Do you think bank fees are worth fighting over? For those taking part in a class action lawsuit against 'unfair fees' they are.
Bank fees are an unfortunate part of life and something that we all need to deal with, but some Australians think the banks have gone too far. Over 185,000 banking customers are preparing to take on eight banks for 'unfair' fees. The class action lawsuits are against the banks for allegedly charging customers excessive fees between $20 and $45 for overdrafts or ‘over the limit’ fees. The lawsuit is a game changer for Australia’s financial services industry and shows what public pressure can do.
We often forgot how much power we as consumers have over our finances. Yes, we rely on banks and financial institutions to keep our money safe, provide us with credit and give us access to funds that we need to live our lives. But this does not mean we have to pay high fees. Consumer choice has driven competition between financial service providers which has resulted in increased savings for us. The internet has provided consumers with the tools they need to find the best deal. Consumers should remember that access to information about financial services is right at their fingertips and it’s important to compare services to maximise your own savings potential and find the right product for you.
The case shows a marked change in the finance industry. Australians have had enough of paying collectively billions of dollars in bank fees and if these cases win, there will likely be a shakeup of all bank fees across the industry. The finance industry has changed considerable over the past few years, with government regulations encouraging increased competition and a number of emerging smaller financial institutions offering great savings to Australians. We as consumers also saw a huge win in July 2011 with the introduction of a government ban on home loan exit fees, encouraging consumers to compare and find the best home loan deal for their financial situation.
But fees and interest rates have always made it hard for Australians to plan and manage their finances. Last year, we collectively paid our banks over $11 billion in bank fees – over $4 billion of which was from households. Financial institutions cannot be relied upon to charge fairer fees or drop their fees altogether - the only way we will make real changes to the banking industry is if more Australians compare their financial products and switch. This will encourage competition between providers and will be a win for the consumers.
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If you don’t want to start a class action lawsuit but are still not happy with fees or charges from your bank, then you can compare credit cards and other products here at finder.com.au. There are many credit cards with no annual fees, including platinum and gold cards. There are also many home loans with no annual service fees and a large number of home loans that don’t charge redraw fees. Many transaction accounts come with no monthly service fees and fee free transactions. By reviewing products and comparing aspects of savings promises you can determine the best product for your situation. For example, you shouldn't choose a rewards credit card if you aren’t going to find a benefit from the rewards.
It’s up to more Australians to take on the responsibility with their financial products by reviewing their options and comparing deals. It will not only force competition between banks but also will save consumers potentially thousands of dollars every year.