Customers to benefit as Westpac slashes fees

4 August 2009

Customers to benefit as Westpac New Zealand slashes fees

Westpac New Zealand says cuts to bank fees announced today will benefit Westpac customers across the board, but particularly those struggling to manage their finances in a difficult economic environment.

The bank today announced that it will cut exception fees on all credit card, savings and transaction accounts, for both personal and business customers, from between $25 and $30 to $9. This covers dishonour fees, automatic payment fail fees and credit card late payment and over limit fees.

Exception fees are charged when a customer has insufficient funds available to make a payment, when an account is overdrawn without an overdraft facility in place, or, in the case of credit card accounts, when a due payment is late or an account goes beyond its agreed limit.

Westpac New Zealand will remove honour fees (currently $25 per event) entirely. An unarranged line of credit charge will be applied when a customer becomes overdrawn without a pre-arranged facility, but this will be a single charge of $9 per month.

The new fee structure will be implemented from 1 October 2009.

Chief Executive George Frazis said it had become clear some of the fees were contributing to a negative perception of banks, as well as proving a particular burden for a small number of customers having difficulty managing their finances.

“Recognising these challenges, and as part of our commitment to customers, I’m pleased to be able to announce across-the-board changes that will help many customers avoid exception fees altogether, and for those that do face them, to ensure they are at a much reduced level,” Mr Frazis said.

“In our view, offering the benefit broadly across our personal and business customers, including credit card holders, is the right approach and will provide significant relief.”

These changes will, overall, reduce fees charged by Westpac New Zealand by around $50 million per annum.

"It is appropriate that we continue to apply a fee for service in some instances, which will help ensure we don't encourage customers to overdraw their accounts and pay additional interest rate charges," Mr Frazis said.

Mr Frazis said Westpac would also continue to invest in helping customers avoid the fees, for example, encouraging the use of online banking, with text and email alert functions available, to assist with account management. Westpac has already been active in promoting its online budgeting tools and ‘Managing your Money’ financial capability workshops.

"These comprehensive and significant changes support our commitment to have a fee structure in place for all our customers which is responsive to the current economic climate,” Mr Frazis said. “This represents the most significant move on bank fees the New Zealand public has seen for a number of years.”

Westpac has been working on reducing these fees for some time, as part of its customer focused strategy for growing its business.

“It is a challenging time, but this is absolutely the right thing to be doing as our customers need us more, and need us to help their own efforts to manage their finances,” Mr Frazis said.

-ENDS-

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