Dishonour? A letter to St. George Bank

3 01 2007

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(emailed via their website)  Dear St. George Bank,

A few days ago I was charged a Direct Debit dishonour fee of $45.

I’ll spare you the circumstances as to why my account had insufficient funds to pay my rent, but suffice to say, when I’m on holidays over Christmas/New Year, and one of my clients is unexpectedly and uncharacteristically two weeks late in paying my monthly invoice, checking my bank account is not high on my list of things to do.

I am not pleading leniency here, I understand there are 1001 reasons of widely varying legitimacy as to why customers may have insufficient funds to cover an automatic withdrawal, and ultimately the responsibility is mine to ensure I have sufficient funds. My complaint here is the magnitude of the charge.

From my preliminary searches, it seems most (possibly all) Australian banks have a similar charge for direct debit dishonour.

I absolutely cannot conceive how it costs the two financial institutions involved so much to process a defaulted direct debit. How can two financial institution’s computers talking to each other, resulting in a notification letter posted to me possibly cost $45?

I have been a St. Geroge Bank (& Building Society) customer for longer than I can remember, probably more than 25 years, since I was 10 years old or younger. Your records would be more accurate than my memory.

But I’ve had enough. In me you’ve now created a vocal and passionate critic of this scheme that reeks of collusion. Even the word “dishonour” is a misnomer – the greater dishonourable parties here appear to be Australian banks.

I am now about to embark on a research project to identify a financial institution with substantially lower fees, and if I find one, I WILL close all three of my St. Geroge accounts.

“What is the outcome that you want?”

1- Disclosure of the true costs to Australian banks for each direct debit dishonour, information that has been kept secret from Australian consumers.

2- In the likely event dishonour fees are substantially (likely exhorbitantly) in excess of true costs, a dramatic lowering of such fees.

I welcome any response St. George would care to make to my complaint.

Yours sincerely,
techydude

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9 responses

30 10 2007
John

Anthony,

Well done, mate! I recently underwent an experience with St. George scarily simialr to what you describe in your letter.

I feel the same frustration(s) you describe, what are we paying for? I can only assume that it is record profit margins year after year. I really feel that many of these larger corporations should be forced into adopting more transparent business models so that consumers can be made aware of what they are paying for. If a Carpenter handed you an invoice that said “Wall” with a price on it, wouldn’t you be entitled to request a more detailed explanation of the costs?

Anyway, I am starting to rant :p Would you mind if I took a copy of you above correspondence and used as a template for my own complaint? I turned up your page within about 1 minute of starting my (very firsts) search into what my dishonour fee was actually paying for. Your letter sums everything up so well…

Thanks for your time.

-John

12 02 2009
Grant

2 years late to the post but here you go,
I just got off the phone with St.george enquiring into the $45 dishonour fee that they gave me for not having $3 in my account, the difference was 19 cents.

Basicly what they said was:

When you enter a direct debit scheme you contractually agree to that company that you WILL have the money there available.

And i asked well what does that have to do with $45? What do you do, send gold plated checks through email?

The lady then went on with a story that went like this:

“St George uses a system of “tapes” to keep records.” *At this moment i felt like i was in the 90’s*
“They keep going for a period of time and when a dishonour fee occurs they must send these “tapes” to somewhere to get them processed to move money to the direct debiter in which you have signed up for”

So basicly, there trying to say they use an out dated technology to process there money.

I don’t know about you guys but incurring a $45 bank fee on a STUDENT ACCOUNT seems a bit ridicoulous to me, but they began to tell me that the only difference is the normal $8 fee for account holding is not required on a student account.

So let’s sum this up:
St.George are out dated wankers who cannot upgrade to digital because they love bullhitting about fees.
And B:
They are giving STUDENTS enourmous sized tranaction fees which is the exact oposite of what those accounts are designed for.

Im going to be closing my bank account tomorrow when i pay this bullshit fee.
And am going to join a less bullshit bank.

Best Regards,
Out $45 for a 19cent difference.

12 02 2009
Grant

Oh, i would also like to add that there records only go back 3 months *The exact date that they gave me was my birthday actually that there last records are on, which i thought was ironic*

The date i got charged this fee was 19 days before that date.
And they have no records of it.

I immediatley said:
“Wait so you don’t even have any records that this happened, and you are charging me?”

This is when she started talking about the tapes.

So guy’s if you feel like really getting your $45 back, sue them.
They have no proof, they said it themselves, they only keep 3 months of records.
Im sure any legal action would cause them to just remove the fee as they know without proof they have no legal case.

Just remember to burn all your paper records. ^_^

14 02 2009
techydude

hi Grant. 2 days, 2 years, doesn’t matter – the issue hasn’t changed one iota :(

frankly i doubt the technical veracity of the story they spun you. whether they do or don’t (still) use tapes (that need to be manually handled to access “old data”) doesn’t even make any sense.

when a withdrawal transaction occurs, ANY withdrawal transaction, your balance has to be checked to see if there’s sufficient funds for the requested amount. if it’s a teller in the bank, they’ll say “sorry sir, insufficient funds”; ATM: beep beep “sorry, insufficient funds”; online: click click, “sorry, insufficient funds”. none of these incur an charge for having insufficient funds for the transaction.

but a Direct Debit, one of the newer (relatively speaking) darling products of the banking industry because of the convenience brought to bank customers able to interact with other bank’s accounts, thus increasing $ throughput in/out of the account, thus increasing bank revenue: $45 fee for “insufficient funds”, a fee administered almost IMMEDIATELY it occurs – this can’t possibly have anything to do with needing to go back to tapes using manual handling – the transaction is denied and the fee levied ON THE SPOT in real-time, by computers.

IF there are any “real” costs incurred by my bank for a dishonoured DD, it’s because those costs have been deliberately designed into the process so that undisclosed markups can be charged on them. as St. George said to me in reply to my original complaint, they can’t/won’t disclose details of these charges because it’s “commercially sensitive information”. neat system, huh?

my initial searches didn’t reveal ANY mainstream banks whose dishonour fee was significantly lower ($25 might have been the cheapest, better for sure, but still ridiculous), reinforcing my perception that these cunts are ALL required to inter-operate with other banks in this manner, and thus can hide behind that excuse & reap from the rape.

however St. George being gobbled by Westpac (been there, done that, never again) is now enough to push the issue that this year I will be changing banks. the question remains: which one? here in Melbourne i’m thinking Bendigo might be the lesser of all evils.

14 02 2009
techydude

remember, in the earliest days of ordinary consumers able to access Direct-Debit facilities (second half of the 90s?), these fees were nowhere near this scale of rape. they’ve grown way out of proportion for no apparent reason (to anyone outside the system at least).

7 09 2009
techydude

Bingo!
First the NAB announced it was ENDING most if not all of its dishonour fees, then St. George followed suit lowering its dishonour fees to $9 starting October09.

Bout freakin time…

24 09 2010
Tony

The truth is that it costs them zero to dishonour a cheque and even if it did cost a few cents they could afford to absorb it if it wasn’t for their GREED!
It’s the same bullshit that holds your money for 3 days while they clear a cheque (it used to be 5 days or longer until there was an outcry). 3 days for an electronic transfer that takes a millisecond? Liars claim that they must wait until the actual cheque is cleared. Yes I know the cheque must be physically presented but this process could be handled overnight, they manage to process their internal documents overnight. They are criminals in the real sense. If you perform some in depth research into the practices of all banks you’ll see that they are crooks who create money out of thin air and then charge us interest for lending it to us. The whole western banking system is a scam which should be torn down and rebuilt.

31 08 2011
Gloria

Just closed my St George accounts and joined a credit union. Screw the big four

27 09 2013
stephanie

I experience St George taking money as a dishonored fee twice.
Once for something that went out as I didn’t receive the money back though it states it was taken from my account and I received the item I purchased.

the second time was for my phone bill I was not aware was coming out. Other places say they try a couple of times it was only tried once before I got the fee. I was not even warned that my account was being charged.

Its bullshit. You should at least be told before Before it happens and have more then one chance. And you shouldn’t get charged if your money was taken out!




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