'Little choice among banks'

South Africa's banking fees remain among the highest in the world in spite of the ongoing flood of complaints from the consumers.

And there seems to have been little improvement in the situation since the Competition Commission held its banking inquiry - which produced 28 recommendations - last year.

"I do not think we will ever stop getting complaints about banks and especially high banking charges," said the complaints investigations manager for the Banking Ombudsman's office, advocate Johan Simpson. "It is a continuous problem."

He said some bank charges were now regulated by the National Credit Act.

"But the bulk of bank charges are, unfortunately, unregulated.

"There are no laws, no regulations, giving a ceiling to the amounts the banks may charge. It is regulated only by the competition between the banks," he said.

Simpson made these comments when taking part in the SAfm Radio panel discussion programme, the After Eight Debate, on the topic of "exorbitant" banking charges.

He said the ombudsman's office received a constant flood of complaints - everything from home loan charges to monthly service fees on loan accounts, debit order fees, overdraft ledger fees as well as deposit fees.

"What it comes down to is the fact that the banks charge you for just about every single interaction," said Simpson.

"The unfortunate thing is that we, as the banking ombudsman, have no power to regulate banking charges... only the government can really regulate banking charges."

Simpson said he had seen little change in the situation since the banking inquiry.

"Our impression is that banks often decrease certain fees, but then increase others.

"That is why it makes it so difficult for any consumer to compare apples with apples when opening an account - extremely difficult to compare whether you are getting better service or getting cheaper service."

Simpson said almost all the personal banking accounts in South Africa were held by the "big four" banks and they could compete only by stealing customers from each other.

But, he said, some people might - under the present circumstances - consider going outside the big four to do their banking.

His concern about banking fees was shared by a second member of the debating panel, Ina Wilken, an independent consumer activist.

She said Absa Bank had increased its fees twice in the past year.

"That is not on for South African consumers. We (were) going through extremely hard times for the past 18 months."

Wilken mourned the lack of competition between banks in South Africa.

"For consumers in South Africa there is no choice.

"The one bank will increase; the others will just wait for a few weeks and they will increase."

So, she said, there was little point in consumers moving from one bank to another.

She also spoke angrily about bank fees on deposits, charges that did not exist overseas.

"I feel that is totally unacceptable."

Wilken said those who suffered most under the present system were "the bulk of people" who could least afford it.

She called for a round table conference for all concerned.

"The time has come in South Africa when we should all get together, sit around a table and see what is best for the man on the street."

• This article was originally published on page 2 of The Daily News on December 29, 2009