06.The evolution of consumer banking
The past six years have seen significant developments and improvements in banking for consumers. Here are some of the highlights, improvements and wins.
- CHOICE launches the Flick Your Bank website to help people switch to the lowest cost accounts.
- The Consumer Action Law Centre (now Consumer Action) publishes groundbreaking paper on the potentially unlawful nature of penalty fees.
- The growth of so-called ‘all you can eat’ accounts, where banks offer certain transaction unlimited and fee-free for a $5-$6 monthly fee.
- NAB and ANZ cut some penalty fees on concession card accounts.
- CHOICE and Consumer Action launch Fair Fees campaign against penalties.
- ANZ’s CEO admits penalty fees are unsustainable, particularly for those who can least afford them.
- 30% of bank accounts now offer specified unlimited transactions for a monthly fee.
- NAB cuts penalties from $50 to $30.
- Westpac is given a CHOICE Shonky Award for penalty fees of up to $50; Commonwealth Bank was also criticised for continuing to
apply $35 penalties on concession accounts.
- Dutch-owned Rabobank enters the market, increasing online saving account competition.
Adelaide Bank and HSBC awarded a Shonky Award
for inward cheque dishonour fees — both subsequently remove these penalties.
Westpac removes penalties on basic bank account.
CHOICE calls on ANZ and Commonwealth Bank to stop gouging low-income customers with penalty fees on their concession accounts.
Bankwest launches the Hero account, paying 5% interest, charging no monthly fee and offering fee-free transactions. But the bank’s penalties remained among the highest – $50 for dishonours and $45 each time accounts are overdrawn, up to a maximum of $135 per day.
CHOICE provides penalty fee evidence to federal parliament.
- Successful CHOICE campaign against banks charging consumers a fee to use other banks’ ATMs – this ‘double dipping’ fee is dropped by all banks.
- The big banks get bigger, with the merger of Westpac and St George, and Commonwealth Bank’s takeover of Bankwest. CHOICE publicly opposes these mergers.
RBA data reveals for the first time the impact of penalty fees on households; $961 million in 2008, including $490 million in deposit account penalties.
Westpac and St George reduce penalties to $9 and Commonwealth reduces penalties to $5-$25. But we think these fee cuts could be better.
NAB scraps all penalty fees on transaction accounts.
ANZ cuts dishonour and overdrawn account fees to $6 per day.
- Bankwest’s penalties are reduced to $15 and a safety limit is introduced. Bankwest also launches the Zero account, rebating foreign ATM fees from machines owned by the Big Four banks and St George.
- CHOICE research finds mutuals societies win hands down for customer satisfaction.
- ING Direct launches Orange Everyday, an account with no everyday fees or penalties, and innovative bonuses.
- NAB cuts its $5 monthly fee for Classic Banking.
- Citibank drops its $5 monthly account fee on its Plus Transaction account for all customers, not just those depositing $2000 per month.
Will the ‘perfect’ transaction account be launched – with no everyday or monthly fees, no penalties and paying reasonable interest?