BNZ its dumping its penalty fees for accounts that go into the red because of insufficient funds, in a bid to improve its image and win new customers.
The honour fees, dishonour fees and unpaid bill fees on transaction (including cheque) and savings accounts, for both business and personal accounts,
will cease on September 1, the bank announced today.
BNZ's parent bank, the National Australia Bank (NAB), was also set to dump the penalties, according to News Limited reports in Australia.
Dishonour fees and honour fees are charged when there are insufficient funds available to make a payment or when an account is overdrawn without an overdraft facility in place.
BNZ charges a $35 dishonour fee and a $20 honour fee. A bill payment that is unpaid due to insufficient funds incurs a $5 unpaid bill payment fee.
In many cases a customer's account is overdrawn due to some payments coming out early or their salary going in a day late.
BNZ chief executive Andrew Thorburn said the fees generated a large number of customer complaints every year and were a source of frustration to customers and staff.
"We believe this is the right thing to do for our customers, clients and staff. It's also a strong business decision.
"It's a competitive market and we're always looking for ways to improve our relationship with customers," he said.
He stressed that the dropped fees would not be recouped elsewhere.
In Australia the same gesture was estimated to cost NAB A$100 ($127.16) million a year, with no new fees planned to offset those lost by axing penalty fees.
A bank memo seen by News Limited said the bank's image had been tarnished by penalty fees.
"These fees generate the most customer complaints of any bank fee and result in more customer complaints to us than any other matter," personal banking executive Lisa Gray told senior managers in the memo.
"We hear stories every day about a customer's pay going in a day late, gym fees or an insurance premium coming out early -- the overdrawn amount is paid or not -- but either way an overdrawn account fee is generated.
"Most of our customers who experience these fees just don't think it is fair."
The move is expected to put pressure on other banks to follow suit.
- NZPA
