By Babajide Komolafe

Some years ago, a couple opened a savings account for their children, twins, with one of the big banks, where they deposited all the monetary gifts received during the naming of the boy and girl.

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They expected that as the children were growing, the money would also grow, via interest payment by the bank. But to their astonishment, the money in the savings account, instead of growing was reducing, and they had not withdrawn a kobo. What made this painful for the husband was that his wife was a staff of the bank. Upon enquiries, he discovered the savings account was subjected to nothing less than three types of charges, which cumulatively were more than the meagre interest the bank pays on the savings.

The experience of this couple is an example of what the staff of an old generation bank, called, Banking without Mercy. It describes the tendency for banks to exploit customers through sundry charges and fees, so as to enhance their revenue and profitability.  It used to be prevalent among new generation banks, but it is now an industry practice.

Although, the Central Bank of Nigeria (CBN), in an attempt to check these excesses publishes the Guide to Bank Charges, wherein it articulates what type and limits of bank charges, there are still incidences of this exploitation.

An example of banking without mercy is charges for SMS alerts. Ordinarily, this should be limited to non-bank transactions on customers account. But because of the greed of banks, the customer is charged even for transactions conducted by the bank itself. Hence, the customer is charged for SMS notification for CoT deductions, VAT on CoT deductions, and even SMS Alerts deductions.

Furthermore, when you do a transfer from your account, the bank will send SMS notification for the transfer, SMS notification for the transfer fee, and another SMS notification of the VAT on SMS notification. Thus, the bank generates three separate SMS notification on one transactions and SMS charge of N12 naira. Multiply this figure by the millions of bank transfers conducted everyday across the industry, and you would be surprised at how staggering the figure might be.

When confronted with this development, a senior management staff of one of the top three banks agreed that banks ought not to charge for SMS notification for transactions they conduct on the customers’ account.  Yet they all do it, simply because it enhances their income.

It, however, goes beyond this, sometimes, the customer is overcharged or charged twice for SMS notification, and because the amount is usually small, a lot of customers don’t take time to relate the amount charged for SMS notification for the month, to the number of SMS notification received. A corporate customer of a top three bank made this discovery and confronted the bank. The reply from the bank was that the SMS notification charges occurred twice due to system error, and the charges were reversed. If the system would not make the error of omitting charges, while should it make mistake of double charging the customer. It is Banking Without Mercy and many customers have been victims due to ignorance. To be continued next week.  (Send comments and enquiries to [email protected])