Banks in hurry to review penalty fees
The announcement by the Australian Bankers Association (ABA) to produce better information on penalty fees appears to have been made in haste and independent of any consultation with external industry bodies or consumer organisations. It is believed that consumer groups are aggressively lobbying regulatory bodies and politicians to ensure their proposition that penalty fees should be regulated to cost recovery only gains currency. The ABA says it has been working with ASIC for ten weeks on their approach and expect to publish information and policies relating to bank fees by the end of June 2007. The Australian Consumers Association and Consumer Action both maintain that high penalty fees are not legally enforceable because they exceed the damages to the institution resulting from the minor contractual breach by the customer.