A Report to the Australian Competition & Consumer Commission on Bank Interest and Fees
Does your credit card account contain entries like:
16 Dec 2024 INTEREST ON CASH ADV — $ 1.50
16 Dec 2024 INTNL TRANSACTION FEE — $ 0.35
18 Dec 2024 NETFLIX AUSTRALIA PTY — $12.99
If it does, did you know that the $1.50 bank interest charge and the $0.35 bank fee paid to the bank receive a different treatment than the $12.99 to NetFlix?
The $12.99 debit results in the transfer of $12.99 to Netflix, paying your Netflix subscription. You now owe the bank $12.99.
The $1.50 and $0.35 pays your interest and fees but the bank still maintains you owe them the interest and the fee. The bank takes your money as a Capital Gain and requires you to pay the $1.50 and $0.35 again.
The bank is not supposed to do this unless the borrower does not pay the fees and interest on time. Of course, you did not know the fees until the bank told you, yet the bank claims you did not pay on time; hence, you still owe the fees. They say you were pretty aware of what they are doing, and besides, every other bank in the world does the same thing, and it is “standard practice”. They ignore that debiting a loan account for interest and fees extends the loan, which pays the fees.
If you did not know that the bank charges you twice for the same amount and you agree with it — once as a capital gain and once as interest when you pay off the interest I suggest you do the following.
Write to the Australian Competition and Consumer Commission and complain. The ACCC recommends complaints be sent via an online form, although you can send emails and letters. The complaint I sent is shown below with a few phrases xxxxx out to prevent potential legal action. I have also sent the complaint to my Federal Representative.
There is no point in writing to the bank, the Australian Financial Complaints Authority, or the Australian Prudential Finance Authority as they will say it is legal and accepted practice, and you signed an agreement stating that you were aware of the bank’s actions. We know that banks do not do this when dealing with wealthy customers or with their loans with other banks so why do they do it with customers who have no alternative except another bank?
What I filled out on the form
My bank debits my loan account for interest and fees but does not give me the money I should receive from the debit that extends my loan. They have taken the credit generated by the debit and given it to themselves as a capital gain. They have used a xxxxxxxxx practice to hide this from me, and as all banks seem to do the same, it has become standard practice, and I have nowhere else to go to get a loan. xxxxxxxxxxxxxxxxxxxxxxx.
When queried, they said they could do it because they could debit my account with interest and fees if I didn’t pay on time. They say that I agree with it, which is true. I pay interest and fees when they tell me to do so, and debiting my loan account also pays the fees and interest. I have never agreed to pay interest and fees twice, and particularly with bank card interest of 18% becoming 36%, xxxxxxxxxxxxx. I have asked them to stop debiting my account with interest and fees, but they refuse to do so. I believe that debiting a loan account and not giving the money to the borrower is xxxxxxxxxxxxx.
