Westpac follows BNZ and cuts fees

Tuesday 4th August 2009

Westpac says it will cut "exception fees" on all credit card, savings and transaction accounts, for both personal and business customers, from between $25 and $30 to $9.

This covers dishonour fees, automatic payment fail fees and credit card late payment and over-limit fees.

It says exception fees are charged when a customer has insufficient funds available to make a payment, when an account is overdrawn without an overdraft facility in place, or, in the case of credit card accounts, when a due payment is late or an account goes beyond its agreed limit.

Westpac New Zealand will remove honour fees (currently $25 per event) entirely. An unarranged line of credit charge will be applied when a customer becomes overdrawn without a pre-arranged facility, but this will be a single charge of $9 per month.

The new fee structure will be start on October 1.

Chief executive George Frazis said it had become clear some of the fees were contributing to a negative perception of banks, as well as proving a particular burden for a small number of customers having difficulty managing their finances.

He says there will be across-the-board changes that will help many customers avoid exception fees altogether, and for those that do face them, to ensure they are at a much reduced level.

"In our view, offering the benefit broadly across our personal and business customers, including credit card holders, is the right approach and will provide significant relief."

These changes will, overall, reduce fees charged by Westpac New Zealand by around $50 million a year.

"It is appropriate that we continue to apply a fee for service in some instances, which will help ensure we don't encourage customers to overdraw their accounts and pay additional interest rate charges," Frazis said.

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