Not yet registered?Sign upLogin

Banks Rob Customers in Profit Grab

Press Releases May 21 2006

» Download press release

Australians are being robbed by banks with exorbitant penalty fees and FAMILY FIRST will today introduce a Bill to stop the ruthless profit grab.

Low income families are hardest hit by penalty fees of up to $50 for every dishonoured periodic payment, direct debit or cheque. For some Australians, that is a third of their weekly income and a huge burden.

A 2004 report revealed some banks seize up to 16 times the cost of processing dishonoured cheques and 92 times the cost of processing dishonoured direct debit transactions.

Banks are a licence to make money. They are pocketing obscene profits while fleecing the most vulnerable Australians. Last year the NAB posted a record profit of $4.4 billion while the ANZ reaped $3.7 billion.

FAMILY FIRST’s Bill will stop fee gouging by banks by:
• Ensuring penalty fees are for cost recovery only. All fees and charges must be reasonable and reflect a fair estimate of bank costs;
• Boosting the powers of ASIC (Australian Securities and Investments Commission) to monitor fees. ASIC will also have the power to investigate customer complaints and issues referred by the Treasurer;
• Giving customers the right to sue banks for damages if they breach the ASIC Act.

Banks should help customers avoid penalty fees. They should offer credit cards that do not allow customers to exceed their limit and ensure fees appear on ATM screens and phone and Internet banking before transactions are processed so customers are warned and can cancel their transactions.

We must stop banks using penalty fees to reap even more millions.