Wednesday, April 24, 2024

Empower bank customers!


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The Fair Trading Commission has suggested that Barbadian consumers are generally not empowered to make comparisons among commercial banks.
In a recent report on local banking charges, the FTC indicated that while the average customer was aware of the various charges, they did not understand the rationale.
“This has a tendency to create scepticism among customers regarding the legitimacy or authenticity of the charges,” the consumer protection body stated.
Banks indicated that monthly charges for servicing accounts, charges for specific transactions and charges for exceeding authorised overdraft limits were largely intended to drive consumer behaviour.
Some of the charges were imposed primarily for deterrent purposes while others had a cost recovery component so as to allow the bank to operate more effectively and efficiently.
The FTC suggested that the Barbados Bankers’ Association educate the public about changes in legislation, costs and policies which were likely to affect them.
The bankers should also “seek to enhance the ability of customers to compare and contrast products on offer by the banks by offering more standardized definitions on the services that are offered”, the FTC said.
With regard to some charges related to sundry items and ATM charges, the report said it appeared that some banks levied a charge that was not entirely reflective of the cost of delivering such services.
“Though this may not be deemed anti-competitive due to the oligopolistic structure of the market it may raise concerns as it relates to consumer welfare,” it said.
The FTC noted that the lack of transparency limited customer mobility.
The report also recommended that banks should frequently review their fee structure to make sure the fees are relevant to the respective services offered.
“Where a new charge is introduced to recover the cost of delivering a particular service, the amount charged ought to be reflective of the direct incremental costs.
“The incremental costs could also reflect the component of the service that can be controlled by the respective institution,” the FTC suggested. (NB)


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