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Date Published : Friday, May 16, 2008
Banks throughout Australia collected a record $10.5 billion in penalty fees in the year to June 2007, according to new figures.
Data from the Reserve Bank of Australia found that fees for the late payments of loans and mortgages were up by eight per cent on the previous year.
However, the banks have hit back at the figures, stating that increased customer numbers, rather than higher charges, are the reason for the rise in fees collected.
David Bell, chief executive of the Australian Bankers' Association, said: "The past two years has seen the strongest demand for banking products and financial services on record, driven by growth in wages and real incomes, employment, low unemployment, population increases and company profits."
Mr Bell added that some banks have listened to customer feedback on the introduction of certain fees and penalties and have abolished the most unpopular fees.
"Heavily discounted fees are also available for low income earners and there are accounts in the marketplace which are free of exception fees," he stated.
For the first time in four years, businesses paid more in banking fees than households, contributing 58 per cent of the total fee revenue, against 42 per cent by households and families.
Credit cards are proving good money spinners for banks, with total fee income from plastic surging 170 per cent over the past five years. In 2007, total credit card fees paid by households grew 12 per cent.
Income from housing loan fees grew eight per cent and 14 per cent from personal loans – in line with strong demand for credit.
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