09.Campaign news reports
CHOICE responds to Senate Economics Committee report
CHOICE welcomes key aspects of the Senate Economics Committee report tabled in Parliament today but calls on government to take further steps to cut banking fees and improve customer service.
In particular, the report overlooks recommendations in CHOICE’s Better Banking report that we believe are crucial to aligning the banking sector with the legitimate needs and priorities of consumers.
“There are places where the banks need to go further than this report, especially on ATM fees, the introduction of portable account numbers and improved customer service,” says CHOICE Director of Campaigns and Communications, Christopher Zinn. “There also must be no retreat from the abolition of mortgage exit fees.”
However, we applaud the Committee’s recommendation that banks be made to justify lending rate increases above the RBA rate with verifiable evidence that the extra increase was necessary. “CHOICE welcomes the Committee’s call to prise open the ‘big black box’ of the banks’ decision-making on interest rates,” Mr Zinn says. “The ‘Big Four’ regularly protest they are only passing on the higher costs of borrowing from overseas. But as we’ve seen just this week, their profits are heading through the stratosphere, so let’s apply some scrutiny and see if their arguments really hold water.”
CHOICE also supports the Committee’s push to reduce the massive complexity around many financial products, and to increase requirements for clear, no-nonsense disclosure documents that will allow consumers to compare products.
“The Committee’s report reinforces some of the key reforms CHOICE has been calling for through our Better Banking Campaign, including through making switching banks easier, using the same model that operates in some European countries, and making lenders mortgage insurance far more flexible,” said Zinn.
CHOICE has worked closely with government, regulators and the industry itself in forging a new path for banking in Australia – one that puts customer service above bank profits and removes obstacles to fair play between banks and customers. The Committee’s report addresses many of these issues and we commend the bulk of its recommendations, but further steps must be taken to ensure Australian consumers get the banking service they deserve and that the Australian banking sector should rightly deliver.
Government announces banking reform package
On Sunday 12 December 2010, Treasurer Wayne Swan announced the government's banking reform package.
CHOICE welcomes aspects of the package, including initiatives that would make it easier for consumers to switch financial institutions and measures that would help smaller lenders challenge the big four - two key moves which CHOICE has long argued would help drive competition in banking.
However CHOICE regards the Government's reforms as only the beginning of a longer process of wide-ranging reform. CHOICE calls on banks to show strong leadership in making sure reform initiatives are turned into effective action that makes a real difference to ordinary Australians.
CHOICE will keep the pressure on the Government, and you can too. Send an email to Treasurer Wayne Swan* to make sure he follows through on his promise to make switching banks easier.
*If email link does not work, please copy and paste the following text into an email and send to Wayne.Swan.MP@aph.gov.au
Dear Mr Swan,
Thank you for listening to consumer concerns about the banking industry as you move forward with the Government's banking reform package. While I appreciate the plans are a good starting point for a much-needed shake up of the sector, I am concerned that measures to make it easier for consumers to switch banks may not happen anytime soon.
I urge you to find more immediate steps to take the hassle out of switching. I support CHOICE proposals that consumers wanting to move to a new bank should only have to sign a single form at their new bank that guarantees the speedy transfer of all their direct debits and credits from their old bank.
As one of the many whom you are encouraging to shop around to get a better bank deal, I implore you not to 'ditch the easier switch'.
Compare, Ditch & Switch
On Monday 6 December, CHOICE launched our bank comparison website Compare, Ditch & Switch in Martin Place in Sydney. See the photos from the launch, and go to the site to see if you can get a better deal on your mortgage, savings, transaction, or credit card accounts.