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Desperate banks fight to stave off tough action on penalty fees.

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MEDIA RELEASE SF/181. Tuesday September 4, 2007


Banks are desperately trying to lift their game to avoid Parliament passing new laws that would stop them ripping off customers with exorbitant penalty fees.

A Senate inquiry is examining Family First’s legislation to ban outrageous penalty fees and ensure fees are for cost recovery only.

But banks are furiously fighting the move. Today the National Australia Bank (NAB) announced cuts to some penalty fees, but most workers and families will still be slugged fees that bear no relation to the bank’s costs. The ANZ last week trumpeted a fee reduction for low income earners.

In June Family First proposed new laws that would force banks to cut penalty fees so they reflect cost recovery only.

"The banks have had years to cut their penalty fees to a fair level,” Family First leader Steve Fielding said. "Australian workers and their families are fed up with banks ripping them off with exorbitant fees.

“I welcome today’s announcement by the NAB, but really these are token gestures and far too late. They don’t change the fact that banks are still charging penalty fees way over what it costs them."

Family First's proposed laws will stop outrageous bank penalty fees by:

 Ensuring penalty fees are for cost recovery only;  Boosting the powers of ASIC to monitor fees and investigate customer complaints and issues referred by the Treasurer;  Outlawing charging penalty fees for a transaction failing when the customer

could not know it would fail. For example, the Bill would ban inward cheque dishonour fees;  Preserving customers' right to sue banks for damages if they breach the Act.

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