Brickbats for banks

More readers' responses to our series on banking:

Philip Ellis, Auckland: I have been a customer with the ANZ for about 15 years and have noted a change in attitude over the past five years. This week I approached the St Lukes branch regarding their honour fee charged to my cheque account. This account was overdrawn on May 6; however, I had transferred funds from my savings account to cover it. The amount was not transferred until May 7, so I was charged the honour fee of $15.

I had my receipt from the ATM machine, and it was dated the same day as the cheque was deposited, so they decided to refund the honour fee. The reason the transfer was not processed until the next day was that the transfer was done after 3 pm, and is not then processed till the day after.

I have asked them if they can automatically transfer funds when the above situation arises. I was told they used to offer that service but don't any more.

Colin Morse, e-mail: One experience I had just yesterday was with the ASB. I went in to our local branch to ask about the high account charges on an account my wife has her wages paid into. As this account has hardly any withdrawals from it I was somewhat mystified by the charges.

I found to my horror that a deposit is classed as a transaction, so they charge you to deposit money in their bank.

Janice Breddy, Glendowie: I was absolutely disgusted last week to find that the ASB charges me 25c to pay my daughter's wages into her account and then they charged her 25c to receive it. She has a tertiary account (she is a student) and is allowed only 20 transactions a month. I was disgusted to learn that they include deposits within these 20 transactions.

She has now opened a tertiary account at the National Bank with no transaction or account fees.

J.K. Prentice, Kaukapakapa: I wish to complain about the invasion of my privacy by the Bank of New Zealand. I presented a BNZ cash cheque for $450 from a BNZ account-holder from Wellsford. The Orewa branch would not cash the cheque without me proving my identity. My identity is my business.

They also demanded a $15 fee to verify that the signature on the cheque was correct. They are the ones who wish to verify the signature - why should I pay? We have a small manufacturing operation and have budgeted $800 for bank fees for the year excluding interest. They should make their money from interest.

Name withheld: I earn a healthy $65,000 a year and recently had a passing bit of bother with the IRD, which meant my account ran in overdraft for quite a while. As I was overseas on business, it was tricky to keep track of my account, and some cheques were dishonoured. The prat of a branch manager who phoned me one day told me, "People like you are high maintenance, and we are not interested in your business."

After I told him how useless I thought his staff at the branch were, and how bloody rude he was, he threatened to call in a $10,000 loan which I was satisfactorily paying off. I said I wasn't in a position to repay it, thanks to the tax department, which he knew about.

"Then we could make you bankrupt," I was told.

I said in that case he wouldn't get his money, and he would also have an interesting time with the Banking Ombudsman.

Bronwyn Callander: I have a big gripe about the National Bank. My husband and I applied for a mortgage last week and were turned down. We earn about $90,000 between us, we spent $23,000 in the last year because we got married, set up a home (ie, whiteware, TV, car, home stuff, etc). Unfortunately, we had no savings in the bank after getting set up, but we were gifted $15,000 from my husband's mother and $10,000 from my husband's sister. So that means we have $25,000 in the bank (which "isn't" our savings), we make really good money but can't get a mortgage! My husband had a previous mortgage with the bank but that obviously meant nothing to them.

We've figured that you've got to be either really "rich" or really "poor" in this country to get anywhere. So now we're closing our accounts and moving to WestpacTrust.

S. Glover, Tindalls Bay: When banks abandon a small town they decimate the community. The main reason for going to a rural centre is to do your banking and along the way drop into some of the shops there and spend some money - lunch, the latest magazines, the odd bit of clothing, etc. What happens instead is that the businesses slowly bleed to death because their customers have gone to the larger centre where the bank is open.

Pam and Terry McMahon, Ellerslie: We have to pay the bank to withdraw our wages/benefits. We have no choice on it being deposited in our accounts and I feel very strongly that we should be entitled to one free withdrawal per pay deposit. Also, why do some banks not allow you to withdraw $10 denominations on their ATMs, meaning that you have to withdraw more money than required?

John Paynter, Kingsland: I have mortgages on my rental properties and have found that the annual statements are wrong if the basis of the mortgage has changed during the year. For example, I changed my PostBank one from monthly to fortnightly payments and found that the statement only showed interest subsequent to the changeover. If I had not spotted this, I would have been out of pocket when processing my IRD return.

At present banks don't necessarily send out a statement at the end of the year. ANZ (who took over PostBank) don't. Hence I have two statements but they do not cover April-May 1999. I have now asked twice for this information. It still has not been received and the tax return due date is nigh.

The other bank I use is WestpacTrust. They are more prompt in providing me service ( I have a relationship manager there). However, they have reverted to the older information system of Westpac rather than the newer and better one of TrustBank. I can no longer get a forecast of my interest payments for the year (assuming no change in interest rate). This makes the job of estimating my mortgage payments in order to apply for an IR23 more difficult.

Ian Jones, Auckland: I have long taken exception to the fact that the interest rates quoted by banks to mortgage loan borrowers do not indicate the true annual interest charge. One would expect, for example, that the interest charge on a $100,000 loan at 8.1 per cent would amount to $8100 over a year. In actual fact, the interest that would be charged is more like $8800 - an apparent annual percentage rate of 8.8 per cent.

The reason is the way the banks calculate the daily interest. They do not use the correct formulae, instead using simplistic formulae which allow them to charge a higher interest charge. Borrowers are being ripped off - big time.

Name withheld: Why is it that one of the best-rated banks in the world, which is far greater in size than the ANZ, charges $US1.22 per month as a simple account maintenance fee when the ANZ charges $US10 for exactly the same service and conditions? Banks think they own and sell money, but the only thing they can offer is service. Without that, they are just loan sharks.

Next week: Your mortgage analysed

The banks - a Herald series

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