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Exception fees trending down – the market is working for customers
Sydney, 11 September, 2008: The Australian Bankers’ Association (ABA) said the reductions in exception fees and the emergence of accounts which don’t charge these fees demonstrates the market is delivering results for bank customers.
Exception fees on consumer savings and credit card accounts include those that may be applied to dishonoured cheques, late credit card payments, overdrawn accounts and exceeded credit limits.
The ABA has published a new edition of its fact sheet noting all the changes that have occurred since it announced the initiative in May 2007 when member banks undertook to provide improved information on exception fees, in response to community debate.
Since then banks have taken a number of significant steps in relation to exception fees:
- three major banks have announced accounts which are free of exception fees;
- some banks provide discounted exception fees to low income earners;
- several banks have announced major new revisions to exception fees;
- some banks have abolished some exception fees; and
- banks have published more information about their exception fees and agreed to review exception fee terms and conditions.
The detail in relation to all the accounts and reductions can be found on the new edition of the ABA fact sheet at: www.bankers.asn.au/exceptionfees3. This fact sheet also provides comparative tables on exception fees for regular transaction accounts, for transaction accounts for eligible low-income earners and concession card holders and for credit card accounts.
David Bell, Chief Executive of the ABA, said: “The industry has come a long way in responding to community concerns regarding exception fees and demonstrates what a dynamic market is able to deliver.”
“This competitive market works so that downward pressure on fees remains but regulation can result in adverse consequences for customers.”
“This is the same market that has enabled a number of ABA member banks to provide a range of financial products that aim at financial and social inclusion, such as micro-finance products, low or no-interest credit to those on low incomes, indigenous finance and financial literacy programmes. Fees play an important role in helping to fund these initiatives.”
“It is important to understand exception fees are generally avoidable and there are ways you can help minimise their occurrence. Each bank has its own approach, which means genuine choice for the consumer,” Mr Bell concluded.
For further information:
Heather Wellard, ABA PR: Phone: 02 8298 0411 Mobile: 0409 830 439
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