Hackers blow whistle on banks
Share this article:
Hackers have blown the whistle on banking fees - in a report banks hoped to keep buried.
The Competition Commission, the authors of the 590-page report, had originally blacked out certain sections, which banks claimed were confidential.
The commission has now opened a criminal case against Wikileaks, a website dedicated to exposing "unethical behaviour in governments or institutions".
The Technical Report of the Banking Enquiry, concluded in June last year, was the result of a 22-month inquiry into South African banking, particularly the big four: Absa, Standard Bank, Nedbank and FNB.
An intergovernmental task team is expected to be formed soon to look at recommendations by the Competition Commission to reform South African banks.
"This report is important as it might explain why banking fees are so extremely high," explained Wikileaks on its website.
Competition Commission spokesperson Jennifer Cohen said the decision to black out certain information in the report was at the behest of the banking institutions.
A letter by commissioner Shan Ramburuth to Wikileaks says that prior to the release of the report on December 12 2008, the banks had filed claims of confidentiality.
Their reasons for wanting certain information blacked out was that it was "trade, business or industrial information that belonged to them, had a particular economic value and was not generally available to or known by others. The Competition Commission accepted these claims and undertook not to disclose the information which had been so claimed," wrote Ramburuth.
The commission particularly takes banks to task for not catering for low-income earners.
Among the recommendations is a cap on penalty fees.
"Where detailed data has been provided, indications are that as much or even more revenue is earned by banks from rejected debit orders on these accounts than from the processing of successful debit orders," it found.
The commission felt that low-income earners suffered twice when hit with these penalties as most would not intentionally default on a payment but could arguably have many valid reasons for having insufficient funds to service debit orders.
These would include getting paid late. Low-income earners also did not have the comfort of "padding" their accounts to brace themselves for such an eventuality.
"It seems to us quite unacceptable that a bank should recover more than the cost incurred in processing the rejections."
Although banks indicated they would, on application, reverse penalties in a deserving case, the commission found it was unlikely that the vast majority of customers would have the confidence or the time to challenge the debit, opting to "suffer in silence" instead.
On December 16 2008, hackers managed to reveal the blacked-out information of the report, revealing them on Wikileaks.
"We'll be engaging with the commissioner on the matter through the formal channels established through the process," said Standard Bank spokesperson Ross Linstrom.