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Australian Banks Continue The Squeeze Unchecked

“The Australian Mortgage Industry Report is a joint report from Fujitsu Australia and JPMorgan, focusing on developments in the Australian mortgage industry. The latest report (Volume 5) was published in March 2007 and found that the average Australian household pays A$150-A$170 more each year in banking fees than UK or Canadian customers. Other key findings from the report included: Australian mortgage fees are clearly higher at all stages across the mortgage transaction lifecycle “ In contrast to the UK, where intense competition ensures low mortgage loan application fees, Australian consumers are not always presented with a clear picture when assessing mortgage products. Australian banks are increasingly discounting from the headline rate, as opposed to advertising a lower headline rate, thereby not always providing a clear picture when consumers are assessing mortgage products Australian transactional account banking fees are clearly higher than overseas “ High over-the-counter withdrawal fees in Australia in particular have acted as a mechanism for Australian banks to encourage consumers to use other channels. However, more recently, banks are actively reinvesting in branch networks in an effort to regain strategic flexibility and the pricing power associated with the distribution function Australian credit card fees are higher than international peers “ UK regulators have intervened initially in credit cards, pushing towards cost-plus benchmarks. Intuitively, we should see similar outcomes in Australia to those already observed in the UK, if both sides of Australian politics were not totally in the pockets of big business through their ability to legally make large donations to both political parties. Australian Banks are collectively preying on the Australian consumers and small businesses with excessive fees because they have been allowed to merge and reduce competition and because our corrupted political process allows them to continue to squeeze us, unchecked. More retailers are using surcharges on credit card payments to recoup the costs incurred from card transactions. However surveys show that Australians are becoming increasingly annoyed with credit card fees and were turning to alternative payment methods because of rising credit card surcharges. Many consumers simply refuse to pay the surcharge and buy elsewhere.”

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