Tan Kin Lian's Blog: Excessive charges by the banks

Wednesday, July 14, 2010

Excessive charges by the banks

It appears that MAS is taking a serious view about the computer glitch at DBS Bank. I consider that the attention is misplaced. Sure, someone made a serious mistake, but it was not intended. Let them learn their lesson.

I prefer MAS to put its attention on other matters that are important to consumers, such as the excessive charges for banking services for writing a cheque wrongly or for having a bounced cheque. The charges of $25 or $50 for these unintended mistakes are grossly excessive. MAS should investigate the real cost to the bank and ensure that the bank does not make a profit from these charges.

Unlike the computer glitch which was unintentional (i.e. caused by a routine repair job), the excessive charges by the banks are delibrate and unconscionable.

If the bank is allowed to make a handsome profit on these charges, you cnn be sure that they will be creative in making life difficult for their customers, so that they can be caught with these penalties.

Tan Kin Lian

13 comments:

Anonymous said...: Sometimes one just wanders what are MAS roles. When there are bigger issues that are deemed not fairplay involving FIs and other financial investment agencies causing financial losses to investors, MAS is seen to be slow or reluctant to react. Cases in point are the Minibonds, High Notes, Pinnacles and recently Landbanking. This computer glitch in comparison is not as damaging but it seem so because DBS have been having a run of bad publicity. So one wonders why such prompt response by MAS in comparison to the other issues.; July 14, 2010 1:11 PM
Anonymous said...: "Singapore has a culture of "no tolerance for failure"".

Unfortunately, this culture is only applied to the ordinary masses, or to companies which are seen as easy targets. By openly making public apology and showing contrition, the DBS CEO has made himself appear to be weak, and the PAPpy govt has gone all-in with guns blazing. This saying sorry probably works in other countries, but is a BIG NO NO in Singapore. Case-in-point: Refer to the recent SMRT CEO's response to the break-in and vandalism of Changi Depot.

Unfortunately for the CEO, he has not been in-country long enough to learn the true culture of the PAPies and elites --- "100% tolerance for failure, just don't admit anything and act proud".

Compared to this 5-hour computer glitch, the PAPpies have made HUGE MISTAKES in their policies and attitudes which have caused TREMENDOUS HARDSHIPS to ordinary people. We are still waiting for answers or even explanations for the following:-
1) Caught off guard by huge rise in HDB prices totally incommensurate with stagnant wages. And still telling us that it is "affordable", and scolding us for being choosy.

2) Stagnating and decreasing wages for 60% of Singaporeans over the last 12 years.

3) Inability of over 50% of elderly Singaporeans to retire on their own, and needing to collect cardboard, pick aluminium cans, wash public toilets, sweep drains, wash dishes and carry garbage at food courts.

4) Security breaches i.e. loss of limping terrorist Mas Selamat, and the brak-in of Changi Depot.

5) "Once in 50 years" flood that keeps happening in 2006, 2009 and 2010.

6) Non-accountability in the huge influx of PRs and foreigners -- what impact on loss of jobs to citizens and on the stagnant and decreasing wages.

7) Highest paid politicians in the world, 5X the salary of Obama, but still giving us the above standards.

8) Ignoring the plight of the underclass and homeless, and insulting them in parliament and on TV.

9) Blatantly increasing the budget of YOG by almost 4X. This money is tax payers' money. Why were the people not consulted beforehand? Where is the President, who is paid 6X Obama to supposedly safeguard our reserves and public finances and against wanton wastage by govt?

10) Total abdication of govt responsibility to protect & safeguard ordinary people against unfair and/or scam financial products in the face of overwhelming evidence e.g. credit-linked-notes, land banking, oilpods, participating insurance policies, dual currency products etc. While governments in other countries around the world are punishing and whacking the perpetrators. PAP Govt can tell us it is "caveat emptor" in other words You Die Your Business.

And etc etc etc...; July 14, 2010 1:11 PM
Anonymous said...: You are right indeed. They charged excessive fee in my opinion for most of the services involving oversea party too.

Not to mention many of the hidden charges that they failed to show in advance or their web site.; July 14, 2010 1:54 PM
Anonymous said...: If these bank charges are excessive, I think it is because they need to pay top salaries to the top bank managers and also other high expenses.

So if we can persuade MAS to tell the banks to rein in these high salaries and expenses(the root cause), then maybe the banks may also consider reducing the excessive charges to its customers.

羊毛出在羊身上

Meaning goat hair grow from the body of the goat.; July 14, 2010 2:21 PM
Anonymous said...: MAS will only "seriously investigate" matters that are essentially inconsequential after the fact or where the consequences have already passed. Maximum wayang organisation just like the SAF.

recruit ong; July 14, 2010 3:08 PM
Anonymous said...: Mr.Tan,

I beg to be diff as this is no small matter imagine that if Singapore will to have a bank OR max,two in future.What happen is if the so called computer hitch wipped out all the data and what will happen to all our saving?
MAS must step in now and ask for safe guard of ALL our acounts with DBS bank or else it will be too late and the same goes to all the big insurance companies etc..

Jurong Resident; July 14, 2010 3:54 PM
Tan Kin Lian said...: Reply to 3:54 pm

I wish to have the proper priority to be given to important issues. The 7 hor glitch, although important, inconvenienced a few thousand customers. And hopefully, the lesson is learnt and it will not be repeated for the next few years.

The overcharging of customers happen to many times more customers each month, and it happens every month. Repeatedly.

I am only asking for MAS to give attention to the overcharging, which I consider to be a more serious issue. It is unconsciounable to make profit from the misery of the customers.

If MAS does not give attention to such matters, the banks will continue to milk their customers.; July 14, 2010 4:31 PM
Anonymous said...: You think they will do something about it? Hell, no, they will just close both eyes and brush that aside if you complain . MAS is not going to bring DBS to task. Was very much done about the Mini-bonds despite the complaints?

With all the hue and cry about the recent transport fare adjustments, cost of living and HDB price escalations, did the Government do anything? All the explanations that they gave are really an insult to the intelligence of Singaporeans, whom they now regard as ignorant fools.

They are not just bullying us now, they are practically trampling on us, knowing there is nothing we can do about it.; July 14, 2010 4:59 PM
Anonymous said...: A client of mine recently presented a CASH cheque at the bank counter which i issued out the day before. I was charged $40 for "bounced cheque" eventhough the cheque was never received through the ACH and no IRD was sent back (no admin charges). I immediately went online to transfer funds from another account in the same bank, and the same cheque was re-presented and cleared immediately.

It was a genuine mistake as i had issued multiple cheques recently and overlooked to ensure there was sufficient funds for all cheques issued to clear. I really feel the $40 fee is way too hefty. Something should be done about it.; July 14, 2010 10:56 PM
Anonymous said...: It is reported in the news that its an accident caused by a routine repair job, but honestly, we don't know if that is really the case.; July 14, 2010 11:25 PM
TG said...: I doubt MAS is really serious in investigating nor in punishing DBS in the computer glitch matter. Having seen how it handled minibond debacle previously, MAS only "wayang" to appease the numerous angry Dbs customers who were affected during then.

The glitch may have been unintentional but I disagree that MAS need not look into the matter aggressively to ensure that there is not such repeat by Dbs. Customers deserve nothing less than a basic level of service at ALL TIMES .

...Part 1 of 5; July 15, 2010 10:59 AM
TG said...: Of course the gross charges levied on dishonoured cheques, etc, by banks are also exhorbitantly high and many are unaware as they think only a flat $40/ $50 is charged. In actual fact, there is also a overdraft interest which is accrued over 1 to 3 days and charged at approx 4 to 5 percentage point above PRIME-- for the shortfall sum of money -- in the case of a Dbs or POSB dishonoured cheques.

Try asking a TRULY KNOWLEDGABLE Dbs or Posb bank staff for the total bank charges for the following senario:

...Part 2 of 5; July 15, 2010 11:01 AM
TG said...: Try asking a TRULY KNOWLEDGABLE Dbs or Posb bank staff for the total bank charges for the following senario:

Say you only have $100 in your Dbs/ POSB account at the time when someone who bears your cheque which was issued (by you earlier) for a sum of $200,000 before you remember to do a timely fund transfer.

So when the bearer presents to your bank for payment on a Friday BEFORE 3.30pm, the cheque naturally will be dishonoured as there is a shortfall of $199,900 and will be rejected on the following Monday.

Dbs and Posb bank will never call you for any instruction nor extend any Overdraft to you to enable honouring of your cheque , BUT they will charge 2 separate fees for that single bounced cheque—

...Part 3 of 5

1st $40 for the one dishonoured cheque,
2nd Minimum $20 for Overdraft interest charge ( Prime Rate PLUS 5% p.a= 4.25 + 5% = 9.25% p.a)with No Upper LIMIT for the number of days the bank holds your cheque before it rejects ,

...Part 4 of 5

GUESS what is the Overdraft interest charge in this case???
The OD interest charge for 1 day is $50.65= {[(9.25/100)x199900]/365}
But you will be charged for 3 days as the bank would be holding the cheque from Fri to Mon. Therefore under the 2nd charge, which is OD interest charge, you will have to pay ANS: $ 151.95 ($50.65 x 3)
Total cost for the 1 dishonoured cheque is $194.95

I have checked that UOB would charge $187.90 ($40+ $147.90) which is lesser than Dbs/POSB but it is still exorbitant.

Hmm… I doubt many current account holders are aware of this exorbitant charge though such has been the practice for more than a decade esp. for DBS/POSB as even many bank staff are unaware as I have tested them via 1800-1111111 (Dbs Hotline) and 1800-2222121 (Uob Hotline) recently.
I was victimized once in the late 1990s. So I support Mr Tan KL’s drive to get MAS to get banks to lower their charges.
Dear Mr Tan KL, are you aware of the charge too???

...Part 5 of 5 (END); July 15, 2010 11:08 AM