Credit card holders encounter high fees in Australia

[img_assist|nid=7846|title=|desc=|link=none|align=left|width=80|height=100]According to a review commissioned by the banks in Australia homes of pensioners are mortgaged so as to make up for the credit card debts accumulated.

A report made in the course of the review on the Code of Banking Practice shows that per arguments of consumer groups and financial advisors, while some banks have set up dedicated teams of staff skilled in dealing with hardship cases, others are just concerned to get their money back.

The code should be rewritten to delete references to "standard fees and charges" as it is suggested by the paper, which was prepared by an independent reviewer, Jan McClellan, and Associates for the Australian Bankers Association.
Fees and charges should be defined as "the reasonable recovery of costs incurred by the banks when customers default on their repayments, exceed their overdraft limit or are overdrawn on their account".

In case the banks adopt the definition it will result in significant reductions in the $10.5 billion of fees charged by the banks in 2006-07 — an amount that has increased three times in 10 years.

As per assertions of the NSW Office of Fair Trading fees charged frequently were irrelative to the cost of the service.
"There is relatively little cost attached to most transactions", and in the case of monthly account fees: "It is not clear how account keeping fees can be justified when no product can be made available without an account being kept."

"Credit card over-the-limit fees have soared from nothing in 2000 to more than $30 a pop," notes Family First senator Steve Fielding, Parliament's crusader against excessive bank fees.

"Bank fees are out of control, and banks are unlikely to stop charging outrageous penalty fees."
The banks should consider the Code of Banking Practice which was developed by the Australian Bankers Association as the industry guide to ethical conduct.

The review urged that the code makes specific reference to reverse mortgages — loans, often taken out by elderly people, that are not serviced but repaid when the property is sold — making it clear that the ethical code applies to them.