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Following is a question by the Hon Albert Chan and a written reply by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in the Legislative Council today (May 2):
Question:
Recently, I have received quite a number of complaints from members of the public pointing out that some banks have, without prior notice, deducted money ranging from tens of dollars to $300 from their savings accounts as service fees for accounts with a balance lower than $5,000, and they also consider the fees to be too high. In this connection, will the Government inform this Council:
(a) of the number of complaints received in each of the past two years about fees charged on low-balance accounts, together with a breakdown by the banks involved;
(b) of the number of aforesaid complaints in which the banks had levied a fee without prior notice to customers, and the number of such cases settled in favour of customers; and
(c) whether it will introduce measures to ensure that such fees are set at a reasonable level, and customers are notified before the fees are levied; if it will, of the details the measures; if not, the reasons for that?
Reply:
Madam President,
The setting of fees and charges for banking services is a commercial decision for banks. Under the free market principle, the Administration does not consider it appropriate to interfere with such commercial decisions. Having said that, the Hong Kong Monetary Authority (HKMA) will continue to ensure that banks maintain a high degree of transparency with respect to their fees and charges for banking services. Specifically, banks are required under the Code of Banking Practice to make readily available to customers details of their fees and charges, and notify affected customers in advance before any change of such fees and charges takes effect. These requirements aim to provide consumers with adequate information so that they can make informed choices when selecting banking services. It is also worth noting that there are banks which do not levy charges on low-balance accounts and many banks offer waivers of such charges for underprivileged groups such as social welfare benefit recipients. Our detailed responses are as follows:
(a)&(b) From time to time, the HKMA receives complaints concerning the fees and charges of banks. Since the setting of fees and charges is a commercial decision, the HKMA will normally ask the complainants to reflect their opinions to the banks concerned directly. Given the existing arrangement, the HKMA does not keep track of the number of complaints about fees and charges for banking services, and thus is unable to provide the requested statistics.
However, the HKMA will follow up a complaint if it is alleged that a bank fails to comply with the Code of Banking Practice in giving an advance notice to affected customers before changing its fees and charges. Over the past two years (January 2005 to date), there were three complaints of this nature. None of them was found by the HKMA to be substantiated.
(c) Under the free market principle, it is inappropriate for the Government to regulate the setting of bank charges and interfere with the commercial decisions of banks. We believe that competition will ensure that banks set their fees and charges at a reasonable level, having regard to their operating costs and the demand of their customers.
That said, the HKMA will continue to ensure that banks comply with the transparency and notification requirements in relation to bank charges in the industry's Code of Banking Practice. In particular, institutions should make readily available to customers details of their fees and charges. They should also give at least 30 days' notice to affected customers before any change in their fees and charges takes effect. These requirements ensure that customers are provided with adequate information which enables them to make informed decisions in selecting banking services.
Ends/Wednesday, May 2, 2007
Issued at HKT 14:40
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