A colleague recently put R50 worth of petrol into his car to help him hobble to work. The station’s forecourt swipe machines were out of order so the petrol attendant recommended he go into the convenience shop and draw the necessary cash. The colleague is an FNB client and sensibly subscribes to an all-inclusive package that costs him just R59/month for all his banking needs, provided he stays within the current parameters of that package.
Knowing the costs of drawing cash from a non-FNB machine would be high, he drew just R100 from the Absa-branded cash dispenser – the only machine and the only denomination available. The petrol pump attendant wasn’t about to allow him to go off to find an FNB ATM and he certainly didn’t have the time to go searching for one. He paid what was due and thought nothing more of it – until he looked at his bank statement online to see: “Non FNB fee R32.” (More on that line description in a moment.)
A charge of R32 to draw R100?
Should he have read the small print in the contract he signed when he agreed to the R59/month all-inclusive package? Absolutely.
Would he have understood the small print? Maybe.
Would it have made the slightest bit of difference in his predicament? No.
He needed the fuel that had already been dispensed and now had to make a plan to pay or face a showdown on the forecourt. Besides, who would have thought he’d be asked to pay 32% of the value of his transaction to draw a meagre amount of cash?
FNB head of pricing James Fowle says my colleague could have drawn R3 000 – therefore paying a fee of just 1%. Not an entirely unreasonable proposition – except it would have put him in an overdrawn position, which would have caused additional complications.
FNB CEO Michael Jordaan conceded he was surprised the charge was so high and admitted it was excessive, promising to “look into it”. Effectively, it’s prejudicial to lower income earners who draw small amounts frequently.
This case raises a number of interesting issues. What would an Absa client on a similar all-inclusive package pay to draw the same amount of cash at an FNB ATM? Experience suggests it would be a punitive amount. As bank packages aren’t directly comparable, getting a precise number – as we have reported in Finweek’s annual bank charges research – would be nigh impossible.
Also what about the line on the FNB statement which reads: “non-FNB fee”? Is it deliberately designed to make the client believe the fee is attributable to the competitor bank? That’s certainly what it looks like. Naturally, FNB denies that and says it refers instead to a charge at a non-FNB machine as per its pricing schedule.
Finally, what’s happened to the Competition Commission investigation report requirement that all SA’s banks implement a warning on ATM transactions cautioning the price of the fee about to be levied? Something like: “You’re welcome to use this machine, just be aware you’re about to be charged a disproportionate amount of cash to draw your R100.”
That level of transparency is unlikely, but there should at least be a warning. FNB’s Fowle agrees and says the bank will carry those warnings by year-end. We have to hope the rest of the sector will do so simultaneously, otherwise the benefit to clients will be limited.