Peter Espeut | Those rapacious banks
Banks ain't what they used to be. At about age 10, my father took me to open my first bank account at the newly opened Bank of Nova Scotia branch in Liguanea Plaza (across the street from where it is located today) under Roger Clarke's famous guango tree.
It was a savings account - I can even remember the number (1545) - and I hugged my passbook all the way home. If my memory serves me well, the savings interest rate then was six per cent, and every six months, I would take my passbook to the bank to have them enter my interest earnings. In those days, the bank tellers calculated the interest on adding machines and posted all entries by hand, copying from my account card. The only fees I was asked to pay was stamp duty on my withdrawals, which went to the Government.
Those were the good old days.
Then came computerisation - and interest payable to me monthly and withholding tax payable monthly to the Government. I still had my passbook, but entries in it were posted by a sort of printer. You could track, over time, the individual computations month by month: what came to me and what went to the government. But the interest rate had fallen - to somewhere around one per cent. Saving in banks was no longer such a good idea.
Then the use of passbooks was discontinued. Now, if I wanted to know my savings account balance, I had to ask at the branch. But if I wanted a detailed statement showing interest, taxes, etc, I had to ask for a printout, for which I had to pay a fee.
Then the banks introduced automated banking machines (ATMs), where I could go to check my balance and withdraw my money without going into the branch. The bank encouraged us to use these ATMs because, they told us, it saved them paying staff to do it, and it reduced congestion in the banks. At one time, they charged a fee if you went to a live teller as an incentive to use the ATM, which was free.
Now they charge me every time I use the ATM. And every time I do a transaction in the branch. So when I draw out my own money, they charge me a fee in addition to the Government's stamp duty. And they pay a very low interest rate. It seems to me that whatever they pay out to me in interest, they more than recover in bank fees. It is rapacious and unconscionable.
I maintain a foreign-exchange account denominated in pounds sterling for when I travel to the UK. I don't go there often, and so I leave the funds to grow interest until I need them. Lo and behold! They declared my account 'dormant' and subtract a little out of it each month. The amount they subtract is greater than any interest I might earn, and so my account tends to zero.
Their argument is that it costs them money to maintain a dormant account. I challenge that! It must cost them even more to maintain an active account since transactions have to be posted, requiring more calculations.
Plus, they see me in the bank more or less every week. Why not ask me about my 'dormant' account? They have my address (for they send me my credit card statements every month), and they have my telephone number (they never fail to call me to when I am overdrawn). Yet they can't call me to ask me about an account, which they call 'dormant', which I am allowing to accumulate interest. They just charge me a dormancy fee. This borders on hypocrisy and corruption!
I am told that this dormancy business is of concern to them because their own staff watches which accounts have no transactions and steal from them. Why must I suffer because of their thieving bank staff?
I am pleased that opposition MP Fitz Jackson has brought to Parliament a bill to regulate the fees that banks charge their customers. It is not surprising that the banks are fighting it. MP Jackson is calling for certain services and transactions to be free. They accuse the Government of wanting to introduce price-fixing; they say the market must determine the bank charges.
But then, all the banks cartelise, getting together and fixing bank charges to subvert the market. I deposit my money in the bank, but they determine the interest they pay me and what fees I must pay. Sounds like financial rape!
Ride on, Fitz, ride on! Those rapacious banks need to be regulated!
- Peter Espeut is a sociologist.
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