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Australian bank fee refunds reignite calls for market power review
[SYDNEY] Westpac Banking Corp on Thursday became Australia's second lender this week to refund millions of dollars for fees deemed not immediately evident, fanning concern about banking practices and reigniting calls for a review of banks' market power.
Westpac said it had returned A$20 million (S$20.62 million) to over 800,000 customers, after Australia and New Zealand Banking Group Ltd (ANZ) on Monday pledged A$28 million to around 400,000 customers - both after self-reporting problems with marketing material to the corporate regulator.
The refunds come after the government last week defeated a motion for a sweeping investigation in the banking industry in favour of a limited inquiry into bank misconduct.
The motion was tabled after a series of banking scandals involving misleading financial advice, insurance fraud and interest-rate rigging.
"We would like to see an immediate review of competition in the banking sector," a spokesman for consumer advocacy group CHOICE told Reuters on Thursday.
Supporters of establishing a banking Royal Commission - the country's most powerful investigative body - want to restrict the market share of the major banks. The issue is expected to be raised again when parliament resumes next week.
In a statement, Westpac said it charged customers foreign transaction fees for overseas purchases on credit cards, even when merchants processed purchases in Australian dollars. However, it said details of the charges were not prominent enough, and that it has since updated its customer information.
Similarly, ANZ charged fees for customers who had used "set and forget" fixed-amount payments to make regular fund transfers between their own accounts, but that details of the fees were not prominent enough. ANZ said it had begun refunding customers.
"Consumers expect these products to work," Gerard Brody, chief executive of the Consumer Action Law Centre, told Reuters on Thursday. "It is a really difficult relationship and the banks have lots of power. "If there was a Royal Commision I think it would uncover a lot more about the finance sector that has yet to become public."