background information
The Dirk Scheringa Bank (DSB) is a commercial bank in the Netherlands that received bad publicity, because of selling expensive and unnecessary life insurance policies as a compulsory part of mortgage loans. Many customers have found themselves in financial difficulties as a result. To help those victims, Pieter Lakeman established a foundation with the aim to collectively help those people.
On the first of October 2009 chairman Pieter Lakeman was invited in a Television show to tell his story about the damage that is caused by the DSB. According to Lakeman the best thing for all customers of the DSB to do, is to withdraw their money on their saving accounts. So, he incited account holders of the DSB to withdraw all their money in order to cause bankruptcy for the DSB. Shortly after this message, a run on the DSB was happening. After a few days, this finally caused a declaration of bankruptcy.
The question rises whether Pieter Lakeman (representing only a small group of people) is allowed to purposely cause a bankruptcy of a firm that represents thousands of people taken into account that DSB claims to be on the good way and trying to arrange financial support for people that faced financial difficulties caused by selling expensive financial products.
It seems to be morally permissible that Lakeman acted this way, since most people will benefit from it. Furthermore as a general principle, DSB should not sell products with such a significant financial risk for the customers. On the other side, DSB was acting within the boundaries of the law and received a banking permit by the Dutch Central Bank. Customers that became ‘victim’ of DSB didn’t read the conditions of the loan well. Therefore, it can be also be stated that those persons where the victims of their own unawareness and dragging DSB into a bankruptcy is therefore wrong.
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3 comments:
I agree with the writer about action of Lakeman. He gave an advise to the customers of DSB to withdraw their money. By doing this, he acted morally right. He protected the clients of DSB, because if they would wait they would loose more money due to the upcoming bankruptcy according to him.
DSB had a big social responsibility as a bank in the Netherlands. It is true that the customers have their own responsibility to read the conditions in the contract, but DSB should have mentioned this in the first place. The content of these contracts are against the functional perspective of the business discourse. They suppress anti-social instincts, which leads to unstable social institutions. Markets need trust and this is not guaranteed when doing business like DSB did.
So DSB acted morally wrong. Legally they were on the edge and from the business perspective they acted also wrong.
ANR: 536273
First of all, it is debatable whether Pieter Lakeman did purposely cause the bankruptcy of the DSB. He gave advise to those people who had accounts at this bank. The result of his advise caused bankruptcy. He did however intentionally advise customers of the DSB. Which could be considered morally wrong, since he knew his advise could evoke a run on the bank, which could potentially lead to bankruptcy.
As to whether the downfall of the DSB can be considered morally right, it largely depends to which end balance between beneficiaries and victims of the bankruptcy tips. If more people benefit, it could be considered morally right. If more people were victimized, it might have been morally for customers to start a run on their money causing the bank to go bankrupt.
Customers of the DBS deliberately engaged in doing business with this bank. When you consider loans or mortgages it is important you are fully aware of all terms and conditions. If you neglect to carefully familiarize yourself with them, you, yourself are to be held accountable for your mistakes. Therefore, as long as the company practiced within the boundaries of the law, and fully disclosed all conditions, it cannot considered wrong they sold financial products which bore a high risk. It seems however the bank did charge higher interest on mortgages than they were allowed to. They thereby violated the moral principal to adhere to the discourse of the law and truthfulness.
Selling products with significant hidden financial risks could however be considered morally wrong. It seems the DSB did only partially notify customers of the risks. Some of their products did have hidden provisions, the customers were not made aware of. These provisions in itself may not be considered wrong, not notifying customers however, definitely is. As it turns out, the company intentionally sold financial risky products, and therefore acted morally wrong.
ANR: 516159
If you really know the proper ethics of business, surely you will have a successful business. I have known so many businessmen, and many of their businesses turned out to be successful because they really know how to manage everything. International small business loans group do help those who want to venture into the world of business. It will really help them make a start when it comes to putting up a business.
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