The vast majority of South Africans would not know if their bank had overcharged them, because their bank charges are too complicated or they don't bother to check them regularly, according to research amongst visitors to www.justmoney.co.za - South Africa's online guide to money.
When customers were asked if they would know if their bank had made a mistake with their bank charges, the www.justmoney.co.za Poll found:
- 39% said No - "my bank charges are far too complicated"
- 43% said Maybe - "but I do not always check my charges"
- 18% said Yes - "I always check if my charges are correct"
What about you? Are you the right bank charges or could you save money? Click here to find out.
www.justmoney.co.za says that customers are confused by the range and complexity of different bank tariffs, and often it is not clear from a bank statement what the charges relate to. As a result many people do not check their monthly statements or simply do not understand them.
Paul Beadle, managing director of Justmoney.co.za, says: "It's frightening that almost two out of five bank customers would not be able to pick up if there had been a mistake made on their bank charges, so they won't know if they are out of pocket.
"The mistake might not even be the bank's fault. Sometimes companies take a debit order twice in the same month, incurring double charges. Although the mistake is usually picked up and the debit order re-paid by the company, the bank charge will still stand unless the customer spots the overcharge and requests a refund."
Beadle says that the complexity of South African bank charges, and the fact that the majority of consumers do not understand them, means that many people could also be spending too much on their banking.
Beadle explains: "There is a bewildering variety of pricing options, with some banks offering four or five different pricing structures for the same account, ranging from ‘pay-as-you-transact', to ‘managed fee' and ‘rebate banking'. The banks say that this provides people with more choice, but in reality it is too confusing for consumers, and often even bank branch staff cannot advise on which is the best pricing option.
"The best choice of pricing option will depend on the number and type of transactions you perform, which will dictate the amount and cost of the charges you incur. But because consumers do not understand the way their bank charges are calculated and applied, they have no idea whether they are on the most cost-effective pricing option or not."
www.justmoney.co.za says that by using its bank charges calculator, many visitors to the website have discovered that they are paying too much for their banking, and could save on average between R75 and R100 a month by moving to a more cost-effective bank account.
Beadle continues: "R75 a month may not sound like much of a saving, but with the current economic conditions, saving R900 a year on bank charges, plus additional savings by shopping around for cheaper credit cards and mortgages, as well as home and vehicle insurance, could save a household thousands of Rands each year."
www.justmoney.co.za recommends that banking customers should:
- Check your statement each month. Compare your charges with your ATM receipts, petrol slips and other bills to ensure they are correct
- If you don't understand a charge, ask! Check with your branch if a charge doesn't make sense, get them to explain and query it if you think it's wrong
- Shop around for a cheaper deal. Compare accounts to see if you can get a more cost-effective bank account or a pricing tariff that better your needs
www.justmoney.co.za has been created to help South African's save money by demystifying financial services and helping them to make informed decisions about their money.
Completely independent and unbiased, www.justmoney.co.za also features a host of comparisons, tools and guides, enabling people to search and apply for new products, all online and completely free of charge