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.
2004
- 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.
2005
- 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.
2006
- NAB and ANZ cut some penalty fees on concession card accounts.
2007
- 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.
2008
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Adelaide Bank and HSBC awarded a
Shonky Award for inward cheque dishonour fees — both subsequently remove these penalties.
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Westpac removes penalties on basic bank account.
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CHOICE calls on ANZ and Commonwealth Bank to stop gouging low-income customers with penalty fees on their concession accounts.
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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.
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CHOICE provides penalty fee evidence to federal parliament.
2009
- 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.
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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.
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Westpac and St George reduce penalties to $9 and Commonwealth reduces penalties to $5-$25. But we think these fee cuts could be better.
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NAB scraps all penalty fees on transaction accounts.
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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.
2010
Will the ‘perfect’ transaction account be launched – with no everyday or monthly fees, no penalties and paying reasonable interest?