Customer outrage over banks’ international transaction fees
Customers can easily be stung with exorbitant costs on their bank account if they don’t pay attention. These are some of the worst costs stinging customers.
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Banking customers are getting slammed with exorbitant charges when using their cards to make online purchases at home using overseas websites and when travelling abroad.
High transaction fees have been under the spotlight of the consumer watchdog, the Australian Competition and Consumer Commission (ACCC), for unfairly gouging customers who splash out more than $40 billion in currency transaction fees.
The ACCC revealed prices were difficult to compare and loyalty to the big four banks was costing customers.
Student recruiter Whitney Steel said she was “furious” after she realised she had shelled out a small fortune in international transaction fees.
The National Australia Bank customer was hit with $140 in seven months in international transaction fees for an overseas European trip to study perfumery.
“I was going through my account and I thought, ‘Oh my god, I’ve got hit’,” the 34-year-old said.
“I got hit with these fees just for using my own money.”
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Some of the fees were charged on overseas transactions she made while in Australia to book accommodation, train fares and tuition.
She was hit again once she arrived in France every time she used her NAB account to pay.
Ms Steel has since switched to another financial institution that does not charge international fees.
More banks are waiving international charges including ING, HSBC, Up, Citi and Xinja.
The fees customers are usually hit with include overseas ATM charges, currency conversion fees and international transaction fees, which can include a percentage-based fee around 3 per cent of the transaction cost.
ING head of daily banking George Thompson said regardless of whether Australian customers were online shopping through overseas websites or using their cards overseas, people were “hit with fee shock”.
“It can occur and you don’t necessarily know about it until you see it on your statement,” he said.
Mr Thompson said customers had to sniff out domestic bank accounts that waived these costs – ING dumped them in 2017.
He said ING’s primary banking customers – who hold an Orange Everyday account – were reimbursed about $28 per year on international ATM charges and about $52 on international card purchases.
Its figures also showed one customer who travelled to Asia for six months last year saved $1540 in ATM withdrawal fees alone.
National Australia Bank general manager of everyday banking Simone Van Veen said NAB had a “fee clean-up last year”.
“This has included the removal of fees on top of the conversion rate when issuing or cashing foreign currency,” she said.
She said NAB would continue to listen to customer feedback to “make changes so any costs incurred by the customer are more visible and easier to understand why they’ve been applied”.