NCF to Treasury: ‘put money where mouth is’

Editor June 7, 2010

Minister of Finance Pravin Gordhan is making the right noises about consumer activism over bank charges but needs to follow words with actions, according to the National Consumer Forum. Minister Gordhan met with banks this week on the implementation of recommendations from the Competition Commission’s Banking Enquiry of 2008, which highlighted the need for more competition in this sector and a lowering of bank charges.

Photo credit: notsogoodphotography

“We welcome the minister’s initiative in getting banks to implement these recommendations, and in particular his encouragement of greater consumer involvement in this issue,” said NCF chairman Thami Bolani.

“However, we would like to see Treasury putting its money where its mouth is, and giving more practical support to consumer groups who are already concerned about bank charges and related matters.”

He said the NCF had written to Treasury last year to open a discussion about directing a percentage of Competition Tribunal fines to civil society projects that promote consumer protection and activism; the response received did not address this request.

These fines are levied on companies who contravene the Competition Act (usually by fixing prices) and effectively steal from consumers; the fines revert to the fiscus for general state expenditure.

“We believe that consumer action should be supported directly with a portion of these fines, so that consumers themselves can help stamp out illegal and unethical practices in the marketplace,” said Bolani. He said that a civil class action against price-fixers was one legal remedy that had proven effective in many countries, but which is difficult in South Africa because the consumer movement is so under-resourced.

“We need to revive our culture of civil society in this country, a culture that was so strong when we had a common enemy in apartheid,” said Bolani.

Now, however, there seemed to be an uneasiness in government circles about NGOs and civic empowerment, he said. “In my experience, I have even seen government agencies try to intimidate patriotic individuals who are involved in consumer rights issues,” he said. “This is the opposite of what official policy says, and government needs to take seriously the growing imperative to help citizens help themselves.”

The NCF is planning to closely monitor the implementation of the Competition Commission’s recommendations, especially with regard to the charges that each banking group applies to its various accounts. This will initially focus on banking products for lower-income consumers, and residents of the rural town of KwaMhlanga, where the NCF has its Access to Knowledge Centre, will be invited to participate.

The NCF is an affiliate member of the global federation of consumer organisations – the London-based Consumers International – a grouping of over 250 consumer organizations in more than 120 countries. We support the United Nations Guidelines for Consumer Protection, in particular the right to basic needs: All consumers have the right to basic goods and services such as adequate food, drinking water, shelter, clothing, health care, electricity and education. These rights lay a foundation for a life of human dignity and therefore give meaning to citizens’ rights to vote for the political party of their choice periodically.

National Consumer Forum
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  • Nixmail2000

    The new struggle is no longer that of apartheid but rather the common ground that binds all consumers together…”The battle of explotation of the Consumer”. As far as banking fees are concerned it's totaly out of control and definetely does not improve the climate for investment and savings. In order for the economy to grow and prosper.. the department of finance shoud realy start to put his money where his mouth is… you cannot save what the banks already gained in banking fees. Banking fees should be kept simplified across the board regarless which bank is concerned or service is provided. Its almost impossible to determine what a simple transaction will cost because of the vastity thereof and all depending the amount of the transaction. Even the teller at the bank sometimes hardly has an idee exactly what a certain transaction will cost and i have experienced that. Depending on the amount or type of transaction as well as fees already deposited into the account, that all determines the banking fee which off course is never clear to the consume. “SIMPLICITY” … is what is urgently needed.