On bank fees and charges

Published October 17, 2020, 6:00 AM

by Atty. Vic Dimagiba

Banks collect fees and charges for certain services they perform for their clients. What is not understandable to me, an ordinary consumer, are fees and charges for bank services which were previously rendered free of charge.

I wrote the BSP Governor as early as July, 2019 calling his attention to practices such as collecting fees for services which were previously available without cost, creating certain classes of services such as links to other providers which, while free at launch, are eventually charged, increasing fees for a certain transaction where there is no visible new feature to justify the new fee. I told him that we the consumers are confused as to what we are paying for and are questioning whether these are actually fair.

I listed the following specific items as examples:

  1. Encashing a check in a bank branch which is not the maintaining branch will cost an additional P100.00
  2. Over-the-counter (OTC) deposits and withdrawals made by an account holder will be charged P100.00 in one bank and P 50.00 in another bank when the transactions are made in branches other than the maintaining branch
  3. Deposits made by a third party to an account which is outside the geographical area of that  account’s maintaining branch is charged P50.00
  4. Transactions made online / mobile app are charged fees
  5. A fee of P100.00  and a cap of P50,000.00 are  imposed on fund transfers from the bank’s online banking platform to participating banks
  6. Online fees and charges are collected for transactions made within the same bank
  7. Fees are collected on OTC transactions between an NCR branch and a regional branch of the same bank.

The BSP’s Center for Learning and Inclusion Advocacy replied, informing me that they have noted my concerns and that they will take them into consideration during the regular review of policies and regulations. They added that they will hold discussions with the banks on these concerns. Since then, nothing has happened, and I concluded that the Center’s reply to me was merely lip service to the Anti Red Tape Law.

Now that the BSP has announced that bank online transfer fees are waived (until year-end), the BSP has said it can only “ask”, but not impose on, or order, banks to waive the fees because the fees are part of the bank’s business, calling these fees as “convenience fees” which should be shouldered by the consumers.

The BSP also recently talked about its digital payments transformation roadmap – a good move.

However, I disagree with how this roadmap is now being used.  Banks are justifying the collection of fees and charges for the online transactions by reasoning that the collection of these fees and charges will provide them with funds to support their goal of transforming themselves closer to the ideal digital bank model.

I disagree. First, the consumer already contributes towards the digitalization goal when he pays for the Internet to access the online platforms of the banks and service providers.

Second, the BSP can in fact order the banks to waive fees for online transactions. It can find the legal authority in the 1983 Supreme Court ruling on the case filed by the Philippine Consumers Foundation Inc.  against  PLDT where the Court held  that “ the load on the back of our people is heavy enough and  let us not increase its weight further and  that PLDT, which made millions of pesos in spite of its poor service, should first think of improved service, before increased profits and while the plan to expand the company program and improve its service is laudable, the expenses should not be shouldered by the telephone subscribers. “

My third reason is that banks make billions of pesos in profits and online payments transactions  are in billions of pesos and earn  income , therefore , they have the resources to absorb the cost of expansion and improvements such as the online fees.

I hope the BSP will stand down on the continued imposition of these fees and charges and provide economic relief for the consumers.

Atty. Vic Dimagiba is President of Laban Konsyumer Inc.

Email: [email protected]