Beating the banks on fees

Reporter: Jackie Quist

Mother-of-three Meagan Spowart took on her bank and has recovered the $780 in fees and charges she shouldn't have had to pay in the first place. "We had gone through some tough times financially, for a period of maybe three months," Meagan said. "And we were charged some fees for not having money for a direct debit and going over on a credit card limit. These fees added up to a lot of money."

Richard Armour is a solicitor acting for the newly formed online company Bankbeaters. "I feel offended at these enormous fees the banks charge, which are just totally unjustified," Richard said. "And for people out there in the community they don't know they're actually illegal."

He's now in the business of playing the banks at their own game, forcing them to hand back thousands of overdrawn, dishonour, late and over-limit fees slapped on Australian consumers. "I fight banks, I fought banks for many, many years in my career and they're very, very tough," Richard said.

The Consumer Action Law Centre's Catriona Lowe agrees, insisting the penalties are outrageous and unlawful. "It's a penalty for a breach of a contract and the law says that that must not be more than a reasonable pre-estimate of loss," Catriona said "That means basically the bank should charge you what it costs them to default you."

Richard added: "The cost to actually write to a customer and say you haven't paid your payment on time is about 45 cents. Most people are being charged a minimum of $35 for that letter." That's a lot of Australians out-of-pocket, when you consider the banks rake in around half a billion dollars a year in penalties.

After Vicki Rudder fell on hard times this year, her bank cashed in helping itself to $2,000 in penalties. She is determined to get it back."They are making a fortune out of our misfortune," Vicki said.

One phone call and Adam Bell was refunded two $45 dishonour fees. "When you are doing the budget around the kitchen table with a couple of kids and a mortgage,$90 is a lot of money," he said.But when the banks refuse to refund your money, or if you have multiple fees, Bankbeaters believe they're better equipped to do the dirty work, with solicitors on hand ready to flex legal muscle.

For instance, they've clawed back $590 for a customer in Port Willunga, South Australia, as well as a $50,000 discount on his mortgage account. And they're processing a $4000 claim for a couple in Petrie, Queensland. In the last two years, Bankbeaters boasts they've submitted 3000 claims with not one case being rejected and the banks have already paid out a quarter of the complaints. But Bankbeaters does charge a fee: 15 per cent of the amount recovered, with a $50 minimum.

"You're entitled to make these claims going back 6 years," Richard said. "It costs the consumer nothing to register and if we get a recovery, then we take a fee. If we don't get a recovery the consumer pays nothing." Catriona gave her advice on Bankbeaters. "For time-poor consumers that could be quite a useful initiative," she said. "We would urge consumers to be wary of a few issues though. They should check the privacy policy of the organisation. They are, after all, handing over personal information including bank account information."

If you are brave enough to take on the banks yourself, Catriona says there's free assistance on the Choice website. The hope is, if enough bank customers demand their money back, these ridiculous penalty fees will eventually be reduced.

Not surprisingly, the Australian Bankers' Association accuses Bankbeaters of cashing in and says consumers can avoid penalties by checking their balances before making a transaction. Still, Bankbeaters say they will continue their quest to make the banks accountable.

For further information visit the website at:

or (Choice website).