Cutting of cruel fee is not before time
Wednesday, 5th August, 2009
By Stefan Delatovic
The removal or reduction of overdraw fees by the nation's big banks was good news for the public and especially the poor, according to Lifeline Financial Counsellor, Sherrie Wilkins.
Last week the National Australia Bank announced it would abolish the fees charged when a customer overdraws on their account. They have been as high as $45, and most banks charged at least $30.
This week Westpac and St George said they will cut the fee to $9 but will extend it to credit cards. The ANZ and Commonwealth Bank have done nothing to reduce their fees yet, but say they are looking into it. General Manager of the Broken Hill Community Credit Union, Andrew Pellizzer, said they would also be reviewing their penalty fees. He said the Credit Union imposed a $15 overdrawn fee on cheque accounts, but that it was used sparingly. "We don't have that many penalty fees. Most of what we charge are pass-through fees that we are charged by the bank," he said. Mr Pellizzer said the Credit Union dealt with the National Australia Bank and would await the full detail of the changes before altering their fees. Sherrie Wilkins offers financial counselling through Lifeline Broken Hill. She said the validity of the fees had been debated for ages, with customers able to dispute them, and often reverse them, through letters of complaint. Ms Wilkins said the fees hurt the most vulnerable people, as they were most likely to see their accounts fall behind. And a flat rate of $30 had a much greater impact on people on a pension or low income. "They may have a direct debit of only $18 say, but if it comes out at a wrong time or their pension is a day late, they're paying an extra $30 and it can be hard to catch up from that," she said. Ms Wilkins said that she was "very, very busy at the moment". "Unemployment in Broken Hill has risen, there's the credit crunch and things are more expensive so you have people on payday trying to decide what not to pay rather than paying all their bills, and it gets them into trouble," she said. Ms Wilkins said she was helping people look at their financial situation, avoid bank fees and negotiate with creditors to get their debts paid off. She said she had also helped a lot of people declare bankruptcy recently. If people were having money trouble, Ms Wilkins invited them to contact the Credit Counselling Service at Lifeline.