What’s this? Choice turning political in an election year? Flooding Pete Costello’s office, email and phone line with irate consumer complaints about one of the big holes in his defective watchpuppy legislation?

It sounds promising in the Choice media release announcing a “Fair Go On Fees”, a concerted attack by consumers on banks and the federal government over the various outrageous and legally unenforceable bank penalty fees. Choice promises to:

  1. Make a claim to their financial institution to have a penalty fee reversed;
  2. Contact Federal Treasurer Peter Costello to demand action on fees;
  3. Tell their story and encourage others to join the campaign.

Except that the www.fairfees.com.au website doesn’t seem to be working this morning and neither does the “write to federal MP’s (sic)” link on the main site. Oh well, it was a nice thought.

With banks profiteering to the tune of several hundred million dollars a year on penalty fees, there’s no sign of them willingly surrendering their gouge.

One of Costello’s blunders in setting up the “three peaks” regulatory framework of APRA, ACCC and ASIC is that bank penalty fees fell between the cracks – no-one has any responsibility for them. Of course a rougher and tougher ACCC could stick its nose in anyway, but it has enough problems with a petrol inquiry it didn’t want.

Thus, while it’s good consumer advice to tell punters to demand refunds of their fees, the problem isn’t going to be solved without political muscle.

One might have thought Kev from Queensland or one of his minions would seize on the chance, but they’re rather busy compensating for Julia by being nice to business. (Go on, Kev, promise to nationalise the banks, just for old times’ sake.)

The banks’ dubious imposition of penalty fees is only one of the Treasurer’s regulatory shortcomings. At the ASIC end, there’s the laissez faire attitude to the lies and deceptions of property spruikers “advising” on million-dollar property “investments” while financial planners are theoretically required to research and write War and Peace before they can a tell a punter’s what to do with $10k.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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