The Language Barrier in Banking Documents – The Bank's Special Liability to Guide the Perplexed

Abstract

Banking documents are characterized by linguistic complexity and multifaceted content. The display of the information is problematic as well: The documents are long, printed in small and dense letters with almost no spaces between the lines. Essential issues are hidden among immaterial sections and do not get the attention they deserve. Additionally, in order to make a banking transaction, the customer is often asked to sign a few separate forms, including confusing annexes and additions.

This linguistic failure creates informational inequality between the bank and the customer, and causes a serious obstacle to customers in the performance of their banking transaction: Without a full understanding of the transaction, they are not able to properly estimate its repercussions and risks. In order to protect the customer, it is proposed to impose a broad legal liability on the bank. This liability includes the obligation to make any banking agreement in writing; the obligation to highlight certain details of the contract and to draw attention thereto; the obligation to translate the text for customers who do not speak the local language; the obligation to provide full oral explanation about the transaction; and the obligation to make sure that the customer understands its full repercussions.

The justification for imposing such a broad responsibility on the bank lies in the perception of the bank-customer relationship as a special relationship, based on the trust and confidence that the customer bestows in the bank. The broadening of the bank's liability is compatible with the modern approach of corporate social responsibility and is aimed to create a banking culture of fairness and integrity.

Keywords: bank-customer relationship, banking documents, explanation, translation, language barrier, semiotics

JEL Classification: G21, G28, K23, Z00