Exit fees reversal threat to better banking
CHOICE SAYS REFORMS TO BENEFIT CONSUMERS MUST GO AHEAD
Calls to block the ban on mortgage exit fees could wipe out a key step towards a better banking sector, says consumer watchdog CHOICE. While the ban is due to come into effect from 1 July, it can still be reversed by a majority in the Federal Parliament.
“We are faced with the situation where real progress towards a more competitive banking sector could be overturned before it even comes into effect,” said CHOICE Head of Campaigns Matt Levey.
“Removing exit fees will pressure lenders to compete on up-front price and customer service, or else face the risk of customers moving their money to get a better deal. This is about giving power back to the most important people in Australia’s banking sector - consumers.”
Recent days have seen mortgage brokers and a small number of non-bank lenders step up their calls to reverse the exit fee reform, but CHOICE believes these arguments are misguided.
“Business models based around trapping consumers in uncompetitive deals through complex and costly fees have no place in a reformed banking sector,” said Mr Levey.
“We have spoken to smaller lenders who already charge minimal exit fees or else are making arrangements to accommodate these changes. This is no time to retreat from genuine reform.”
CHOICE has strongly supported the banning of mortgage exit fees as part of our Better Banking Campaign.
Read CHOICE’s full action plan for a more competitive and consumer-friendly banking sector at: http://www.choice.com.au/bankingreport.aspx
• Matt Levey, Head of Campaigns, CHOICE: 0488 214 066
• Ingrid Just, Head of Media, CHOICE: 0430 172 669