Commerce Commission gets tough with banks charging hidden fees

by Richard Kilner

Story link: Commerce Commission gets tough with banks charging hidden fees

Colossal compensation fees are the weapon of choice for the Commerce Commission, who believe that the measures will finally put a stop to credit card customers being subject to hidden fees.

No less than nine financial institutions have been made to improve their service, the latest of which is American Express. Others include National Bank, BNZ, Westpac, ANZ, ASB and Kiwbank, all of which have been seen to by the Commerce Commission and some of which have been forced to go to court.

American Express was hitting clients who conducted overseas transactions, including Monica Choy, with hidden fees.

Now Choy has been compensated.

American Express did not make plain the 2% fee it charges for currency conversions for credit card transactions.

Geoff Thorn, the Commission’s spokesman, said that the banks would be getting a very clear message about hidden fees.

Such deceit is highly costly to the banks, who have been made to pay out $25m in compensation to customers, more than $500,000 to the Commission and $400,000 in fines.

Far more significant, perhaps, is the reputational firms suffer as a side-effect of being brought to book in this manner.

Choy gave up on American Express the moment she learnt of the hidden charge.

Thorn has also stated that the rigorous enforcement of the rules means that competitiveness over fees will increase, benefiting customers.

The Commission is currently looking at the level of fees that are being charged.