Fee gouging by big banks

Banking with Australia’s big four banks is not a cost-effective exercise for many Australians and they could save themselves a significant amount by going elsewhere, according to new research released by InfoChoice.

The research, released today, suggests that customers of the big four banks could save themselves up to 21 per cent a year in fees and charges by looking around for a better deal.

The InfoChoice research claimed that major bank customers could save up to $6.7 billion a year on home loans, $356 million on credit cards and $440 million on financial lending products such as car loans.

Commenting on the research, InfoChoice chief executive Shaun Cornelius said that when comparing the total amount of interest and fees paid by customers over a year, the big four banks remained significantly more expensive than many smaller institutions.

“On average, the cost of banking with the majors is an extra 21 per cent, or $4,000 per person, in fees and charges each year — simply because customers are too reluctant or too lazy to find themselves a more competitive deal,” he said.

Cornelius said that the data suggested that consumers under financial strain would be well advised to start looking around for more competitive deals in advance of expected further increases in interest rates.