01.NAB drops unfair fees
CHOICE and the Consumer Action Law Centre (CALC) congratulate the National Australia Bank (NAB) for showing leadership by scrapping penalty fees for customers who overdraw or incur dishonours on their transaction accounts.
NAB announced today that from October it will drop its fees for overdrawing personal transaction and savings accounts, setting a strong example for the other big banks.
“The NAB has abolished these unfair fees because they know how unhappy it makes their customers. This is a victory for customers who have made their voices heard,” said CHOICE Campaign and Policy Director, Gordon Renouf.
“Last year consumers paid banks almost a billion dollars in unfair penatly fees. While we’re pleased with NAB’s announcement, the other banks need to follow its lead and scrap these fees.”
ANZ, Westpac and the Commonwealth Bank have stated they are reviewing their fee structures.
The fees to be scrapped currently affect 700,000 NAB customers, and generate the most customer complaints to the bank of any other fee and the most complaints for any one matter, according to the bank’s head of personal banking, Lisa Gray. “We hear their stories every day – a customer’s pay goes in a day late, gym fees or an insurance premium comes out early,” she said. “Most of our customers who experience these fees don’t think it’s fair.”
NAB’s move is a significant nail in the coffin for these type of charges, according to both CHOICE and CALC, which have run a joint Fair Fees campaign for the past two years. Such penalties can be up to $50 for bank customers who overdraw their accounts, often through electronic direct debit payments.
Renouf argued the fees far outweigh the costs incurred by the banks when customers go over their limit or pay late. “The only fair solution is to scrap these penalty fees altogether – on credit cards as well as transaction accounts,” he said.
Since the launch of the Fair Fees campaign, tens of thousands of bank customers have downloaded a complaint letter to challenge their banks to refund unfair penalty fees. “We encourage consumers who are unhappy with fees they’ve been charged to challenge them by contacting their bank by phone or using our standard form letter.”
See our Fair Fees campaign