Information to be provided to the community on exception fees
The Australian Bankers’ Association (ABA) and member banks will provide the community more information on exception fees, which have been the subject of extensive community criticism.
Exception fees on personal accounts include dishonours, credit card late payment, account overdrawn and credit limit excess fees.
The ABA believes it would be helpful to increase community understanding about exception fees. In the interests of further disclosure:
• ABA member banks will publish information about their own policies and products including how they affect customers in relation to the charging of exception fees. This information will be published by end June, 2007.
• By end July, the ABA will publish an industry fact sheet which describes each of those member banks’ approaches and how bank customers can modify their behaviour to avoid or minimise the incidence of these fees.
• By end July, ABA member banks will review their own terms and conditions on relevant products.
Some banks already offer selected accounts for eligible customers receiving Government benefits which don’t charge exception fees or which reduce the cost of the exception fee.
The ABA has had discussions with the Australian Securities and Investments Commission (ASIC) regarding exception fees. ASIC has informed the ABA that it welcomes the ABA proposal, and that it will be closely monitoring developments with the aim of ensuring the level of disclosure to customers of all financial institutions about these fees is both adequate and effective.
