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Date Published : Tuesday, September 16, 2008
Penalty fees issued by banks are targeting the country's poorest-paid families, according to an inquiry.
The Senate inquiry into banking and credit card fees has revealed that struggling Australian families are being charged excessive fees related to late payments on their credit cards or overdraft facilities, Adelaide Now has reported.
The newspaper said that the bipartisan inquiry found penalties on overdrafts and credit cards can account for up to 20 per cent of some families' weekly income.
Labor and Liberal MPs on the Senate Economics Committee have suggested that penalty fees are "marginalising people who are already struggling to feel they belong in Australian society", according to the publication.
Committee chairwoman, Senator Annette Hurley, told the newspaper that the fees are "affecting the people who could least afford it".
One example highlighted by the inquiry was a woman who over the course of two days received a $25 late charge on her credit card closely followed by a $25 charge for being over the limit.
Ms Hurley added that low-income workers are not properly informed about the types of accounts that they should have, resulting in them failing to avoid fees.
In July, the same newspaper revealed the country's biggest banks generated a total of $5.5 billion in six months just from fees charged to their customers.
Citing analysis by the Advertiser, it was claimed that this represented a nine per cent increase compared to the same period last year.
However, Australian Bankers Association chief executive David Bell attributed the jump in fee income to an increase in business and the "strongest demand for banking products and financial services on record".
See the latest on the new Woolworths credit card.
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