Money & Banking

Mon, 4 Dec, 2017Danielle McCarthy

How banks rip loyal customers off

How banks rip loyal customers off

Banks seem to get a lot of bad press these days, and there’s a reason for this. For every good news story you read about the big four banks, there seems to be half a dozen cautionary tales about these same banks taking advantage of loyal customers.

If staying true to your bank was hard enough already, recent research seems to indicate consumers who do so are penalised for their loyalty, rather than rewarded.

Research from comparison site Mozo suggests sticking to traditional banks, rather than shopping around for a better deal, can leave an $80,000 hole in your pocket.

Founder of The Money Mentor Way, Nicole Pedersen-McKinnon, crunched the number based on interest rates on credit cards, home and personal loans, and found that on average the lifetime price of sticking to the same bank rather than shopping around for a better deal was $82,174. That could be a luxury car, or incredible holiday.

This comes as consumer advocate CHOICE criticised the Commonwealth Bank of Australia (CBA) earlier this year for offering primary schools substantial incentives to sign student’s up to the Dollarmites saving program.

CHOICE’s chief executive, Alan Kirkland, said, “Rewarding children for saving with cheap toys easily transitions to rewarding young adults with ‘special’ offers of high-interest personal loans and credit cards. It is time to take banks out of financial literacy education, and to stop them from paying schools commissions to flog their products.”

CBA responded in a statement, saying, “We have heard CHOICE’s concerns about these payments and will engage with the schools, parent and citizens’ associations and consumer groups to introduce a change to the way payments are structured from 1 January 2018 that no longer links the payment to the value of students’ deposits.”

What are your thoughts? Have you stuck with the same bank for your whole life? Or did you shop around and find a better deal? Let us know in the comments.