Council welcomes Interest rates drops, but bank charges still a concern

17/07/2009 12:01

The Consumer Council welcomes the Australia and New Zealand (ANZ) Banking Group’s reductions of interest rates on lending products.

While, the Council does welcome interest rates reductions by the banks, it however wishes to reiterate long-held consumer concerns over bank fees and charges, which affect a much larger percentage of consumers than use banks for various reasons other than just to take loans.

Reduction in interest rates directly benefits those who have the financial credentials to access loans. It is that larger category of retail customers such as the ordinary weekly wage earner, etc, who the Council is concerned about because of the numerous bank fees and charges that they incur on a regular basis. These fees and charges may be in small amounts, but to the ordinary person it can accumulate to the point that banking becomes more of a burden than a convenience.

For example, one bank charges its customers 30 cents for electronic withdrawals from its own ATM. One though that electronic banking is supposed to decrease costs for banks and consequently remove costly queues and paper withdrawals for consumers. Bank customers are charged for both ATM and paper withdrawals, which does not make any sense. Another unreasonable charge by one bank is the “$5.00 per sheet” for special request for issue of statements on a daily, weekly, monthly etc, basis. How would a consumer know exactly how many sheets her/she is paying until she gets the sheet and is charged at source? Also, there is a ridiculous “$1.00 per page” photocopying fee, when it is well know that photocopying does not cost more than 20 cents per page. This appears to be revenue-generating exercise outside the business of banking.

Many other fees and charges drain consumers off their hard-earned money such as account maintenance fee, ATM mini statements, funds transfer, balance inquiry, EFTPOS fees, withdrawal fees, inoperable fees, minimum balance fees, etc. These are the charges that matter more to the majority of consumers.

The Council would welcome any effort by the banks to reduce these fees and charges in light of devaluation and the current difficult economic environment.

We must not forget that for 2008, the two largest commercial banks in Fiji, ANZ and Westpac, announced enormous profits of $42million and $47.4million after-tax respectively. In 2007, ANZ announced a profit before tax of $33million and Westpac a profit of $31.9million.

To have consumer choice and receive quality banking and financial services, consumers need to consider what services are offered and what fees are charged by each bank. It is for this reason the Council is encouraging consumers to do bank shopping before deciding to settle for any one of the banks.

Furthermore, the Council urges the Reserve Bank of Fiji’s Compliance Unit to scrutinise the banks for the numerous fees and charges that they are imposing on customers and whether these are justified.