Pack of Bankers

A few years ago there was an ad on the telly. The scene: it's summer, there are kids in the pool, a barbie is going nicely. A woman says to a man she's just met, "So, what do you do?".

"I'm a banker."

Everything freezes - all other conversation, the kids in the pool, even the dog turns to look.

Pause.

"I'm with St George."

"Oh!" the woman says - almost sighs really - and everything is back to normal.
Cue voiceover and pictures of the banker engaging in conversation just like a normal good bloke.

It was a great ad (sadly I can't find a link to it) which cast the St George Bank as different, more human, nicer than all the other banks. This approach is still very much part of the bank's brand today. But the real reason this was such a great ad was that banks were really on the nose.

Nobody, apart from a couple of radio broadcasters, had anything good to say about them. They were seen as ruthless profiteers, growing fat on the banking fees and charges paid by almost everyone.

Nine years on, I wonder how much public affection there is for banks at the moment.

Interest rates are up. Technically, this is not the banks' fault. The cost of their money has been increasing, partly because the Reserve Bank wants to get to grips with inflation and partly because since the collapse of the US sub prime market all risk is more expensive.

The banks' first responsibility is to their shareholders. Indeed, the market would punish them if it was not, so the banks have to pass on the costs of borrowing money to their customers. But most people don't care about all that, what they care about is that interest rates are going up - at a time when petrol, fruit and veg and rents are shooting up too.

That's the context. On top of that have come one or two stories that don't help the banks at all when it comes to winning hearts and minds. And now, another one, from the other side of the world about our old friend: fees and charges.

Essentially British banks have been coining it in, especially through fees for unauthorised overdrafts (where more has come out of your account than you have in it). The Office of Fair Trading estimates these fees alone are worth £3.5 billion every year. It's taking the banks to court. Now the High Court has ruled that this comes under unfair contract rules supposed to protect the public. It is going to be years before this legal process is finished but it could end up with the British banks having to pay back rather a lot of money: £9 billion (+ the half billion they've already handed over). You can hear the Brits cheering from here.

The thing is though, Australian banks are doing pretty well out of fees and charges. Choice estimates that in 2006, they raked in $4 billion from credit card and account holders who paid late, inadvertantly went over their limit, or had a cheque (that somebody else had written) bounce.

Choice, along with the Consumer Action Law Centre, is having a red hot go at the banks on this. There's a Senate Inquiry due to report in September. And Steve Fielding, the Family First Senator for Victoria, has a private member's bill that would stop banks charging more than their costs for dishonoured periodic payments, direct debits or cheques. With one thing and another, it doesn't look like being an annus mirabilis for Australian banks.

All in all then, you wouldn't be completely astonished if somewhere, somehow, the bankers were having a few words in some influential ears.