The Unused Facility Fee - from Standard Bank

[Dave A]

Well, I got my bill, and the actual figures explain a lot.

It seems the charge rate is 1.25% per annum calculated on daily balance.
It's a service fee, so it includes VAT.
It's calculated on every day that your OD balance is under 80% of your overdraft limit (effectively a daily balance calculation).

[Blurock]

Do we really have a choice following this route?
All the financial institutions charge the same type of fees.
Some people can only afford an installment solution, and the financial institutions know this, and make it their prey.

Should we maybe join a consumer body and start a class action? An individual can never do it on his own.
The problem with all these additional charges is that it attracts VAT, which makes it even more expensive and unbearable!

[Newretailer]

Another thing that is wrong with the system. The banks and other listed companies want above all else to improve their profits so the shares can go up. In true capitalism, they would improve their profits by getting more customers and getting those customers to use more services/products. As this is hard work, they choose the easy route by simply adding more charges to existing services. The profits look better and the shares go up. Or they decrease the weight of the coffee in the bottle and still charging the same prices.

I have watched banks come up with new charges year after year after year. I wonder what a world would look like where customers and employees are the most important, rather than shareholders?

[callen]

I think we are skinning the wrong buck here. While banks are busy trying to respond to the regulatory environment to keep afloat or if u like to keep an important and necessary bolt of the economy alive, real culprits of this mess are watching from a distance. In my book its the same regulators who had all of us in a false sense of security when the global financial system was getting eroded. Now they know better they just raise the cost for everyone without fully taking responsibility. Tough luck guys !

[Alice Rain]

And then they wonder why so many people do a duck! When I was watching that thing about the R699 pm vehicles, the one guy said that banks are giving people loans etc that cannot afford them and they had proof too. I got a call from Standard Bank offering me more money on my credit card to which I replied I can't afford it. I needed some money a while later and phoned back, I gave the guy [from call centre] my details and he said no you don't qualify but we'll just adjust some figures and of course I got the money! I should also have not qualified for the overdraft but because I trust people and didn't read the documents, months later when filing papers I noticed that my bank manager had actually put in a higher amount for my salary when in fact I had just been locked out of my work-place and thus needed the money and the manager was well aware of this. I went and asked her why she put that amount as I do not tell lies and she said she just wanted to help me but I would rather have been honest and not gotten the money. Now I don't want to report it because I don't want her to get into trouble but where does it end. Perhaps we all, and I mean all of us, need to toy toy and burn down a few banks!

[Houses4Rent]

African Bank is burning already. Their focus is on micro lending, serves them right in my view as its exploiting the poor.

[callen]

@ alice Rain this is the sort of thing that got the global financial system burning in 2008-2009. Started on wallstreet subprime morgage securities were sold world over to banks and investors with their values overinflated (bubble). So when the underlying assets showed their thrue colors the global financial system buckled everyone including innocent taxpayers were burnt. Now in your case you were sold credit when your credit profile was saying no. Yes the bank will make a profit from that transaction especially if u somehow pay up and the employee gets her compansation. It is the ordinary tax payer who suffers. We can't let standard bank fail coz its too impotant to the economy so we will have to take tax payers money to cushion standard bank from failing while holding that toxic asset. Also the toxic asset raises costs for everyone as the bank will make an attend to earn capital to cover that loss. Just tryed to simplify the complex.

[Dave A]

We can't let standard bank fail coz its too impotant to the economy so we will have to take tax payers money to cushion standard bank from failing while holding that toxic asset.

Erm... Are you sure you really meant Standard Bank there?

[callen]

This is the thinking that regulators world over have that even saw bailing out of banks en mass! And today Portugal has just done it. Some big banks (Standard bank is one of the biggest bank in Africa by assets and lending book . So its systemically important not only to south Africa but to Africa). So its collapse will certainly get regulators animated ready to spent taxpayers money - and agreeably so because they 'watch' these banks getting too big to fail through accumulating very risky assets and yet they are supposed to be on the watch on our behalf.

[callen]

"Serves them right" I don't think so! The loser here is the economy of south Africa! World over (the Asian tigers, Germany etc) economic turn around was built on the foundations of micro lending to SMMEs. the Germany Economy has been resilient from the European debt turmoil partly because more than 30% of the economy is controlled by SMMEs in Asia 53%. "exploiting the poor" certainly not, infact its absence if allowed to happen will certainly lead to the exploitation of the poor. your sentiment is based on the high interest rates they charge for these loans. research has consistently proven that if the poor a given smaller loans (micro) to invest in micro enterprises (not consumption) they can meet the risk return payoffs and earn extra to advance their welfare hence the success of these models. in the case of our environment the micro consumer is more into consumption and I cannot blame them for that ! the education has not empowered many for businesses.