Bank fees deliver hidden stings as customers are unaware of charges

Fees for ATMs and transaction accounts have been eliminated at many banks but customers are still being stung by charges on other financial products, and many do nothing about it.

Bank fees on home loans, credit cards and superannuation are going unchecked and costing many consumers thousands of dollars each year.

New research by UBank has found more than three quarters of Australians don’t know how much they are spending on bank fees, and many underestimate the hit on their hip pocket.

It says $4 billion in fees are stinging consumers, who blame complexity and a lack of time for their knowledge gap.

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UBank CEO Lee Hatton said Australians had an average six accounts or financial products and often overlooked them because the individual charges were relatively small.

“They forget how quite small increments can add up,” she said.

“It’s so important for people to focus on the details — not just the big picture.”

The research found that Australians estimate they spend $328 a year on bank charges, below the Reserve Bank of Australia’s figure of $468. People with multiple loans and super accounts often spend thousands of dollars a year.

UBank CEO Lee Hatton says bank customers need to focus on details. Picture: Hollie Adams

Only 23 per cent know their credit card fees, 20 per cent remember home loan fees and just 11 per cent know their superannuation fees.

“Seventy-six per cent of people we researched admitted they don’t know how much they spend,” Ms Hatton said.

“We are alert to the fact that we are unaware, but we are not doing something about it.”

She said people wanting to cut fees should:

• Have some self-awareness. A simple check of bank statements is a starting point.

• Write down all the fees being paid “so you understand the flow of your money”.

• Search online for lower-fee alternatives and telephone their bank.

• Never be afraid to switch. “We used to say it was hard to change bank accounts, but it isn’t anymore.”

Don’t ignore a bank fee simply because it only costs $1 or $2 each time.

Omniwealth financial adviser Steven Korner said customers should look for fee-free alternatives.

“In my personal opinion, if you pay fees on your bank account you should change banks, because you shouldn’t be paying fees in this day and age,” he said.

Mr Korner said the lack of understanding of super fees was expected. “A lot of people don’t even know what their bank fees are and that’s something they use every day. Imagine it for super, something you don’t use until 65.”

He said one of the worst super fee impacts was from having multiple accounts, and now was the time to consolidate “and take back what is yours”.

“First go to the myGov website and access your super through the ATO portal. It will show you if there are any lost accounts.

“To find out the fees you are paying the best way is to call the fund and ask. You can get statements, but statements sometimes only tell half the story.”

@keanemoney