UK CRUICKSHANK REPORT IS WRONG ON BANK FEES Sydney, 18 June, 2001: The Australian Bankers' Association's Chief Executive David Bell says claims made by the UK Cruickshank report are wrong on the amount of bank fees paid by Australians and how Australia compares internationally with other banking sectors. Claims that Australians pay $360 a year on bank fees are wrong Claims made over the weekend that Australians pay $360 per year on banking are incorrect. This figure was based upon a UK study released over two years ago and is flawed in a number of respects. Official Australian Bureau of Statistics (ABS) statistics shows that Australians – on average – pay between 25c nd $2.30 a week for personal transaction accounts. The Reserve Bank has published results of a study that showed Australia is significantly under the international average in terms of fees and charges on personal transaction accounts. UK Cruickshank Study Wrong The Cruickshank report is flawed because its surveys did not take into account that between 30 - 75% of customers (depending on service provider) do not pay fees and charges for services associated with personal transaction accounts. The report was also based upon unrealistic usage patterns. Average Bank Fees Paid - Australian Bureau of Statistics The Australian Bureau of Statistics (ABS) found in its 1989/99 Household Expenditure Survey that the average Australian household pays $102 per year for a full-range of banking services, including fees on transactions, home-loans and savings accounts which is equivalent to $44 per year for an individual. Also the ABS found, low-income households (income of $300 or less a week) are estimated to pay $41.60 per year for the full-range of banking services (or per individual $27 pa/ 50 cents per week). This data is supported by ABA surveys into average fees paid. International Comparisons - Reserve Bank of Australia As part of its investigation into bank fees in Australia, the Reserve Bank published a survey by McKinsey and Company, that showed Australian consumers pay significantly less in fees on personal transaction accounts than the international average. The RBA report also noted the wide-range of fee exemptions and discounts available to Australian consumers, particularly the low-income groups of pensioners, people with disabilities and students. Allegation that banks hide fees from customers NSW Fair Trading Minister, John Watkins, claimed on a 2UE radio program on Sunday that banks hide fees from customers. Mr Watkins provided no evidence for this statement. If he has evidence of this activity, he should refer it to the Australian Securities and Investment Commission (ASIC) for immediate investigation. For further information contact: Heather Wellard ABA PR Phone: 02 8298 0411 Mobile: 0409 830 439     ENDS