Bank fees to fall

Tamlyn Stewart

Tamlyn Stewart

Good news for overburdened consumers - the Competition Commission has taken steps to significantly reduce the fees banks charge their customers.

Yesterday the commission issued recommendations after an enquiry into the pricing practices of the country's banks.

The commission recommended that banks should cap the price charged for processing rejected debit orders at just R5 per dishonoured debit order.

Currently, the price charged for a rejected debit order on, for example an Absa Mzansi account, is R30.

Jan Mahlangu of the Financial Sector Campaign Coalition (which includes the Congress of South African Trade Unions) applauded the proposed cap on penalty fees: "A difference of R25 is a lot of money to someone with an Mzansi account. At the time we made our submissions we were very critical of banks charging poor people. This is something that we welcome."

Black Sash national director Marcella Naidoo agreed: "It is certainly a step in the right direction and it puts a bit more money in the consumers' pockets so they can deal with other increases in food prices and fuel prices."

Interbank fees which are charged when a customer uses an ATM which is not the customer's own bank's ATM, are currently agreed upon between the banks and have been "sheltered from competition", the commission found.

It found that the customer was charged a higher fee - a substantial part of which is kept by the issuing bank - even though it had not provided the service.

The commission said this fee must be replaced by the ATM service provider charging the customer directly.