"No one knows what fees they've paid in dollars and cents over the last year"
ANZ New Zealand has revealed a record profit of almost $2 billion dollars for the year ending September 30, totalling at $1.986 billion.
ANZ chief executive David Hisco stated that the result reflected the continued strength of the economy, digital innovation and customer service – however, the figure has also yielded questions around the amount of fees customers are being charged, particularly with regards to mortgages and KiwiSaver funds. With banks displaying their fees in percentages rather than dollar figures, it is almost impossible to work out how much you’ve been charged over the course of a year.
“ANZ’s profitability is world class when it comes to KiwiSaver,” Simplicity managing director Sam Stubbs told NZ Adviser. “It must be making a very large profit on what would be over $500 million in KiwiSaver fees this year alone. But their biggest market would of course be in mortgages, as the mortgage margins continue to be very high by global standards.
“The biggest problem is that no one knows what fees they’ve paid in dollars and cents over the last year,” he explained.
“You don’t see those charges as a standalone bill – you get lots of small charges all over the place, and they’re expressed as percentages rather than dollar fees, and that’s the same problem we had with the KiwiSaver fee disclosure. The best thing to do would be to allow customers to receive a consolidated dollar charge that details what products you’ve used and what you’ve been charged over the last month, which is how every other company charges you for their services.
“We need a huge amount of transparency so that New Zealanders can understand when they’ve paid too much.”
Stubbs says that ANZ has made more than Fonterra, Spark, Air New Zealand and Ryman put together over the last year, and that questions should be raised as to whether they are using a dominant market position to charge unfair amounts in fees. If it were mandated by the regulators, Stubbs says establishing transparency would be a relatively simple task.
“The banks are masters of technology – they spend hundreds of millions of dollars on technology upgrades, and they’re perfectly capable of doing this,” he stated. “But they have to be made to do it. Consumer apathy and ignorance has always been their friend, because it allows them to charge people more than they would otherwise be prepared to pay.”
