Australian Government Cracks Down on Bank Fee Gouging
The Australian Government in a press release today signaled its intention to crack down on companies that use dubious methods to raise revenue such as excessive credit card surcharges and non-descript ‘transaction fees’.
Australians will certainly be familiar with the extraordinary amount of fee gouging that major banks and financial institutions have resorted to over the past decade, from exorbitant ATM transaction fees ($2.50 to withdraw money or check your balance) to vaguely defined, morally questionable transaction fees appearing on every kind of account, often without adequate customer notice.
Assistant Treasurer David Bradbury said in a press release he wants consumers to be on the lookout for such unethical gouging and report any such suspect activity to the Commonwealth Consumer Affairs Advisory Council (CCAAC). The CCAAC have created a survey specifically for reporting suspected unethical fee gouging, available until 21 June 2013. The survey is available here.
In particular, the Consumer Affairs Advisory Council would like consumers to report on fees that fit the criteria of being ‘excessively high’ and ‘not transparent’. So if a credit card provider is charging you additional fees which you feel are excessive and you were not clearly informed about, you might have a case to make a valid complaint against them.
“Consumers are outraged at the exorbitant fees and charges some companies make them pay when buying goods and services with their credit cards,” said Mr Bradbury. “With the growth in online commerce and the use of credit cards, some companies appear to view transaction fees as a way to profiteer. These surcharges are in many cases excessively high, not transparent and often hide the true cost of the goods and services you are buying. When credit card surcharges and other transaction fees are not declared at the start of a transaction, they can also become a sting in the tail – particularly when you are buying things like tickets.”
Under a ruling from the Reserve Bank, credit card surcharges are supposed to only reflect the reasonable cost of processing the transaction.
“It’s not good enough for companies to bundle excessive fees and charges into non-descript surcharges and expect consumers to pay without question.
I want consumers to point out the worst surcharge offenders. The Government will await the findings of the review, but we do not rule out taking regulatory action to crack down on this fee-gouging practice.”
If you have lodged a complaint with the Consumer Affairs Advisory Council and want to take further action against your bank or credit card provider, you can also try lodging a formal complaint with the bank – this might have varying levels of success but in some cases it does work – we’ve seen several reported cases of banks waiving fees in the event of customer complaints. If that gets you nowhere, you could also try the Financial Ombusman Service, a dispute resolution service for consumers and financial services providers.
With the latest press release from the Australian Government indicating a definite intention to crack down on such unethical practices by big banks and credit card companies, however, hopefully these avenues won’t be needed too much longer.