Sydney, 11 May, 2007: The Australian Bankers’ Association (ABA) and member banks will provide the community more information on exception fees. There has been extensive community debate regarding these 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: “For markets to work well, consumers need to be well informed when making decisions, including selection of products and the way they operate their accounts. The ABA supports competitive fee offerings by individual member banks and we believe that market-based outcomes best benefit bank customers.”
The ABA believes it would be helpful to increase community understanding about exception fees. 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.
Some banks already offer selected accounts for eligible customers receiving Government benefits which don’t charge exception fees or which reduce the cost of the exception fee.
The ABA has had discussions with the Australian Securities and Investments Commission (ASIC) regarding exception fees. ASIC has informed the ABA that it welcomes the ABA proposal, and that it will be closely monitoring developments with the aim of ensuring the level of disclosure to customers of all financial institutions about these fees is both adequate and effective.
Mr Bell said: “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.”
“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.”
“Australian banks are highly regulated and disclose their fees to customers in a variety of ways including published fee tables and through information services. These disclosures are mandated by legislation and under the ABA’s Code of Banking Practice and must be provided before a customer takes up the banking service.”
For further information:
Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439