Kiwis Pay Significantly More than Aussies in Default Fees

13 March 2013

Kiwis Pay Significantly More than Aussies in Default Fees

New Zealand customers pay substantially more than their Aussie counterparts for bank default fees. This is despite New Zealand’s four major banks being owned by the same companies operating in Australia.

Fair Play on Fees spokesperson Andrew Hooker says the figures released today reveal that the banks in New Zealand, which are owned by Australians, have decided to take advantage of their Kiwi customers. “I think New Zealand customers deserve an explanation.”

New Zealanders are typically charged around $15 for going into overdraft, bouncing a cheque or paying a credit card late.

Mr Hooker said that all of the big four banks were charging a hefty trans-tasman surcharge. “The cost of a bounced cheque with the ANZ, ASB or Westpac is, on average, double the fee charged by their parent companies in Australia. If you pay your BNZ credit card late you’re slugged for $15 when the same thing costs $6.25 with their Australian owner, NAB.”

The table below outlines the fee differences between New Zealand and Australia.

Recent regulatory changes in Australia have forced the Australian banks to phase out credit card over-limit fees altogether. These fees are costing Kiwis an average of $18.

Hooker says banks will continue to charge New Zealanders excessive fees if action is not taken. “The banks have been happy to charge Kiwis so far. There’s no stopping them charging these fees in future if something isn’t done. Kiwis will continue to pay too much.”

Mr Hooker attributed the difference in fee levels to the class action which has been running in Australia over the past three years, and the accompanying campaign by consumer and community action groups. “What we saw in Australia is that when everyone stands up to the banks, things change. The fees they’re charging in Australia are still too high, but it’s a lot better than what we’re dealing with here.”

“The arbitrary difference between these fees in New Zealand and Australia highlights just how little they have to do with the true cost of the transactions to the bank. We’re being charged $15 or $20 for something that is costing the banks just a few cents.”

Fair Play on Fees launched a class action campaign on Monday, encouraging Kiwis to sign up and join a legal fight to recoup fees lost over the past six years. Already, over 16,000 New Zealanders have registered on the Fair Play on Fees website.

The legal action is being led by New Zealand lawyer Andrew Hooker, Australian class action experts Slater & Gordon and litigation funder Litigation Lending Services (NZ).

Australian/NZ Bank Fees comparison
The below table, prepared from publically available information, details default fees for a standard personal deposit account or credit card with the relevant bank in New Zealand and Australia. These tables are provided for the purpose of illustrating the claims against the banks, and do not constitute financial advice. All figures are expressed in New Zealand dollars.
ANZ
NZ AU
Unarranged Overdraft Fee $15.00 per month $7.50 per day (up to $75 per month)
Dishonoured Cheque $20.00 $7.50
Unpaid bill payment $7.50 $7.50
Credit Card Late Payment Fee $15.00 $25.00
Credit Card over-limit fee $15.00 $0 to $25.00

ASB/Commonwealth
NZ AU
Monthly Unarranged Overdraft Fee (Unarranged Overdrafts exceeding $20.00) $10.00 (minimum) NA
Overdrawing approval fee NA $12.50
Dishonoured Cheque $20.00 $6.25
Unpaid automatic payment/bill payment/IRD payment/direct debit $20.00 $6.25
Credit Card Late Payment Fee $15.00 $25.00
Credit Card over-limit fee $20.00 $0 to $12.50

BNZ/NAB
NZ AU
Monthly Unarranged Overdraft Fee (for overdrawn balances greater than $20) $10.00 NA
Honour fee NA NA
Dishonour fee NA NA
Credit Card Late Payment Fee $15.00 $6.25
Credit Card over-limit fee $20.00 NA

Westpac
NZ AU
Monthly Unarranged Overdraft Fee $15.00 NA
Honour Fee NA $0 to $11.25
Dishonour Fee $19.00 $0 to $11.25
AP payment failed fee $19.00 $0 to $11.25
Credit Card Late Payment Fee $15.00 $11.25
Credit Card over-limit fee $15.00 $0 to $11.25

New Zealanders can join the action against unfair bank fees by registering at www.fairplayonfees.co.nz.

END

About Andrew Hooker
Andrew is an Auckland based lawyer specialising in civil litigation. He has more than 20 years’ experience in litigation. His current practice largely involves representing customers against their insurance companies.

About Slater & Gordon
Slater & Gordon is Australia’s largest consumer law firm. For 75 years, Slaters have been standing up for the rights of ordinary working people, not big companies. Slater & Gordon have been pioneers in Australian class actions over the past 25 years. They will be lending their expertise in tough, large-scale litigation to this case as legal advisors.

About Litigation Lending Services (NZ)
Litigation Lending Services (NZ) Limited is a litigation funding firm which will provide financial support to the case. Its parent company, Litigation Lending Services Limited, has been operating for over 13 years in both Australia and New Zealand. Having established itself funding general commercial claims, the company has expanded over the past five years and has also funded a number of successful class actions.

© Scoop Media