The Unused Facility Fee - from Standard Bank

[Dave A]

So I went hunting the net to see what popped up. The only serious comment I've found published so far was this - Banks, small businesses and paying for what you don’t use by Graeme Codrington. It seems he took the trouble to follow up on the sms sent out at the end of last month. Personally I found it too short on detail to serve as anything remotely like official notification, and was far too busy dealing with the month end joys of being an entrepreneur.

It seems as well I didn't bother, as this snippet reveals:

On Tuesday, as business people around South Africa had to deal with the news that the economy had contracted by 0.6% in the first quarter of this year, those that have business banking facilities with Standard Bank also received an sms informing them that the bank would now be charging “a fee of 1.2% on all unutilised overdraft facilities”. No further information was given, except to phone the business banking call centre if one had queries.

Those customers who did phone encountered bemused and clueless call centre operators who took a few minutes even to confirm the information with their supervisors. Apparently, no-one in the business banking decision making department had thought to tell anyone else in the business banking division about this interesting new approach to charging customers for services they did not need to use.

And it's not like Standard Bank didn't have time to plan for this announcement - my business bank manager gave me a heads up that this was on the horizon in November last year.

All of which makes the email's lack of clarity on some pretty key specifics even more tragic.

Like that 1.2% - is that per day, per month, or per annum?
Like that 80% threshold you need to get over (or is that under?) - do you get hit with this UFF every day you don't make the 80%, or do you just have to hit the target every month and you're only hit for the months you don't, or what?

And finally, given all that time for careful consideration, to still push out a line like this:

Unlike competitors, Standard Bank have not previously charged a fee, however the new regulatory environment has now necessitated the introduction of this fee

Did they seriously think no-one would check if this was true?

[Mike C]

Did they seriously think no-one would check if this was true?

Yeah - I think that ABSA has had this for some time now. They call it a "Commitment Fee".

[Dave A]

Yeah - I think that ABSA has had this for some time now. They call it a "Commitment Fee".

How is that structured, Mike?
And does anyone know if any of the other banks do this?

[roryf]

Nedbank have been doing this for sometime.Like Mike said,Nedbank also call it a commitment fee.

[Mike C]

How is that structured, Mike?
And does anyone know if any of the other banks do this?

I haven't got the foggiest idea ... and to try and find out on their website is like looking for a needle in a haystack - if the needle is even there. I don't even have any specific correspondence on the matter. I remember that when I asked about it (some time back), I was told by the boss that it has to do with having an overdraft whether we use it or not, and that was that.

[Dave A]

and to try and find out on their website is like looking for a needle in a haystack - if the needle is even there.

My starting point was hunting around the various banks' websites too. They're all thin on specifics (at best) on this sort of fee.

[Justloadit]

My starting point was hunting around the various banks' websites too. They're all thin on specifics (at best) on this sort of fee.

Not surprising, when you steal from your customers, you do not want to make them aware of it if you can, or make it as difficult as possible to find. Something like the online T & C's they change it when ever they want, so after you have read it the first time, you think you have yourself covered, but it changes on the fly and next thing you supposedly agreed to the change.