Survey Shows Increase In Bank Service Charges

A survey on bank charges conducted by the Consumer Affairs Commission (CAC) has shown that with the reduction of interest rates, there has been an increase in service charges by banks on various products.
Speaking at a press briefing, on (October 5), at the Ministry of Industry, Investment and Commerce, Minister, Hon. Karl Samuda noted that the highest recorded rate of increase within the survey period was over 400 per cent.
“As it relates to enquiries on balances at the Automated Banking Machines (ABM), this moved from $6 to $30 and this was at the First Global Bank. That was the highest recorded increase. They also had a 400 per cent increase in the point of sale decline on the bank’s machines from $6 to $30,” Mr. Samuda said.
“In the area of personal services, the highest rate (of increase) was 122 per cent and the lowest is one per cent. For transfers between accounts, the highest was 150 per cent and the lowest 25 per cent,” the Minister said.
According to the survey, the Bank of Nova Scotia charges $150 for the withdrawal and deposit of money, which is a 50 per cent increase over last year. At the National Commercial Bank (NCB), persons are charged $200 to withdraw money from their account and this is a 122 per cent increase in service charge from 2009.
For personal loans, the largest reduction in interest rates has occurred at the Bank of Nova Scotia (BNS). The bank charges a minimum interest rate of 13.25 per cent, down from 19.75 per cent. The least reduction in interest rates occurred at the Royal Bank of Trinidad and Tobago (RBTT), with a charge of 20.50 per cent, down from 22 per cent.
On consumer loans, the largest reduction in interest rates has occurred at both the Bank of Nova Scotia and the National Commercial Bank. Both banks charge a minimum interest rate of 17.75 per cent. The least reduction in interest rates occurred at RBTT, with a charge of 20.50 per cent, down from 22 per cent.
In the area of annual fees for local credit cards, a service charge of $2,850 is paid by customers at RBTT, an increase of 90 per cent. The lowest is charged at First Caribbean Bank at a rate of $1,450, an increase of 12 per cent.
Mr. Samuda noted that the survey conducted has shown that in some instances, “you have banks reducing their interest rates quite dramatically, but having the charges increased sufficiently to indicate that they are seeking to make up for the lost ground from the reduction in interest rates.”
“The results of that will play out as we go into further examination of this data and to hold discussions with the Jamaica Bankers Association, to see in what ways we can work together. This survey was not done to penalise people for doing business, but this is information gathering for the purpose of disseminating throughout the country,” Mr. Samuda argued.
The survey, which was conducted between July 29, 2010 and September 17, 2010, will be published in the major newspapers. Details and conditions attached to rates and fees are also available on the CAC’s website at: www.cac.gov.jm.