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In recent times there have been reports in the media regarding the level of default fees charged by banks in certain situations, such as late payment fees or dishonour fees. As a result of these media reports, a number of calls have been received at the Banking and Financial Services Ombudsman (BFSO) regarding the level of default fees.
The BFSO considers complaints made about banks and other financial services providers that are members of the scheme. Where a complaint relates to a fee the Ombudsman will consider whether the fee was properly disclosed to the customer, whether the fee was correctly charged in accordance with the customer’s contract with the financial services provider and whether it was correctly applied in accordance with any scale of fees used by the financial services provider.
Under our Terms of Reference, we cannot consider the amount of a fee so far as it relates to a policy or practice of a bank, unless that policy or practice is in breach of a specific obligation or duty to the customer. The level of any disclosed default fee is a matter of bank policy that this office is unable to review.
In the BFSO's view, the question of whether the level of a default fees charged by banks is unenforceable at law is a matter that would be best dealt with by the appropriate regulator or determined by a court.
The Ombudsman’s Terms of Reference are set by the Board of the Scheme after consultation with all stakeholders. The Board is comprised of equal numbers of consumer and industry directors and an independent Chair.
In recent times there have been reports in the media regarding the level of default fees charged by banks in certain situations, such as late payment fees or dishonour fees. As a result of these media reports, a number of calls have been received at the Banking and Financial Services Ombudsman (BFSO) regarding the level of default fees.
The BFSO considers complaints made about banks and other financial services providers that are members of the scheme. Where a complaint relates to a fee the Ombudsman will consider whether the fee was properly disclosed to the customer, whether the fee was correctly charged in accordance with the customer’s contract with the financial services provider and whether it was correctly applied in accordance with any scale of fees used by the financial services provider.
Under our Terms of Reference, we cannot consider the amount of a fee so far as it relates to a policy or practice of a bank, unless that policy or practice is in breach of a specific obligation or duty to the customer. The level of any disclosed default fee is a matter of bank policy that this office is unable to review.
In the BFSO's view, the question of whether the level of a default fees charged by banks is unenforceable at law is a matter that would be best dealt with by the appropriate regulator or determined by a court.
The Ombudsman’s Terms of Reference are set by the Board of the Scheme after consultation with all stakeholders. The Board is comprised of equal numbers of consumer and industry directors and an independent Chair.
