Some decline in charges, but commercial banks continue to rack up user fees
Published:Friday | September 23, 2011 | 12:00 AM
Sabrina Gordon, Business Reporter
The island's commercial banks have continued to rack up user fees with one increasing its charge for a letter of undertaking by 396 per cent over a eight-month period.
The data are contained in a comparative study undertaken by the Consumer Affairs Commission of fees charged by the six commercial banks during the periods October 2010, March 2011 and June 2011.
The highest fee increase recorded, according to the survey results, was 396 per cent, reflected in the cost of a letter of undertaking charged by CIBC FirstCaribbean International Bank Jamaica for both retail and commercial customers.
In October 2010, the Consumer Affairs Commission under mandate by then Minister of Investment, Investment and Commerce, Karl Samuda, conducted a survey on bank charges following complaints that they were hiking fees to counteract the effects of the Jamaica Debt Exchange.
The result at the time showed that banks were indeed hiking fees, and the March and June 2011 data indicate that in some cases fees have been increased since the release of the October 2010 survey.
Some of the commercial banks contacted, including CIBC FirstCaribbean, did not respond to Financial Gleaner's invitation to comment on the increases.
However, Scotiabank's chief financial and administration officer, Jacqueline Sharp, said "we review our fees on an annual basis every November, and the last review was done in November 2010. While most of the fees remained the same, a few items were increased."
"These increases were reflective of the increase in operating costs associated with providing the services," Sharp said.
In the case of Scotiabank, the latest survey shows marginal increases in some services, from a low of five per cent to a high of 24 per cent.
The 24 per cent movement was for payment or transfer using the bank's tele-banking system. The fee for inward international wire or telegraphic transfer moved to $2,950, up from $2,400.
Other fee increases in Scotiabank services were for withdrawals and deposits, annual credit-card fees and approval of transactions using multilink automated machines.
The costs associated with screen print and interim statements were. however, eliminated,while stop payment or cancellation orders on foreign currency accounts were reduced by 61 per cent from $38 to $15.
While the cost of some services offered by CIBC FirstCaribbean remained unchanged, increases were reflected in at least 27 services from a low of 1 per cent to as high as 396 per cent.
Apart from the letter of undertaking, other significant increases were seen in services such as early closure of account, which moved to $1,200 from $359.06; local currency-returned cheques, which went up by $138 per cent to $960.00 from $403.44, and withdrawal from savings account, up to $150 from $70.60.
At the same time, the bank reduced the cost of standing order on local currency by 5 per cent to $250, down from $262.24 recorded during the 2010 survey. However, the latest data show that the bank has implemented a charge of $21.19 for failed transactions at multi-link automated banking machines.
Fees at National Commercial Bank remained mostly unchanged with increase reflected only in the costs for over limit on current account, as well as audit certificates, credit report and interest rates on credit cards.
The highest increase in fees for NCB was over the limit fee, which went up 31 per cent, moving to $2,232.50 from $1,700.
Audit charges increased by 25 per cent to $3,000 from $2,400. A marginal upward movement of 8 per cent was seen in the charge for credit reports from $3,000 to $3,250.
First Global Bank, in which the highest change in fees were reflected in the October 2010 survey, showed some significant movement in the current findings.
A 333 per cent increase was reflected for returned cheques, moving to $26 from $6.
Costs associated with both over-the-limit fee and outward telegraphic transfer doubled.
The fee for a certificate of account balance on local currency also reflected a 150 per cent increase, from $1,000 to $2,500.
While fees at RBC Royal Bank was on the up, declines was reflected in several of the services.
Transfer between accounts at RBC Royal Bank dropped by 33 per cent, to $200 from $300; cost of cheque books for foreign-currency accounts fell by 71 per cent from $58.75 to $17, and stop payment was also down 46 per cent, from $71 to $38.
The survey results also showed that Pan Caribbean, a small player in the local commercial-banking sector, had increases in less than half the number of services it offers to the public.