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Raymond Pryce | New era of thievery

Published:Friday | February 10, 2023 | 12:36 AM
Aerial image of Stocks and Securities Limited office
Aerial image of Stocks and Securities Limited office
Raymond Pryce
Raymond Pryce
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Some years ago, serving as director of research, information and communication at the Consumer Affairs Commission, I used the platform of the Consumer Education Programme to place issues of cybercrime, identity theft and the invisible presence of intra bank fraud as modern risks to the Jamaican consumer.

The then leadership of the commission thought such matters to be outside of the core mandate of the commission. Since then, consumers have witnessed the increased autonomy of individual banks setting fees and other charges to manage funds consumers place with their institutions.

Back then I had also sounded the ‘abeng’ that for some customers, monthly bank charges could equal or surpass income tax charges (especially among the category of worker who were below the income tax threshold). That was also rejected, as was the banking fees bill that would subsequently be tabled by South St Catherine MP Fitz Jackson, himself a former minister of finance at the time I served at the Consumer Affairs Commission.

Almost 10 years later the knowledge, behaviour, attitudes and practice of the Jamaican consumer have not improved with respect to financial literacy or even basic understanding of how to protect against phishing and being more involved in monitoring their deposits and investments in our financial institutions. Worse, there is no arm of the government with the explicit mandate to provide financial education to the Jamaican people.

POST FINSAC SAFEGUARDS

The assumption that the bruising experiences of the early to mid-nineties and the raft of FINSAC era changes had somehow made the financial sector impregnable is now up for debate. Perhaps for a while it was true. However, the matters that have been unfolding before our eyes since the so-called SSL fraud matter came to public attention reveal a different story.

While all is not yet known, the response of the Financial Services Commission will be a lesson in what not to do for sometime to come. The calls from the prime minister that people should be careful with how they use information re the matter is one thing. Minister Nigel Clarke’s remarks at a press conference that we should not “nationalise” the matter is another. Yet, Messeurs Holness and Clarke seem not to understand that in the modern era, the absence of credible information provided in frequent and adequate doses fuels innuendo as media houses must fill the 24-hour news cycle and social media have an insatiable appetite for posts, especially when global celebrities are involved.

SLOW OUT THE BLOCKS

To make matters worse, the finance minister was slow out of the blocks. It wasn’t really until the regrettable performance of the FSC leadership at a press conference where the former head earned the indignation of the entire nation that Minister Clarke entered the fray. Then came McFarlane’s resignation. A few days later the minister would admit that he requested the resignation of the FSC head. There was also a meeting of the Securities Dealers Association ostensibly to calm any jitters. In the same period consumers received a flurry of communication from financial institutions reassuring us that our deposits were safe. For some people that had the effect of yelling “don’t panic”, while at the same time yelling “fire, fire”. Then came another presser hosted by Minister Clarke on January 23 where he outlined (at last) a raft of steps to cauterise the situation, all of which should have happened sooner and could have been better handled.

For let there be no doubt sacking the FSC head creates its own set of issues which now need to be resolved. Such as the extent of oversight of the FSC by the Ministry of Finance and the frequency of reports sent to the financial secretary by the FSC as well, as the nature of the reporting relationship between the FSC, the financial secretary and ultimately the minister of finance.

DO THE FAILSAFE SYSTEMS WORK?

The most glaring question still to be answered is whether there are failsafe systems and do they work! If the warning signs existed before the whole SSL matter became public, why didn’t the system trigger earlier? While I heed the prime minister’s caution that we shouldn’t speculate, the revelation that he closed out his accounts at SSL ahead of the storm fuels the very speculation he would have us avoid. Especially in a society and economy in which there is a culture of mistrust of the so-called ‘big man’ and the ‘system’ by the so-called ‘small man’.

In the whole saga up to this point, kudos to Nigel Clarke, who in his attempt to allay the growing fears among the people attempted to quantify the SSL holdings as a mere two per cent of the entire securities sub sector. Certainly, in the scheme of most things, two per cent is a small amount. However, if there were systemic failings within the FSC which caused the major shake-up we have now witnessed, can we be certain that the apparent fraud at the SSL only existed within the SSL. Therein lies the problem still to be addressed by the Holness administration.

Put simply, notwithstanding the assurances from the individual institutions themselves, how safe are our deposits. Because every Jamaican has been told by their granny that “you nuh see smoke without fire”, or worse “if a nuh so, a nearly so”. By now Minister Clarke must know that the country needs certitude on these matters. So, now on to the state opening of parliament and the new Budget cycle to see how this and other matters are addressed.

Raymond Pryce is the opposition spokesman on information and chairman of People’s National Party East Central St Catherine. Send feedback to columns@gleanerjm.com