How banks 'rob' clients

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Peter7

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http://www.fin24.co.za/articles/bus...?Nav=ns&lvl2=buss&ArticleID=1518-1786_1929594

09/05/2006 08:15 AM
By: Lizel Steenkamp

Johannesburg - Every year South Africans pay billions of rands for transactions for which banks charge exorbitant fees that have little or no bearing on what it costs to do the deal.
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That's why, for the first time ever, banks will now have to explain at public hearings how they calculate their transaction fees and why South Africans have to pay such exorbitant sums.
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I can vouch for this. I tried putting R1000 in a South African bank (ABSA) at a stage and it was constantly diminishing with bank fees, even though I didn't touch the money. I'd like to see them cornered about how they calculate the various fees (plural).

The purpose is to determine whether bank charges are competitive or whether they're the result of an absence of competition in the banking sector, a Competition Commission spokesperson says.
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Suprise suprise, no competition allowed = exhorbitant pricing schemes. In my opinion we should have an open market (in all sectors) just like the U.S. with no regulations saying only 'x' amount of competitors are allowed.
 
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Yes it is a sad situation. Look at what rate your debt grows if you owe a bank R1000. They are in for the money, but then they should have defined guides so you do not lose value on a deposit. If the interest is not enough to sustain your balance against the charges, then you should have been informed beforehand.
 
And this news just to hand, it appears that the number of bank robberies is not as high as it seems, it turns out that it is mainly customers trying to get their own money
 
FEASibility's research shows that it's impossible for clients to compare their bank [cellular] charges with those of another bank [provider], as price lists are "bundled".

That means banks [providers] have different packages for savings [prepaid] accounts and cheque [postpaid] accounts, so that comparisons can't be made. In addition, the banks have complicated formulas for the calculation of the charges for transactions that vary from bank [provider] to bank [provider] - so different charges can't be compared.
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Practice sound familiar? My adaptation in brackets. South African way of business it would seem.
Coovadia says the banks will try to agree on some "kind of methodology" so that bank charges can be compared. "Comparisons will always be difficult. Banks would rather like to think they compete on the basis of service delivery, not charges."
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Yeah - well I'd prefer them to compete on something tangible like charges.
 
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