|
Exception fees – August 2007
This is the first fact sheet which was published in August 2007. There is now a new fact sheet with updated information which was published in November 2007.
BACKGROUND
In May 2007 the Australian Bankers’ Association (ABA) and member banks undertook to provide improved information on exception fees, in response to community debate.
This industry Fact Sheet is an important part of that process.
Individual banks have already responded by publishing more information about their own particular policies and products, and agreeing to review the terms and conditions of those policies and products.
Transparency of fees is prescribed under the industry’s own Code of Banking Practice. The ABA believes it is beneficial to enhance community understanding about exception fees, and fully supports competitive fee offerings by individual member banks.
Disclosure of fees by Australian banks is mandated by Government legislation. The ABA has had discussions with the Australian Securities and Investments Commission (ASIC) regarding exception fees. ASIC has informed ABA that it welcomes the industry’s initiatives aimed at ensuring an effective level of disclosure to customers about exception fees.
The information in this Fact Sheet will assist the community to get the most out of banking services. Improved disclosure means consumers have real choice when considering exception fees, which in turn is likely to foster market-based outcomes that benefit bank customers.
|
Exception fees are disclosed in the account terms and conditions and may be charged when there are insufficient available funds to cover a transaction, resulting in a dishonour or approval to overdraw, credit card payments are late, or credit card limits are exceeded.
|
Fee-free accounts available
Some banks already offer selected accounts for eligible customers where exception fees are waived or capped. Others offer accounts designed to virtually curtail the eventuality of exception fees.
The table below provides an overview.
|
| Overview of member banks’ low exception fees accounts |
| Bank |
Account Name |
Comments |
| Adelaide Bank |
Concession Express |
The Concession Express account carries no cheque or credit facilities, so most standard exceptions cannot eventuate. Inward cheque and direct debit dishonour fees may apply |
| ANZ Bank |
ANZ Access Basic |
Effective 7 August 2006, ANZ capped at $10 any exception fees incurred by eligible holders of Access Basic Accounts.
From 1 December 2007 ANZ will also cap exception fees on ANZ credit cards held by ANZ Basic Account holders |
| Bank of Queensland |
|
In some cases, BOQ provides concession/waiver for customers who overdraw their account by a small amount. The Bank provides tips on managing exception fees at its website. |
| Bankwest |
Fee Saver Basic |
The Fee Saver Basic account carries no cheque or credit facilities, so most standard exceptions cannot eventuate. Overdrawn account fees may apply. Its website contains a section on how to avoid bank fees and it has produced a leaflet which is available in branches. |
| BankSA |
Concession Account |
BankSA has capped at $8 any exception fees incurred by eligible holders of Concession Accounts. |
| Bendigo Bank |
|
Branch managers have discretion to waive exception fees on a case-by-case basis. No special exception fee account is available. |
| Citibank |
|
The Bank provides tips on how to avoid exception fees on its website. |
| Commonwealth Bank |
Ezy Action
All transaction accounts
Pensioner Security Account |
Where the Ezy Action account allows customers to overdraw their account by a small amount no overdrawing exception fee is charged.
From June 2007, inward dishonour fees are no longer charged on any transaction account product.
From November 2007, customers with a Pensioner Security Account will no longer be charged an Overdrawing Approval Fee (honour fee).
CBA also provides tips on managing exception fees at its website and will be announcing further initiatives in relation to exception fees in early 2008. |
| HSBC |
|
No special exception fee account is available. The Bank provides tips on managing exception fees at its website. |
| National Australia Bank |
Concession Account
NAB Smart Everyday Banking accounts
Fee cuts |
NAB has offered eligible customers a Concession Card Account, which is free of exception fees, since September 2006.
From November 2007, customers with a Concession Card Account will no longer be charged over limit exception fees on their NAB credit card. NAB will also remove the ability to overdraw the card on electronic purchases.
Commencing October 2007, NAB will launch four new accounts that include a range of options, including: no monthly account keeping fees; allowing customers to use any ATM in Australia without incurring non-NAB ATM fees and an account with no exception fees.
From early 2008 NAB will lower its outward dishonour fee (the fee charged for NAB customers without insufficient funds) from $50 to $30 and eliminate the inward dishonour fee, or charge $12 for credit cards only). |
| St George Bank |
Concession Account |
St George has capped at $8 any exception fees incurred by eligible holders of Concession Accounts. |
| Suncorp |
|
In some cases Suncorp provides a concession for customers who overdraw their account by a small sum. The Bank also provides tips on managing exception fees at its website. |
| Westpac |
Basic and selected Student and Youth Accounts |
For Westpac Basic Accounts and selected Student and Youth Accounts, these fees will be $10, effective 20 August 2007. |
How to avoid exception fees
Exception fees are avoidable.
In most cases, these charges can be easily avoided by careful management of your finances. It is important to check your account balances before making payments, and review your banking habits to identify where exception fees might occur.
To assist customers, banks provide easily accessible information that helps customers monitor their account balances and keep track of payments.
Tips on how to avoid exception fees
There are different options available to you depending on your bank and the type of account you hold.
For example:
- choose the right account that suits your transaction and saving needs; for example, if you regularly need to exceed your account balance choose one that has an overdraft or can access another type of credit facility
- check your account balance via an ATM, internet banking or telephone banking if you are not sure of the account balance before making a transaction
- consolidate your accounts to help you keep track of your funds more easily
- have your salary credited into the same account as your direct debits
- create a budget and plan your outgoing spending so that your financial commitments match your incoming funds
- be mindful of direct debits and ensure you have sufficient funds in your account to cover them; reschedule payments if you expect your balance is not enough
- when you receive your credit card statement, take note of the due date and ensure that any payment is made on or before that date
- when paying from an external source (e.g. another bank using external transfer), ensure that you allow for any processing period that may apply
- keep a small balance in your account to cover unexpected withdrawals
- check your credit card limit before making large purchases
- set up a due date to process a payment at least one day after scheduled payments of cleared funds are made to the account
- check incoming amounts have been received on time and that the correct amount has been deposited and cleared, especially if you are relying on these to make payments
- pay your mortgage, credit card or personal loan instalments by the due date; set up a regular automatic payment into your credit card to ensure that at least your minimum monthly payment is made on time
- instruct your bank to switch off the ability to overdraw the transaction account via Internet, Phone Banking, EFTPOS, and/or ATMs so that you cannot incur an exception fee when using these payment methods
- instruct your bank to switch off the ability to exceed your credit card limit on electronically authorised purchases and cash
- ask to receive a SMS alert for both successful and missed transactions
- ask for a ‘sweeps’ facility to automatically transfer funds from another account when a direct debit is presented which may overdraw the account
Customers should check their bank’s website to understand the bank’s policy on exception fees, including the Terms and Conditions and Product Disclosure Statement.
Many banks also provide information on their website giving tips on how to avoid exception fees (see links below).
|
Learn more
Read more from your bank by accessing the following web pages:
Adelaide Bank:
http://www.adelaidebank.com.au//fees_and_charges/index.html
ANZ:
www.anz.com/Documents/AU/Aboutanz/270807ExceptionFeesCC.pdf
www.anz.com/Documents/AU/Aboutanz/270807ExceptionTransAcc.pdf
http://www.anz.com/Documents/AU/feecharge/ExceptionFeeWebpage.pdf
Bank of Queensland:
http://boq.com.au/exception_fees_policy.htm
BankWest:
http://www.bankwest.com.au/Fees/How_to_avoid_Bank_Fees/index.aspx
BankSA:
http://www.banksa.com.au/media_centre/news/news_archive.asp?id=246
http://www.banksa.com.au/accounts/fees/minimise.asp?orc=personal&WT.ac=Front-Right-howtominimisefees-July07
Bendigo Bank:
http://www.bendigobank.com.au/public/terms/fees_and_charges.asp
Citibank:
http://www.citibank.com.au/global_docs/onlinetools/all_rates_frameset.htm
Commonwealth Bank:
http://www.commbank.com.au/personal/daybanking/MinimisingFees.asp
HSBC:
http://www.banking.hsbc.com.au/information/news/070629.html
http://www.hsbc.com.au/1/PA_1_2_S5/content/australia/common/pdf/personal/exception-fees-report.pdf
National Australia Bank:
http://www.nab.com.au/About_Us/0,,87884,00.html
http://www.nab.com.au/Personal_Finance/0,,83417,00.html
http://www.nab.com.au/smart
St George Bank:
http://www.stgeorge.com.au/media_centre/news/default.asp?orc=media
http://www.stgeorge.com.au/accounts/fees/minimise.asp?orc=personal&WT.ac=Front-Righthowtominimisefees-
Suncorp:
http://www.suncorp.com.au/suncorp/personal/transaction_accounts/exception_fees.aspx
Westpac Banking Corporation:
http://www.westpac.com.au/internet/publish.nsf/Content/WICRCU+Helping+you+avoid+or+minimise+fees
Created : August 2007 and updated September 2007
Internet: www.bankers.asn.au Phone: 02 8298 0417 Fax: 02 8298 0402
|