Competition needed to rein in bank charges
Rising bank charges are out of hand, and the only pressure that major banks will respond to is competition from a Kiwi bank, Deputy Prime Minister and Alliance leader Jim Anderton said today.
Meanwhile he says it may be time to require banks to disclose the amount a customer will be charged when they make a withdrawal or deposit.
The ANZ has announced steep new charges, including fifty cents to use another bank's ATM on top the normal forty cent ATM fee; A $5.00 fee to set up automatic payments; and a $20 fee on top of penalty interest for failing to pay the minimum credit card balance. The fee for branch cash services is also being increased by 50%, to $3.
"These are changes most likely to hurt small customers. The bank is driving them away. New Zealanders need a bank that wants their business: A kiwi bank.
"I find it remarkable that the ANZ has advised customers to keep fees down to $1.50 a week by making only two electronic transactions a week. That is a prehistoric attitude to New Zealanders' lifestyles. The ANZ itself admits that the typical customer withdraws cash from an ATM about three times a week, makes three or four automatic payments, uses EFT-POS frequently and makes at least a weekly phone-banking call.
"It's as though they are putting up a sign outside the bank saying, 'We are a modern electronically-equipped banking system. Please do not use us. It is financially disastrous.'
"I have safety concerns about the banks effectively telling the elderly to carry large amounts of cash around with them to pay their bills. I have written to my colleague the Minister of Police asking whether the police would be happy with it."
Jim Anderton says banking is virtually the only industry where it is almost impossible for a customer to find out in advance how much they will be charged for using a service.
Other countries are already moving to force banks to disclose their charges. Bills before the United States Congress propose ‘clear and conspicuous’ disclosure of ATM surcharges on ATM screens. Consumer groups are also actively promoting the proposal across the Tasman.
“The technology exists for
banks to tell customers through an ATM how much money they
have in their account. It must therefore also exist for
banks to tell customers how much they are being charged for
the privilege of using the ATM. Where customers get a
limited number of free transactions, they should also be
told how many they have left."