Bowen concedes bank customers ill-informed, but still defends fees
Published:Friday | October 22, 2010 | 12:00 AM
Bruce Bowen, president and chief executive officer of Scotia Group Jamaica, is conceding that the financial sector has failed to properly arm consumers with the available information on bank charges for them to make more informed decisions.
Bowen made the admission while responding to questions from the journalists on Wednesday night at Mayberry's monthly investor forum on a recent report by the Consumer Affairs Commission (CAC), which showed that commercial bank fees and charges had more than doubled in a year, amid job losses and an ongoing recession.
The survey, which was conducted from July 29-September 17, 2010 and which examined 68 separate fees and charges, showed some banks making upward adjustments of up to 400 per cent.
But responding to the survey, Bowen said that he was of the view that bank charges were "reasonable" in the context of international standards. He, however, noted that the industry has the responsibility of informing consumers of these charges.
"I know that we, as an institution, should have done a better job of communicating upfront, letting people know what was coming, approaching our better clients who were going to be impacted and talking it through, we have talked about it internally and we are trying to react after the fact," he admitted.
But Bowen has extended the blame to the industry, which he said has failed to communicate effectively with the consumers.
"I think as an industry, we need to do a better job of making sure that people can see the choices that are available because the fees are very different between institutions," he said.
"So I think that the more we can put out what those fees are and what people's options are, so that consumers can make informed decisions - 'I like the service here, I'm prepared to pay a little bit more but not that much more so I'm going to go over there'."
Bowen said that the good thing coming out of this survey was it has forced the industry to recognise it has not done as good a job of communicating choices to people as they ought to.
Of the six banks surveyed by the CAC, First Global Bank was identified as the one with the highest fee increase - 400 per cent for a balance enquiry on one's account.
This was the highest increase found among the more than 48 services offered by commercial banks covered in the survey. A 350 per cent increase was also reflected in the fee charge by the bank for setting up a local currency standing order, with the cost moving to J$450, from J$100.
Bank of Nova Scotia and RBTT recorded the third-highest increase of 150 per cent for the period. For Scotiabank, the hike was on local-currency transfer between own accounts, while at RBTT it was US-currency cheques.
Additionally, Scotiabank also added 127 per cent to charges for transfers between dormant local-currency savings accounts.