Major Australian Banks To Undertake Overdraft Fee Review
The Big Four Australian banking groups are reviewing charges levied on overdrawn accounts after their rival National Australia Bank (NAB) has decided to cease charging customers who end up overdrawing their bank accounts.
NAB said it will abolish the overdraft charge it levies on customers who overdraw from savings and personal transaction accounts from October 1st.
The change is designed to appease its customer base after the fee drew their ire, generating more complaints than any other topic.
An overdraft is run when a customer withdraws more than their available balance resulting in the customer holding a negative balance. Some customers have overdraft facilities with their bank, and if a facility is agreed with the bank in advance, then typically the customer is not charged for being overdrawn.
However it is customary for banks to levy charges on customers who end up overdrawing their accounts without specifically agreeing in advance to an overdraft facility with the bank, and it is this fee that is being abolished.
Commonwealth Bank of Australia (CBA) announced on Wednesday, that it would to some degree follow suit and will announce shortly a significant reduction in overdraft fees.
“Given recent developments we are reviewing this position, however, we have maintained a position for some time of having very competitive fees in the market overall and we will continue to do so,” CBA said in a statement.
Currently the lender charges its customers to in fees for running an overdraft.
An ANZ spokesperson said that the lender was acutely aware of customer sentiment, was evaluateing possible measures and would announce any policy shift shortly.
“We’re in the process of examining a range of options with an outcome expected in the near future,” ANZ said.
ANZ charges for an overdraft.
For its part, Westpac said it had begun undertaken a review of its fee schedule quite some time ago.
“Over the last 18 months we have already made some changes including removing exception fees from our basic bank account. A lot of our work has been done quietly, but we will continue to make changes where appropriate to reflect our customer strategy.” The lender said.
Westpac customers pay for an overdraft while with no fee is charged on its basic account.
NAB chief executive Cameron Clyde is expected to officially announce the fee changes in Sydney on Wednesday.
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