Norway’s biggest bank, DNB, was having to fend off more serious challenges to its reputation this week. The bank now faces huge compensation claims from state consumer advocates and accusations of engaging in social dumping, while it also scores very low in customer satisfaction and even has angered the prime minister of Lithuania.
DNB, in which the Norwegian state owns a 34 percent stake, is not having a good year. It was just a few months ago that it was publicly embarrassed in the “Panama Papers” case, after leaked documents from a Panamanian law firm revealed its involvement with tax havens on behalf of “private banking” customers. That led to the bank being chastised by both state government officials and other major investors, including the state pension fund with its 6 percent stake.
Then came publication of a free e-book admittedly written in anger by author Agnar Lirhus. He was in an uproar over the Panama Papers revelations and also had his own complaints about DNB’s ethics and its response to the scandal. “I’m furious with DNB,” Lirhus told newspaper Dagsavisen in April, who titled his book Bytt bank! (Switch banks!). “They’ll only listen (to customer complaints) if more customers desert them.”
In early May, newspaper Dagens Næringsliv (DN) reported that DNB landed at the bottom of business school BI’s annual ranking of Norwegian banks in terms of customer satisfaction. Around 9,000 customers and 182 companies were surveyed between January and March, and DNB scored only 66.8 out of 100 possible points. The industry average was 74.9.
“I can well understand that DNB scored badly, it’s pure and simple a bad bank,” customer Carsten M Syvertsen told DN. Syvertsen, who has a PhD in economics and is an assistant professor the College of Østfold, was stuck in a long line of customers inside the lobby of one of DNB’s few remaining branches in Oslo, when DN interviewed him, and his online banking system had failed him once again. Another customer waiting in line complained that the bank seemed unable to help her transfer income from abroad to Norway.
A prime minister’s rebuke, and consumer council complaint
Then came more complaints from DNB customers in Lithuania, who ended up with large debts instead of expected earnings after they had put money into savings products offered by DNB Lituaen. Among them, reported Dagsavisen, is Ramunas Bogdanas, a former freedom fighter with high-level connections in Norway who’s credited with sowing good relations between Norway and Lithuania when it broke away from the Soviet Union. Now he faces losing his home because of debt piled up on what was supposed to be a savings instrument. It contained risks, though, and in May, on an official visit to Norway, Lithuanian Prime Minister Algirdas Butkevicius told Dagsavisen that court cases have shown that DNB didn’t inform customers about the risks “in a correct manner.”
A Norwegian court ordered DNB to compensate a Norwegian customer who also suffered losses, and Lithuanians think they deserve compensation as well. DNB hasn’t wanted to comment on specific cases or those where court action is pending. Lithuanian authorities, meanwhile, have been ordered to regulate DNB and other banks more closely.
This week came news that Norway’s consumer council Forbrukerrådet was moving forward with a lawsuit against DNB on behalf of around 150,000 customers that the council claims collectively paid NOK 690 million too much in fees to DNB. The council already warned legal action targeting one of DNB’s savings funds, DNB Norge, in January. Now it’s expanded the complaint to include “DNB Norge I” and “Avanse Norge.” The council claims the case will be Norway’s largest class-action lawsuit ever. DNB has rejected the complaints and the case is expected to come up in court next year.
Excessive overtime complaints
Norwegian Broadcasting (NRK) also reported this week about how DNB has been using Indian high-tech consultants, hired in through the Indian firm Tata Consultancy Services, who allegedly have been working as long as 14- to 16-hour days at DNB, and thereby violating Norwegian labour law. NRK has been told by people within the bank that the Indian consultants “are at work when we arrive and still there when we leave,” and that they’ve also been working seven days a week, also on public holidays. They’re working on DNB’s new payment system called Vipps, which, to make matters worse, was not functioning Wednesday night or through much of Thursday.
NRK reported Wednesday that Norwegian labour authorities at Arbeidstilsynet are now investigating DNB’s Vipps team, and large Norwegian labour unions are raising concerns of social dumping. “If it’s true that the Indians are working 14-16 hours a day in DNB’s offices, this is aggravated social dumping,” Jan Olav Andersen of the labour organization El og IT-forbundet, told NRK.
DNB’s hard-pressed information director Even Westerveld has been fending off complaints against DNB for months. He has claimed that DNB took the Panama Papers case seriously and noted how top bank official apologized for the state-owned bank’s involvment with tax havens. He said he could understand the negative reaction of customers like author Agnar Lirhus, “and that they’re disappointed when we make mistakes.” He has said the bank is working hard at becoming more transparent.
Westerveld has also allowed that “it’s of course not a desirable situation” to be sued by the consumer council, but he claims the bank sees no foundation for the claims and otherwise can’t comment on individual cases.
In the case of the Indian workers, he wouldn’t allow NRK’s reporting team to see where the Indians were working, take photos or interview them. “Those who work for DNB shall not work too much, and we follow that up with our suppliers on a routine basis,” Westerveld told NRK.
Westerveld suggested that NRK’s sources may be in error about the long work hours. “An exhausted IT workers doesn’t do a good job,” he said. “But when folks sit on the job for a long time, it doesn’t necessarily mean it’s all work time. These are folks who also have a social life here in DNB, with friends from India.”
Others have suggested the Indian workers are “driven by ambition” and “don’t dare” complain about long work days for fear of jeopardizing their chance to have an international career.
Officials at Tata in Oslo wouldn’t respond to questions from NRK, referring them to Tata’s Nordic communications director in Finland. He admitted that days can be long, “especially at the end of a project, but when our folks in Norway work overtime they are compensated in line with Norwegian law.”
That’s what the labour authorities will now attempt to confirm. DNB said there are around 300-400 information technology workers in DNB’s main office at Bjørvika in Oslo who’ve been hired in through outside suppliers, sometimes as many as 600.
“This is undoubtedly another big dent in DNB’s reputation,” Elisabeth Hartmann, a public relations expert and head of Siste skrik kommunikasjon in Oslo. “They need to repair this quickly, otherwise it will turn into much larger damage.” Peggy Brønn, a professor at Norwegian Business School BI, said she was beginning to wonder whether DNB had lost internal control.
“Folks are beginning to expect negative publicity around DNB,” Brønn told NRK. “This hasn’t so much to do with their products but with their management. Norwegians won’t tolerate this sort of thing, and DNB should be really scared about losing customers.”
Westerveld told DNB on Thursday that the bank would launch its own investigation into the claims now probed by labour authorities. “Therefore we’ve asked for an overview of work schedules etc from our supplier.”