The treasurer of Australia is expressing outrage over a plan by Westpac Banking Corp. to charge interest on the interest charges and penalty fees it levies on its credit card holders, calling the issuer in a news release a “serial offender.”
“This kind of behavior by Westpac is exactly why people don’t like the big banks,” Wayne Swan said in the release.
A Westpac official confirms the policy move but declined to provide further details.
According to local media, the bank has written to its credit card holders that starting in June, “interest will also apply to interest charges and fees on their credit card account.” The report quotes a Westpac spokesperson as saying the bank made the move to bring it in line with industry standards and that the new charges would cost its average customer only an extra 67 cents per month.
The issuer will charge customers who revolve credit card balances interest on the interest accrued every month and on fees that apply to the monthly balance on the card, according to the spokesperson
Christopher Zinn, spokesperson for consumer rights advocacy group Choice, tells PaymentsSource the move would allow the bank to generate huge sums of revenue. “The practice falls into the sneaky part of the equation,” he says. “They try to claim it’s only 67 cents a month, but if you aggregate that up on all the interest from its customers per year, it’s a lot.”
