STRIVING FOR FURTHER TRANSPARENCY - BANKS WORKING ALONGSIDE CONSUMER GROUPS ON FEE DISCLOSURE

Sydney, 8 February, 2001: The Australian Bankers’ Association (ABA) says banks have always supported the principles of transparent fee disclosure and are already examining the recommendations raised in the report from Parliamentary Inquiry into Fees on Electronic and Telephone Banking.

David Bell, Chief Executive of the Australian Bankers’ Association, said banks have already been working on initiatives to improve transparency through participation on the Australian Securities and Investment Commission (ASIC) Transaction Fee Disclosure Working Group.

Mr Bell said:

• banks have agreed that customers using an ATM which does not belong to their own bank should know at the point of transaction whether they will be charged a fee;
• three banks have already announced they will inform customers of this information by a message at the ATM;
• alongside consumer groups, banks are working to produce the ASIC Guide to Good Transaction Fee Disclosure Practices to be produced in the first half of this year;
• Banks are expected to adopt the Guide’s suggestions such as providing more fee information such as statements detailing a breakdown of fees for the services used by the customers, for example, transactions at Automatic Teller Machines (ATMs), telephone or Internet banking. Some banks already provide this service for their customers.

Mr Bell said real time fee disclosure would be possible in the future as technology develops but it should be driven by customer demand.

"For many customers, real time fee disclosure is not an issue because up to three-quarters of customers do not pay any fees on personal transaction accounts, including ATMs.

"Banks would have to spend hundreds of millions of dollars to make their systems real time and if the introduction was rushed it could lead to a slow response time on ATMs."

Mr Bell said banks strongly oppose Senator Conroy’s call for a moratorium on fees, which completely contradicts the principles of the Wallis Inquiry report into the Australian financial system which had bipartisan support. The Wallis Inquiry Report confirmed that competition was the best mechanism to deliver benefits to bank customers and the wider economy.

"The calls for price control would be a backward step, damaging Australia’s international economic credentials as evidence shows that price control of competitive industries helps destroy innovation and productivity. De-regulation has provided bank customers with lower interest margins and more product choice."

Mr Bell said the aim of the ASIC Transaction Fee Disclosure Working Group is to provide customers with the opportunity to better understand the fee structures applying to their accounts so they can make more informed choices.