checking account go negative in order to charge and profit from NSF fees?  

From a purely business standpoint I see why this is such a profit center.  A good percentage of people get into a financial bind from time to time. Unforeseen auto repairs, medical expenses, etc… but, the extent in which the banks charge these fees can make it almost impossible to recover from a financial issue.  

For instance I had an emergency medical issue which tapped my checking account.  The payment was posted to my account immediately putting me a few dollars negative.  in the next few days charges made previous to the incident began to post.  Things like a cup of coffee at starbucks, dry cleaning, etc. Small charges.  

Yet I incurred a $31 NSF fee for everyone costing me an additional $310 dollars on top of the negative balance.  $310 dollars for charges totaling less that $50 dollars?  This kick them while there down philosophy  in my opinion is unethical.  What are your feelings on this issue? Are there alternatives to traditional banking?