The vast majority of South Africans do not know if their bank overcharges them.

Research amongst visitors to www.justmoney.co.za suggests customers feel bank charges are too complicated for them to bother checking it.

Asked if they would know whether their bank had made a mistake with their charges, the www.justmoney.co.za poll found:

  • 39 percent said no — “My bank charges are far too complicated.”

  • 43 percent said maybe — “But I do not always check my charges.”

  • 18 percent said yes — “I always check if my charges are correct.”

Customers seem confused by the range and complexity of different bank tariffs and often it is unclear from a bank statement what the charges relate to. As a result many people do not check their monthly statements or simply do not understand them.

Paul Beadle, managing director of justmoney.co.za, says, “It’s frightening that almost two out of five bank customers would not be able to pick up if there had been a mistake made on their bank charges, so they won’t know if they are out of pocket.

“The mistake might not even be the bank’s fault. Sometimes companies take a debit order twice in the same month, incurring double charges. Although the mistake is usually picked up and the debit order re-paid by the company, the bank charge will still stand unless the customer spots the overcharge and requests a refund.”

Beadle says that the complexity of South African bank charges and the fact that the majority of consumers do not understand them means that many people could also be spending too much on their banking.

“There is a bewildering variety of pricing options, with some banks offering four or five different pricing structures for the same account, ranging from ‘pay-as-you-transact’, to ‘managed fee’ and ‘rebate banking’. The banks say that this provides people with more choice, but in reality it is too confusing for consumers and often even bank branch staff cannot advise on which pricing option is the best.

“The best choice of pricing option will depend on the number and type of transactions you perform, which will dictate the amount and cost of the charges you incur. But because consumers do not understand the way their bank charges are calculated and applied, they have no idea whether they are on the most cost-effective pricing option or not.”

By using a bank charges calculator, you can determine if you are paying too much for your banking and could save on average between R75 and R100 a month by moving to a more cost-effective bank account.

“R75 a month may not sound like much of a saving,” continues Beadle. “But with current economic conditions saving R900 a year on bank charges plus additional savings by shopping around for cheaper credit cards, mortgages as well as home and vehicle insurance could save a household thousands of Rands each year.”

Beadle recommends the following:

  • Check your statement each month. Compare your charges with your ATM receipts, petrol slips and other bills to ensure they are correct.

  • If you don’t understand a charge, ask! Check with your branch if a charge doesn’t make sense. Get them to explain and query it if you think it’s wrong.

  • Shop around for a cheaper deal. Compare accounts to see if you can get a more cost-effective bank account or a pricing tariff that better your needs.