There is more to life than money, but money certainly seems to be the most entertaining subject, so we're going to spend a little more time around it - especially now when it is about as scarce as morals in government. This weeks lesson is brought to us courtesy of ABSA - Today Tomorrow Together - a slogan which they take awfully seriously as we will see shortly.

Lesson Number One. Your banker EXPECTS you to negotiate a limited surety instead of blindly signing an unlimited surety - so don't feel shy. Let me explain.

A few weeks ago I published an article about a friend having a few problems with ABSA. If you missed it you can see the entire article by clicking here. The story so far - Colin closed his firm in 1999; paid the bank everything they asked of him [about R55,000 altogether]; and walked away confident that he had met his obligations. [The outstanding R11,000 was to be paid by his 50% partner.] Colin omitted to get his surety cancelled in writing, and when last we looked he was being sued for R165,000!

The reality - as fast as Colin was paying the bank back, they were repaying the liquidator. Their repayment to the liquidator was a genuine transaction - these were funds that were erroneously deposited into the closed firms account. Bottom line - Colin is back in the firing line after three years for the R165,000 and his bank sees no moral reason to back off. They have got the paper, it seems pretty legal, and it's full steam ahead chaps.

But here is the real lesson [the aforegoing paragraphs were just to get you in the mood]. In a letter to Colin his bank says:
Paragraph 15 of the suretyship clearly states that if the paragraph is filled in, the surety's individual liability will be limited. In our opinion it was an option that should have been exercised if your intention was to limit your suretyship obligation.

[The small grey font is my special touch to add authenticity to this statement - which you will understand if you have ever seen a bank surety!]

Now I don't know about you, but this seems a clear invitation to negotiate at the time of signature. It suggests that you should take this 24 paragraph document away with you to study in depth before carefully amending it to protect yourself. One feels confident, reading this comment, that your banker will anxiously enquire after your mental well being prior to your signature. He wants you to be happy with this document.

At least that's the way I read it! But I find that it doesn't quite gel with the experience we all have when we are forced to sign these dreadful agreements. You know what I mean. The surety is only unveiled right at the end of the negotiations; usually strategically placed deep in the pile of documents awaiting your signature. And often this is the first time it is mentioned!

And God help you if you dare - timidly - to enquire as to whether this might be a negotiable issue, or whether you might amend it to limit it in some small way to, for example, only extend as far as the SA National Debt. "Impossible" they say, "Head Office will not allow it!" or "Everybody signs it!" or "It's our standard contract."

And if you ask for an explanation of the Latin bits, nobody in the Greater Metropolitan area has a clue what "excussion" or "errore calculi" or "shoshaloza" means - but please sign it because we're a bit of a hurry, and there are many more victims [oops, valued clients] right outside the door.

And "No Sir, I'm afraid you can't take that home to read, because we're on a deadline."

Maybe it's just me, but the featured paragraph above from Head Office doesn't quite gel with the branch experience that we small business owners face daily. Maybe someone senior should share this generous consultative approach with the staff at the front line?

Bottom line, it's a hell of a lot easier to fight this document BEFORE you sign than afterwards. [That's a polite way of suggesting that you should not sign them at all.]

Lesson Number Two. Don't pay your bank when they ask. It's better to wait until they sue. Let me explain.

At the time his business closed Colin simply paid the bank the amounts he was asked for. Actually, it wasn't that simple because the R55,000 cost him blood to find. Remember that he didn't have a job at this time. His partner didn't pay anything, although a small ceded policy was cashed in to offer a small contribution.

Despite this inequity in their contributions thus far, they're both being sued for the same amount now.

I am not that bright but there is a glaring lesson right here. Do not pay when they ask - pay when they sue. That's what their behaviour screams. If Colin had told them to depart forthwith 3 years ago he would be so much better off by now. He would have earned interest on his money; he would be in a better negotiating position; and he would face the bank on an equal footing with his partner; and the past few years could have immensely more pleasurable as he invested his money in the local brewery instead of his bank.

So lets forget the polite talk about integrity because you can only understand that concept if you have some. And dare I suggest that your average banker does a great job of faking it. Having worked for a bank I know how little they trust their own staff with your money - so they sure as heck aren't going to trust you with your money.

Today Tomorrow Together. You don't need to worry, they'll find you. Which is why I've decided to give them back my ABSA credit card - the only ABSA product I use. Who knows when they might want to find me? It's not the world's biggest protest, but it's the biggest I can muster. Not much point in also giving ABSA my FNB credit card, is there?

And in closing, some immortal words from a German philosopher: If you want to get rich, don't rob a bank. Start a bank!

© Peter Carruthers, www.petesweekly.co.za

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