My main irk was associated with the fact that not only do the banks and credit unions charge you interest on the amount your account is in debit – typically as high as 14% even though this is no where near their overnight cash interest rate – they then charge you as much as $46 as “punishment” for going into debit. I somewhat reservedly understand about the interest expensive on the amount you are in debit – since the bank is after all “lending” you this money and they should not have to pay interest for you – but the additional charge was always something that was completely unnecessary.

For too long, banks have simply been willing to sacrifice brand equity for the income they rake in for the charging of such fees – with the most customer complaints always stemming from unnecessary fees and the banks unwillingness to return them. The consumer advocacy argument of “you have a choice” – in my mind – was always a weak argument. People have banked with most institutions for many years, and the thought of changing all your accounts in addition too the fees associated with such a process – turns most people off.  People just accepted the fees, and then go and tell all their friends how much they hate their bank.

Now the landscape is finally changing today with the annoucement from the National Australian Bank (NAB) that it is abolishing overdrawn account fees from all NAB personal transaction and savings accounts from 1st October 2009. The result – more than 700,000 NAB personal transaction and saving accounts that will never have to pay – or even better – sit on the phone for 90 minutes with increase heart rates, blood pressure and angry temperament ready to blast the phone operator …. who is now based in India and cant understand what you are saying as its not on their “reader sheet” of things to say to “calm angry customers”.

Of course, what NAB fail to mention in this press release is the fact that interest is still charged on accounts that run into debit – so don’t be fooled by thinking that you can go $100′s over on your personal or saving accounts – because you are still going to cope a nasty surprise as interest is still charged since you are being lent “cash from the bank” – effectively, that is, a cash advance. But the good thing is – most people rectify their debit account within one or two days – so the charge is very likely to be less than a couple of dollars.

This is a great thing.

I must provide a moment of  some quiet applause to the NAB for leading the way in this – now your profit will be $3.9999989 Billion instead of $3.9999990 – and you will indeed have a bunch of extremely happy customers. Of course, I imagine as I write this – the other major banks are now all scrambling to follow suite and will announce in the coming days that they are providing their customers with the same options on their personal accounts – otherwise I really think this will tip people over the edge and they will move.

I have often found it so ironic – that banks are willing to spend $100′s millions on advertising to the Australian public – only then to have their reputations hammered by the charging of unnecessary fees. It’s such a massively hyprocial stance – I mean, I am really not sure what banks are thinking. Actually, I can imagine the executive scenario now:

Executive 1: ‘Hey, I had this great idea on my yacht on the weekend – lets get some overseas marketing organisation to make stupidly not funny ads about Australia which will cost us around $50 million and people will love us.’

Executive 2: ‘Great idea (pass the cigars would you) – I love it. In fact, lets have the rest of the day off to bask in our brilliance, play golf and try that new Red Wine Grange just released’

In fact, I would be willing to bet that the amount spent on advertising would far exceed any associated income on bank balance sheets derived from such ludicrous fees. I really can’t believe that someone hasn’t mentioned to Australian banking institutions that branding is more effective when you are 100% customer focused – I mean seriously customer focused. Any marketing guru with half a brain will tell you that customer satisfaction is the most important tool in effective brand management. Happy customers and a great product is a recipe for instant success. The banks have the latter I believe, but very much lack the former.

So here is a free tip to the banking industry of Australia – don’t spend $100′s of millions marketing on football ads (do all your customers play AFL? I mean, last time I heard – there were a lot of other sports in Australia), stupid overseas advertising campaigns which are not funny (I don’t even comprehend who thought of this – why would we care about America? – let alone some poor attempt at ironical humour. How about an ad showing the amount you spent on this campaign vs. the overdraft fees you charge?) or shoving some stupid-arse ram in our face (talking RAM’s don’t do it for me – sorry):

1. Scrap unnecessary fees - guess what, your customers will love you, your internal and external – ombudsman – complaints will plummet and your brand will improve. Yes, amazingly word of mouth is still a very effective marketing tool.
2. Improve your customer call centres by employing more local staff – yeah that’s right, don’t advertise for one week on television and your balance sheet will be able to fund this. And hey, if you actually made it an enjoyable place to work – maybe you wouldn’t have the high turn over of staff that you do. Take a note out of Zappos’ handbook – one of the most customer focused companies in the USA – whose staff love to work there. It’s not complex – nice working environment, flexible hours, less pressure = happy staff = happy customer experience.
3. Add more people to your branches – wow, your customer service lines are clogged up with 1 banking teller dealing with a 50 minute complaint, while 30 people wait in the cue for the other teller. Heres an idea, how about you employ a dedicated customer service officer and some more branch teller staff – one person deals with disputes in a separate room while the bank tellers can do their jobs servicing accounts. Oh and this should mean that all the other 30 people in cue don’t hear how much your service sucks from the person complaining.
4. Give people authority to solve the issues - don’t bullshit with “transferring you to no help department” or “I don’t have the authority to do that”. Give them the training to do it and stop passing the buck.
5. Embrace innovation – I wouldn’t step into a bank branch these days unless I absolutely had too – use social media tools that the now twenty-somethings use to communicate and take customer feedback. Your customers have all sorts of ideas that you can use too improve – Facebook and Twitter are obvious starts.

The buck stops with you banks – how about actually doing something for a change – listen to your customers, act on feedback and embrace innovation. Who knows – maybe people might actually start loving you? Last time I heard someone say “oh, I really love my bank, they are just so great and cool” was … um, thats right – never?

Financial institutions in Australia work for you – you give them money which allows them to operate, invest, lend and conduct their operations. Without you, they wouldn’t exist. If all financial institutions took a more open, transparent and fairer approach to fees and charges then I wouldn’t need to be writing these tips. But they don’t, and therefore neither should you. You really do need to take on the philosophy of

They need you, more than you need them.

Remember, you are the consumer and always have choice. We are lucky enough to live in a country where moving from one financial institution to another is not difficult – sure, it’s frustrating and maybe downright painful – but the more you impress on your current financial institution that you will not hesitate, even in the slightest, in moving to a competitor – the more they will offer you to stay. You are their “life blood” so to speak and without you, they will need more donors – and we all know how hard it is to get donors (speaking of which, donate blood today!)

It’s time to fight back against financial institutions and their dirty tricks to charge you unnecessary fees and charges. So to assit the fight, I have decided to create a Unfair Bank Fees and Charges Guide which will give you the best chance at getting your Fees and Charges refunded – so you can do more with your money than give it to the bank.

How can I fight Fees and Charges?

You are always legally entitled to question and challenge unfair fees and charges that you have been forced to pay. Most of the time, financial institutions will simply state that it was your fault that the fees and charged were applied to your account, and that all account fees and charges are fully documented in the complex, lengthy and finely printed “Terms and Conditions” manual which was provided to you when you opened your account. This is their standard response and a lot of people take the attitude of “oh ok, i’m sorry I didn’t realise” and leave it at that.

To be honest, you should never be the one apologising for unfair fees and charges since you have done nothing wrong. If you were not made fully aware of the fees and charges when your bank account was created, then you shouldn’t be apologising for anything – the bank should. And even if you were made aware of them – no one is perfect, at least of all banks, so why should you have to pay?

Well, what are Unfair Fees and Charges?

I consider Unfair fees and charges as typically ‘externality’ fees and charges – that is – fees and charges that are applied as a direct result of excess account debit. Most of these fees are related to consumers not checking their accounts or statements regularly. Financial Institutions absolutely thrive on people who forget to check their statements and those of us who simply ‘can’t be bothered’ to dispute fees and charges. Of course, if you can’t be bothered to dispute fees and charges – why are you reading this ?

You should always be concerned about your money and what people are doing with it. You work hard for your money and anything extra that you give a financial institution, is one cent less you get in your pocket.

A list of typical unfair fees and charges to be on the lookout for is shown below. If you see one of these on your statement, it’s time to get angry and ring the bank to complain! : )

• Overdrawn account fees
• Credit card late payment fees
• Credit card over-the-limit fees
• Cheque Dishonour Fees
• Overdrawn account fees
• Deposited Cheque Dishonor Fees

OK, thats it – I have one of these on my statement!

First thing – it’s fantastic that you are checking your statement – so many Australians don’t. Secondly, let your anger settle down for a minute, since it’s not going to solve anything. Thirdly, keep reading.

Phew, anger gone – whats the First Step I take now?

The best and first step after you can take after you get your statement is to add up the total unfair fees and charges listed, and write down the exact reasons why they occurred (as best you can remember – reviewing your statement will help). You are going to be asked this by your financial institution when you call them to complain, and they are going to impress on you that it wasn’t their fault, but yours and yours alone – this is almost always their standard reasoning.

It is pretty important to take this first step seriously, since the financial institution may easily be able to disregard your claim if you can’t substantiate it and don’t have proof. Of course, there are ways around this which I will detail later – but to keep things easier for yourself (and less confronting on the phone when you ring up to complain), make sure you have proof of each charge and the reasoning behind it.

What sort of reasons are there ?

There are lots of reasons as to why the charges may have been applied to your account, but the only person would really knows is you! Some typical “generalised” reasons that I have used, and that Small Stocks readers have sent me, include:

• I was not aware that my account had reached such a low level and that a particular transaction debit was about to be applied to my account.
• I didn’t actually realise that I was being charge interest on my account which was overdrawn.
• My account was only just overdrawn, and the size of the reference fee applied is really disproportionate to the level my account was over.
• I only earn a limited amount of income (pension, youth allowance, center link, disability or other etc) and this fee substaintially reduces my, already limited, income.
• The payment to my account was late because I didn’t realize I had to pay credit cards between the dates listed on my statement.
• The payment to my account was late due to “x,y,z” circumstances which were really out of the ordinary and if you review my repayment cycles in the past, you will notice that they are regular and consistent.

OK detailed and reviewed – now what ?

Now it’s time to ring the customer service hot-line. While it is possible to also write a letter to a financial institution complaining about the fees and charges applied to your account – it’s a much longer process that will typically end up in a phone call anyway and will, more than likely, be dealt with by the “standard template” response letter. This just wastes time, frustrates your more and solves nothing.

Ringing up the bank is indeed, more confronting than writing a letter – but it also brings it to a more personal level. Remember, you are a customer of the bank, they are not a customer of yours – so don’t be “scared” by them. Be confident, polite and try not to get angry as it really goes against you.

A few “pre-warm-up tips”:

1. The nicer you are to the representative on the phone, the more likely they will refund the fee immediately over the phone. Don’t go in guns blazing – or they will retaliate and tell you to “stick it” in no uncertain terms. Remember, the person you are speaking to is a Mum, Dad, Brother, Sister, Sibling etc and they don’t like fees and charges as much as the next person – keep things on a “nice” level to begin.
2. Write down everything, and by everything I mean the time you called, the customer service representatives exact name (ask for full name), the tone in their voice (nice, angry, condescending, abrupt etc), detail what you have stated, what they stated and so on. You may laugh at this now, but depending on how far your complaint goes – this is all very important information to have written down incase things turn nasty down the track.
3. Do not attempt make things up – don’t say “I was never provided a breakdown of the fees and charges” when you in fact were. A lot of banks now days record the entire phone call conversion for legal purposes – if you start bullshitting, it’s potentially going to hurt your claim down the track if things don’t go to plan. If you stay honest, then there is nothing the bank can do.
4. Don’t be scared! The above 3 points may seem “too confronting” – trust me, they really aren’t.

Great, I am about to ring them?

Stop! First let’s go through what you need to say:

1. Once you have got through the 50 stage phone menu and got onto an actual human being – tell the customer service representative that you want to lodge a complaint about the fee(s) that you have been charged on your account and that you would like a refund. Provide the fee(s) type, the date the fee(s) were charged and the total of the fee(s) that you want refunded.
2. They will then ask you why the bank should actually refund the fees ? What is the reasoning behind the complaint etc ?
3. Be honest and tell the customer service representative the reason the charge was applied. You should already have these listed down with the relevant reasons (refe to some examples above). Remember, be honest!
4. Wait for their response – they may immediately state that they understand your circumstances and they are willinging to refund it “this time around”. If this is the case, thank them for “this time around” and hang up – great, no fees for you! If they start to question you more, you know the person you are speaking too doesn’t believe you and they may be a “difficult operator”.
5. If you fall into the second “difficult operator” scenario, wait for their response and tell the customer service representative that you feel the amount you were charged was entirely excessive compare to the valid reason you have provided, and that you are disappointed in the bank. Ask them to justify why the fee was applied ? And, more specifically, why they will not refund the fee ? (their answer to this question is very important to note down)
6. If they again refuse to refund the fee, ask to speak to their manager. 99% of the time, the “manager is unavailable at the moment and will have to call you”. Accept this, and state that you want a call returned from the Manager today (the day you are calling) as you are entirely dissatisifed with the excessive fee, and with the customer service repsentatives handling of the situation. Be confident and firm. Ask for the Managers name and the approximate time they will call you.

Hope this Post has been Helpful and you Manage to get back those Unfair Fee’s and Charges Back!!!