The big banks are finally sitting up and taking notice.
Following the NAB's decision last week to abolish its $30 overdraw fee from personal and transaction accounts, Westpac and St George Bank have decided to follow suit by cutting their overdraft fees for all accounts.
With effect from the 1st October their dishonor fees which are as high as $45 for some accounts will be slashed to $9. Westpac currently charges $40 for an overdrawn account while St George's charges for customers vary between $38 and $45.
Peter Hanlon Westpac retail and business banking group executive said the fees on credit cards and personal and business accounts would be cut to $9. Mr. Hanlon stated that this would include overdrawn fees, outward dishonor fees, and credit card missed payment and over the limit fees.
After the National Australia Bank abolished its $30 overdrawn account fee on its personal savings accounts and personal transaction accounts, winning praise from its customers, consumer groups and Prime Minister Kevin Rudd the other banks decided to follow.
Westpac announced that the reduction "across all products", not just their personal accounts, would benefit its five million personal and business customers. Westpac however said that they would not completely abolish its fee because it cost the bank every time it honoured a transaction on an overdrawn account or processed a bounced cheque.
Mr. Hanlon stated that the group had reviewed its fees for the past six months, after speaking to customers, small businesses and meeting with small business lobby groups. After conclusive research the bank found that $9 was more acceptable to a broader range of customers.
Most people understood that there was a need for a fee to try and discourage poor behaviours, but the resounding feedback they received was that the fees were just too high.