Households stung for $1 billion in fees
CHOICE says banks’ punitive practices must end.
CHOICE says the $961 million in unfair bank penalty fees households have been charged in the past year needs to be cut in half by this time next year or the government is going to have to do something about it.
New data released by the Reserve Bank of Australia (RBA) today shows the total fees paid by households to banks in 2008 is up by 8% to $4.845 billion. These figures have been broken down for the first time to reveal that 20% of bank fees paid by households in 2008 came from unfair bank penalty fees.
“For several years CHOICE has been calling on the RBA to detail exactly how much of banks’ profits come from penalty fees. These are the figures the banks didn’t want you to see and they’re much worse than even we expected,” said CHOICE spokesman Christopher Zinn.
“Consumers will be furious to learn that they were stung with almost $1 billion in unfair bank penalty fees last year,” said Zinn.
CHOICE says this figure is too high and must be halved by this time next year. The consumer group says banks need to act to:
- Get rid of overlimit fees on credit cards.
- Ensure no account can be overdrawn without customer authorisation.
- Review every penalty fee and make sure it reflects the true cost incurred by the bank.
CHOICE says if banks choose not to bring these fees down and limit the circumstances in which they can be charged then the government will need to act.
“The growing market dominance of the Big Four as a result of recent bank mergers means banks have customers over a barrel. This is an unacceptable situation.”
“As a result of CHOICE’s campaign against unfair bank penalty fees the banks have already made some improvements in this area but this alarming figure shows there is a long way yet to go.”