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Date Published : Friday, January 18, 2008
Savers are not feeling the benefit of higher interest rates implemented by the Reserve Bank of Australia (RBA).
That is the opinion of the Consumer Action Law Centre, which believes some institutions are more concerned with raising profits than passing on the hikes to their savings accounts customers.
Gerard Brody, policy director for the organisation, said that banks may be reluctant to mirror the rate changes as they are not obliged to take any action.
"Some of them are always very quick to put up their interest rates (on loans) and they always put through the full increases," he told the Australian.
"But with their deposits, they are slower to do so. It can be a few weeks. The banks can profit and, for that reason, they don't have to pass it on to consumers straight away."
Mr Brody's comments came in response to a report by the RBA that highlighted a lack of action from banks, in relation to savings accounts, following the increase of interest rates in August and November 2007.
Furthermore, the RBA found that where the November hike was passed down to savings accounts containing more than $10,000, the move was not taken until a month after the Bank's decision.
The Consumer Action Law Centre is based in Melbourne and provides assistance to the public on litigation and consumer matters.
Last month, it submitted to the Australian Law Reform Commission its argument that there are currently weaknesses in the complaints-handling procedure for credit reporting.
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