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Struggling Families Stung By Punishing Bank Fees

Press Releases September 17 2008

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LOW income earners and struggling families are being stung by exorbitant bank penalty fees and the Rudd Government should act to protect these vulnerable people, Family First Leader Senator Steve Fielding said today.

Families have nowhere to turn when they are slugged by outrageous bank penalty fees, which is why Family First wants to ensure penalty fees are for cost recovery rather than a blatant profit grab.

“The Rudd Government has done nothing to help families struggling to pay bank penalty fees of up to $50 a pop,” Senator Fielding said.

“Families are being ripped-off by outrageous bank penalty fees that are way above bank costs, with some low income families paying as much as 20% of their weekly income on penalty fees.”

The Senate Economics Committee tabled a report into Family First’s Fair Bank and Credit Card Fees Bill 2008 yesterday.

“Family First has an action plan that the Rudd Government should take up, with amendment if necessary, to protect families from outrageous bank penalty fees.”
Family First’s plan is to stop banks slugging customers with outrageous bank penalty fees on their accounts and credit cards by:

• Ensuring penalty fees are for cost recovery only;
• Boosting the powers of the Australian Securities and Investments Commission to monitor fees, investigate complaints and to demand information to ensure fees reflect costs;
• Outlawing inward cheque dishonour fees and charging multiple fees for the same mistake;
• Stopping penalty fees charged just because another bank charge has pushed the customer over or under the necessary bank balance;
• Preventing penalty fees for customers exceeding their credit card limit where the bank does not give customers the option of a solid maximum credit limit.

“Some banks are charging penalty fees which are up to 92 times the cost of processing the customer’s mistake. It’s just a blatant, greedy grab for profits by the big banks.” Senator Fielding said.