[Question] Nedbank Bond Admin Fee

[anakin]

Nedbank failed to explain why the monthly admin fee for my bond has increased 250% since two years ago?

From R 17.10 to R 47.00, from R 205.20 to R 564.00 annually. Can they do that? Don't we all have a protection? Is this because I paid my installments well in advance?

[anakin]

Just got a response - what do you guys think --

With reference to below email and previous correspondence regarding your concerns about the increase of admin fees for your Homeloan account, we advise as follows.

• What is the Monthly Service fee and why is it charged?

The monthly service fee covers the cost of administering the home loan account. This relates to communication costs, maintenance costs, system costs as well as the flexibility and convenience to access surplus funds at any time, unlimited access to the Nedbank Call Centre for any queries relating to your account.

• Why has my Monthly Service Fee increased?

In line with our annual pricing review, the Monthly Service Fee was increased. The pricing review incorporates a detailed analysis on the cost of our products, processes and systems. Rising administrative costs as well as compliance related costs resulted in a decision to increase the monthly service fee.

• When did the fee increase?

Effective 01 January 2011, the monthly service fee on your account was increased from R43.89 to R47.00. It is important to note that the increased Service Fee is within the prescribed charges as laid out by the National Credit Act. In terms of the act, banks may levy a maximum service fee of R57.

In this instance of the fee increase from R 17.10, an increase effected over a two year period as follows:

06/02/2009 – Fee paid R 17.10
06/03/2010 – Fee paid R 39.90
07/01/2010 – Fee paid R 43-89
07/01/2011 – Fee paid R 47-00

We trust the above is in order and assure you of our best intentions at all times.

[Justloadit]

A load of hot air, so what about is the interest they charge every month?
A 20 year bond means that you pay back 4 times the initial bond amount, a tidy sum, way above inflation.

[Dave A]

... assure you of our best intentions at all times.

And there's nothing quite as satisfying as excercising your best intentions on a captive market.

[AndyD]

Same old story unfortunately. The bond market is stitched up by a few big players and they're all as bad as each other for these kinds of sharp practices. R17.10 to R47.00 in less than two years for exactly the same product is unacceptable. Rising administrative costs my ass. The price of labour might have gone up but their technology costs should have dropped.

It looks to me like the banking legislation dictates an absolute maximum figure they may charge for these services and Nedbank have chosen to use this figure as their pricing guideline rather than keeping the price relative to their actual costs.

Give them hell!!