News

ATM fees under fire by SA watchdog group

May 21, 2012

ATM fee disclosure — or rather, the lack of it — has drawn the ire of a South African consumer advocacy group.

A recent report in Businessday said that National Consumer Commissioner Mamodupi Mohlala-Mulaudzi criticized the lack of transparency on ATM fees. "When you withdraw money, you must … know the costs of that service," Ms Mohlala-Mulaudzi said.

The National Consumer Commission recently called on banks to display withdrawal fees before a transaction was carried out. However, Sugendhree Reddy, director of products at Standard Bank, told Businessday that updating systems to provide such a service would be prohibitively expensive.

Besides, she said, ATM fees were priced as part of a package of services. "We have call centers — we don’t charge for those. We don’t charge for opening an account," Reddy said.

However, Charl Nel, spokesman agreed that it would be helpful to remind customers what they pay for a withdrawal. But, he said in the article, the "bigger question" concerned fee structuring. "A simpler option would be if all banks follow our simple, transparent approach and charge fixed fees per transaction and not ask the consumer more for the same transaction if he or she just increases the amount withdrawn."

For more on this topic, visit the bank/credit union research center.