Banking customers have been stung by exorbitant fees

DESPITE the removal of ATM fees, Aussie customers are forking our hundreds per year on sneaky bank charges. And one product is proving to be the biggest money spinner for the Big Four.

BANKING fees have delivered financial institutions their biggest windfall in nine years by slugging every Australian household about $500 annually on their financial products.

And exorbitant credit card fees have proven the most lucrative charges, new official figures show.

The Reserve Bank of Australia’s annual report, Banking Fees in Australia, released today revealed banks’ fee income from households and businesses has climbed by 3.1 per cent to $4.5 billion in 2017 — the highest level since 2009.

This is despite the Big Four banks all dumping ATM charges — often at $2 per transaction — in September last year.

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Credit card fees are big money spinners for financial institutions.

Slugging credit cardholders was the single largest source of bank fee income and late-payment fees is among the best money spinner.

The highest late payment fee charges are $35.

Credit card annual fees on both rewards and non-rewards cards helped line the pockets of the banks.

And income reaped from foreign currency conversion charges is also excessive — the worst conversion fees on products are as high as 3.65 per cent — another area banks reeled in cash.

Account-servicing fees also increased including reinstating annual fees on some products, giving banks more money.

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The mass windfall for the banks comes at a time when lenders have come under fire in the financial services’ royal commission, slammed for fee gouging, fee-for-no-service charges, giving customers incorrect advice and falsifying documentation.

The Big Four banks have come under intense scrutiny in the financial services’ royal commission.

Financial comparison website Mozo’s spokeswoman Kirsty Lamont said bank fees continue to hit customers’ hip pockets hard.

“While customers have been enjoying the benefits of free ATM withdrawals from multiple banks this hasn’t actually equated to lower overall banking fees for Australian customers,’’ she said.

“Unlike most expenses in our lives bank fees can for the most part be avoided.”

Mozo spokeswoman Kirsty Lamont says there are plenty of fee-free banking products available to customers.

The report, compiled by Emily Perry and Christian Maruthiah, highlighted that home loans was not a big cash cow for banks.

“Fee income from housing loans was little changed in 2017 despite loan approvals having increased over the year,’’ the report said.

But they pointed out the surge in customers using electronic payment methods “has driven strong growth in both fee income from households on credit card products and merchant service fee income from businesses over the past five years.”

Businesses also were hit by fee hikes, climbing by 3.8 per cent in 2017 largely due to fee income from merchant service fees on card transactions, when customers pay using “tap and go.”

Fees on card transactions and account-servicing fees on small business loans also increased.

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