Herald on Sunday Editorial: Banks make customers pay every which way

With computerised banking, the fee-charging regime has gathered force. Photo / Thinkstock

It would take elephantine powers of recall to remember when banks didn't charge like wounded bulls for looking after their customers' money.

Traditionally, they gave you a small rate of interest, took your money and got a larger rate of interest on it: the differential between the two was called profit.

Then came the age of the fee. At first, you paid a monthly amount for the privilege of simply giving a bank your custom. This was a notion unknown anywhere else in the commercial world. Imagine your doctor, lawyer or plumber charging a fixed monthly amount to have you on the books, without actually rendering any service.

With computerised banking, the fee-charging regime gathered force. A simple line of programming code made it possible to levy effortlessly and frequently. If you were smart enough to negotiate a monthly fee, rather than a fee per transaction (and then to make sure that you got your money's worth by using eftpos for even the most minimal transaction), you could dispense with the coin of the realm entirely.

On and on it went: a fee for having an overdraft facility even if you didn't use it, and a really big fee for accidentally going into overdraft without having set up the facility beforehand.

By the time online banking arrived, it was all go: you paid to use it, even though you were doing some of the bank's data-entry work for it and should have been sending them an invoice.

And, just to remind you who was in charge, you paid through the nose for not using it: if you were one of those poor fools who wanted to actually go into a branch and talk to a human being, you would find a manual transaction fee on your next statement which, once extrapolated, implied that the human you transacted with must be on an hourly rate of about $750.

So no one should have been surprised at this week's news of a Gisborne couple who were told by their local National Bank that it would cost $100 to reverse an online payment they had made to the wrong account. The office of the Banking Ombudsman admitted to being "perplexed" by the charge, which banks have been levying for some time.

It is, indeed, perplexing - and it should not be beyond the capabilities of the banks' computers to avoid the situation arising, by requiring that the account number and account name matched before putting through the payment. Technology is supposed to make systems more efficient and cheaper, and to improve the customer experience. But for banks, it seems it's just a way of making more money.