Unlike in Hollywood movies, in real life, sometimes it’s hard to tell the good guys from the bad guys. When there are banks involved, it is usually the big, wealthy financial institution that is the evil character, using its market power to generate billions of dollars of profits for greedy shareholders and their fat-cat executives. In some cases, this characterisation is entirely accurate, for example, the banking industries use of penalty fees for a decade was an abuse of market power directed largely toward unsophisticated and powerless customers.

But sometimes, the Goliath isn’t always totally wrong, and David isn’t always completely innocent. This however, wasn’t the view taken by Fairfax’s Walkley-award winning, crack investigative duo of Nick McKenzie and Richard Baker who continued their investigation into the practices of ANZ Bank, claiming that the bank had been “illegally by harassing debtors and seizing money from their accounts in breach of consumer laws”.

Baker and McKenzie also stated that ANZ had breached consumer laws and its own guidelines through instances of “phone harassment and the inappropriate issuing of legal threats and default notices to debtors who had already agreed to make a repayment or faced financial hardship”.

The article then noted that “the breaches may be systemic and fuelled by a relentless drive to maximise debtor repayments”.

Funnily enough — maximising debtor repayments is exactly what banks do. If they didn’t, they would be out of business pretty soon, along with billions of dollars of shareholders, depositors and taxpayer monies.

So the “villain” in the story isn’t always the bank employee, but rather, the debtor who has borrowed money and refused to pay it back. In simple terms, when someone takes out credit on an unsecured basis (for example, through a credit card or personal loan), they agree to make repayments based on a contract — a legally enforceable promise. Had they not made such a promise, the lender would not have lent them the money in the first place — instead, they would have lent the money to someone else or invested it in a less risky investment.

While the circumstances of individual debtor may no doubt change (in many instances, through bad luck (illness) or bad management) this doesn’t change the fact that the borrower made a legally enforceable promise to repay the debt at a certain time.

ANZ (or any bank) undertakes a set process for debts. An initial polite reminder, followed by a written letter — eventually, if the debtor continues to ignore their obligations, the lender is forced to take harsher action — possibly undertaking bankruptcy proceedings.

Given the volume of transactions undertaken, there would no doubt be instances in which the banks (or their debt-collectors) have over-stepped the boundaries of what is ethical or legal in some instances. And undue coercion or harassment of debtors, especially for relatively trifling sums, is not only unnecessarily harsh and unethical, but is also unlikely to serve a substantial benefit to the lender in any case.

But too often borrowers (be it individuals or even business) consider credit to be some sort of divine right. It is this attitude that has led to Australian leveraging itself into a housing bubble (mortgage debt has risen from 30% to 90% of GDP in a little more than a decade) and why Australia has one of the highest levels of private debt globally (higher than even the United States).

Debt, like capital or labour, is a scarce resource — it is the role of banks to ensure that debt is allocated efficiently. Banks unfortunately get it wrong and when they do, have a responsibility to shareholders and the community as a whole to rectify their errors and minimise bad debts. While banks must undertake this process in a fair and ethical manner, they are not solely responsible for borrowers breaching their legal and moral obligation to repay a debt that is legally owing.