Australia: Mortgage exit-fees banned in banking reform win by CHOICE
22 Jun 2011
Australian consumer watchdog, CHOICE, has welcomed the
Australian Federal Parliament's decision to uphold the ban on
mortgage exit fees, which will now come into effect from 1 July,
The ban was put to a vote in the Senate today, which threatened
to see the key consumer banking reform overturned before it even
came into place.
"CHOICE welcomes the Senate's decision to uphold the ban on exit
fees and secure this important step towards a more competitive and
consumer-friendly banking sector," says CHOICE Head of Campaigns,
"In particular we applaud the leadership shown by the Greens and
the judgment of Senator Fielding in joining with the Government to
put consumers first.
"Removing exit fees will put power back in the hands of the most
important people in the Australian banking sector, customers. This
reform will help customers switch to a better banking deal and
pressure lenders to compete on up-front price and customer service,
instead of relying on complex and costly fees."
CHOICE believes that arguments for maintaining the exit fee ban
to benefit smaller lenders were misguided, as they assume that
competition can be increased at the expense of people with home
"CHOICE agrees that competition from smaller lenders is crucial,
but the way to achieve that is not by trapping home loan customers
in uncompetitive deals.
"Abolishing exit fees must be assessed as part of a bigger
package that that includes measures to support competition from
smaller lenders - and most of all a package that puts customers
first," says Mr Levey.
More financial campaigns
The consumer watchdog will continue campaigning to secure
further banking reforms in the coming months, including simple,
one-step switching on transaction accounts and fairer ATM fees.
Read CHOICE's action plan for a more competitive and
consumer-friendly banking sector here: http://www.choice.com.au/bankingreport
Fair financial services
Fair Financial Services is the Consumers International (CI)
global campaign to increase consumers' access to stable, fair and
competitive financial markets. CI, working with its members around
the world, is calling for new international standards and
guidelines that will result in real improvements for consumers of
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