Sydney, 19 June, 2007: The Australian Bankers’ Association (ABA) today reminded consumers that exception fees can be avoided and encouraged them to monitor their accounts to avoid incurring fees.

The ABA was responding to a joint media release from Choice and the Consumer Action Law Centre regarding a campaign on exception fees.

Exception fees on personal accounts include dishonours, credit card late payment, account overdrawn and credit limit excess fees.

David Bell, Chief Executive of the ABA, said: “Exception fees are avoidable and we would encourage customers to check their account balances via an ATM, Internet banking, or on the telephone if they are not sure of their account balances before making a transaction. Banks provide information that helps customers monitor their account balances and keep track of payments.”

“Some banks already offer selected accounts for eligible customers which don’t charge exception fees or which reduce the cost of these fees. The average price paid for an exception fee on a credit card account is $30,” he said.

Mr Bell said the timing of this campaign was surprising because the banking industry has committed to providing the community more information on exception fees following discussions with the Australian Securities and Investments Commission (ASIC).

“It is interesting that this campaign has been launched just ten days before ABA member banks were due to publish information about their own policies and products including how they affect customers in relation to the charging of exception fees. The ABA is also going to complete a fact sheet at the end of July.”

“As other financial service providers such as credit unions, building societies and other non-bank lenders also charge exception fees, bank customers will soon be better able to compare what their bank is offering with what these other financial services companies offer. ABA member banks want customers to have real choice when considering these fees.”

The two consumer groups are claiming these fees are ‘penalties’ and therefore unenforceable but only a court is able to make that judgment on the facts of each case.  The ABA believes that it is irresponsible to make sweeping allegations about the legality of all fees.

It is important to note that the average unit cost of banking services has declined as transaction volumes continue to outpace fee revenue. Australian bank customers are driving down the average price of banking services by choosing low-cost options for everyday transactions such as the $5 a month ‘all you can eat’ bank accounts.

Notes for editors

The ABA issued a media statement on exception fees on 11 May 2007. Below is the summary of that announcement:

In the interests of further disclosure:

• ABA member banks will publish information about their own policies and products including how they affect customers in relation to the charging of exception fees. This information will be published by end June, 2007;
• by end July, the ABA will publish an industry fact sheet which describes each of those member banks’ approaches and how bank customers can modify their behaviour to avoid or minimise the incidence of these fees;
• by end July, ABA member banks will review their own terms and conditions on relevant products.