More Bank Fees Could Go - Cannex

Aug. 17, 2009 - PRLog -- "Although banks have always charged fees for overdrawing your account, they have been struggling with the negative publicity every since the Reserve Bank revealed the banks reaped $1.2bn through penalty fees last year," Canstar Cannex financial analyst Peter Arnold said.

The research group said more banks were expected to follow suit.

The decision by NAB to axe its overdrawn fee is part of its efforts to improve its relationships with customers.

It should also put the bank on a more even footing with credit unions and building societies, who are generally more forgiving when it comes to customers being accidentally overdrawn.

"Many credit unions and building societies give you a period of grace - say 5 days - to rectify the error and they seem to charge a fee only as a last resort," Arnold said.

In addition, according to Cannex, credit unions ($15.49) and building societies ($19.57) charge on average much lower fees than the four major banks ($33.33) and the other banks ($26.90).

Recently, James Middleweek managing director of consumer compensation law firm Financial Redress told Brokernews  the UK was "light years ahead of Australia" when it comes to consumer protection and activism.

"Penalty charges are on the point of being outlawed in general in the UK," he said.

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Financial Redress is the first law firm in Australia to specialise in recovering compensation from financial institutions for excessive charges or mis-selling. Financial Redress focuses on bank/credit card penalty charges.