Why are my bank charges so high?

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25/07/2018 Excessive bank charges are a usual cause of frustration for consumers. Many consumers don’t understand some of the charges that mysteriously pop up on their statements, so they just accept them as the normal charges and move on.

Banks are obligated to tell you about any and all charges you may incur when you bank with them. Every now and then, depending on different events in the economy, banks will adjust their pricing - you must also be duly informed of such changes. This is so you are aware of the charges debited from your account. But what happens if what you thought you would be paying is not what you end up being charged?

Hidden charges

If you are a victim, you may actually be up for a refund. As aforementioned, banks must disclose all the fees applicable to your bank account upfront. Hidden charges go hand-in-hand with misleading advertising or marketing. This is particularly a problem if you open the account telephonically because sometimes consultants neglect to inform you of the period within which the marketed charges apply or the criteria that would otherwise qualify you for the discounted or lower fees.

As a consumer, you are entitled to pay what you are offered - i.e. ‘Bank charges fixed at R50 for two years if you maintain a balance of over R500’ means the bank can’t charge you a cent over R50 until after two years. Be careful though, the fine print on such offers often excludes events such as the tax hike mentioned earlier.

If you find that you were being charged something other than what you signed up for, you should get in touch with your bank and have them explain the discrepancy. If it is a definite case of misleading advertising or marketing, you should go on to lodge a formal complaint about it.

Know your charges

The most important thing to do before you start pulling hairs is to understand your bank’s pricing structure. For instance, the charge for withdrawing at your bank’s ATM can be double if you do so at a different bank’s ATM. It is important to understand the services you pay for. These also differ from bank to bank so if you switch banks, don’t assume everything will remain the same.

Also, read communication from your bank! Sometimes sudden increases in bank charges are a result of a general increase in prices. For instance, the increase in the VAT rate saw most banks increase their charges.

Part of knowing your charges also includes understanding your own transaction patterns. There may be something in the water if no price increase was announced and you made ‘routine’ transaction all month long. So it may be worth it to contact your bank and find out why your charges have suddenly gone up. It may sound unbelievable, but banks and even machines make mistakes too sometimes.

Resolver tip: Check your bank statement regularly, it is usually the quickest way to spot unknown and extra charges. In some instances, you may find that the extra charges are a result of an unauthorised transaction in your account, in which case you should alert your bank of suspected fraud.

The rule of thumb for bank charges is simple, if they have increased and you don’t understand why, ask your bank!

Unfortunately, banks won’t always tell you how you can avoid unnecessary bank charges so you must do the work yourself. Always compare the benefits of each banking offer or package and go for the one that saves you more while still serving your needs. Often more than not, you will find that the difference is an add-on service or benefit that is off no use to you!

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