Australian banks are charging Australian households six times more than the average person believes is fair, and twice as much as they think they’re actually paying, according to new research.
New research, conducted by Lonergan Research, found that on average, Australians consider a reasonable fee level for bank charges to be about $3 a month, with almost half believing they should be paying nothing at all. Australians estimate that they actually pay $8.71 in bank fees a month, however, recently released figures from the Australian Banking Association show banks collect over $4 billion in fees per year.
This equates to $19.05 per Australian aged 14+. In other words, Australians are paying more than twice as much in bank fees than they think they are, and they are paying more than six times as much as they think is reasonable.
The research was conducted among 1,026 Australians aged 18 years or older. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics. The survey found that dishonour fees (a charge imposed by banks for refusing to honour a transaction) are the biggest point of frustration for Australians, with almost half (46%) of respondents considering these fees to be unacceptable. And banks are slugging us for exceeding our credit card limit, too. However, two in five Australians (41%0 would prefer not to have the ability to overdraw their bank account, or exceed their credit limit at all.
Meanwhile, the managing director of Financial Redress, James Middleweek, says that NAB customers who believe they have been hit by excessive fees in the past should be compensated. Financial Redress is managing a series of class actions on behalf of NAB bank customers.
More than 40,000 NAB customers have so far joined the NAB Class Action, which is part of a wider group of legal actions relating to exception fees launched against eight of the major banks in Australia. The lead case, against the ANZ, is awaiting judgement in the Court of Appeal after class action members were successful in the Federal Court on late fees.
Middleweek says the survey found that 90% of respondents believe that banks should charge lower fees even if it means they’re less profitable.
“Most consumers understand the fairness of paying a reasonable fee when it reflects the bank’s costs. However, they object to being hit with an excessive fee, especially when it appears unlinked to the amount in question or the time period involved.
Most respondents would prefer not to have the ability to overdraw or go above their limit at all. And the reminder declared they would, on average, be willing to pay up to $5.70 when they overdraw, go over limit or pay a credit card late. It’s hard to believe that banks routinely used to charge customers $30 to $40 in these situations.
Some still do charge that much, and nearly all charge much more than $5.70.”
Even the safe haven in the banking world is now charging fees. A growing number of banks are charging customers to hold Swiss francs after the country’s central bank decided to collect interest on lenders’ own deposits.
Bloomberg reports that Credit Suisse Group AG plans to charge institutional customers and large corporate clients interest to hold some assets. It didn’t disclose the fees. And other Swiss banks are reportedly considering the same action.
- 90% of Australians would prefer banks to reduce their fees even if it meant they were less profitable
- Nearly all (95%) of Australians believe that where banks have been found to have changed excessive fees in the past, they should have to compensate customers.
- More than nine in 10 (92%) believe banks should only charge fees that reflect their costs.
- Almost two thirds (63%) believe bank fees should be banned outright.
- Three in 10 believe fees for exceeding a credit card limit (31%) or fees for late payment on credit card bills (30%) are unacceptable.