Companies

Sep 10, 2012

Banks penalised for fees, but don’t expect an apology

The High Court of Australia last week dealt a blow to the big four banks when it overturned a Federal Court ruling and found that certain fees charged by banks could be classified as "penalty fees".

Adam Schwab — Business director and commentator

Adam Schwab

Business director and commentator

The High Court of Australia last week dealt a blow to the big four banks when it overturned a Federal Court ruling and found that certain fees charged by banks — specifically honour, dishonour, non-payment and over-limit fees — could be classified as “penalty fees”.

2 comments

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2 thoughts on “Banks penalised for fees, but don’t expect an apology

  1. Steve777

    The banks charge these fees because they can. It’s a result of there being little effective competition between the banks in the relatively isolated Australian market. Indeed, I regard some of the fees charged by banks as being little more than legalised pilfering. Unless we can do something to bring about real competition between the banks, we need closer regulation. After all, we know they’re too big to fail and the taxpayer will bail them out if they get into big trouble, so they’re not like normal private businesses. If the court finds that some of these fees are legal, the parliament should intervene. Of course there’s no point introducing limits to some fees in the current environment – the banks would all charge the maximum. The fees should be banned or allowed only subject to detailed reporting to justify.

  2. Mike Smith

    @Steve: When, not if, they lose the class action, they may think twice. Reducing them now is an admission of guilt.

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