Keeping the client misinformed!

South African banks are justly famous for concealing the fees they charge their customers. This is often done by publishing long complex tables that no mortal can understand. Like I did, you might naively believe this can be clarified by contacting Standard Bank.

Recently (Dec 2006) I decided to find out what exactly it costs to use a Standard bank Mastercard when travelling overseas. I recorded full details of dates of calls and who I spoke to, but here is a brief summary.

Credit Card helpdesk: The first consultant I called at credit card division told me the info should be on the web. Having looked for it I asked them to find it for me. After putting me on hold for 5 minutes, they came back on the line to say they couldn't find it. They could only read it to me from a pamphlet, which read 'R23 per withdrawal plus 0.7%'. No, they couldn't fax this to me, and no, they couldn't email it to me (I have learned the hard way to get this type of info in writing). I should go into my branch and collect a pamphlet.

My branch: So in I went to my branch and collected a pamphlet which confirmed the R23 plus 0.7%. However, sneakily stuck away at the bottom of the pamphlet (31 lines lower down) was this line:"International currency conversion fee: 2%". I asked my bank about this and was told they did not have a forex desk, and I should take my query to Cavendish square.

Bureau de Change, Cavendish: So away I drove, and got to a very helpful consultant. She explained it wasn't really their business, and I should ask the card division! But she had been trained to tell customers it cost R23 plus 0.7%. I asked her about when the 2% applied. She spoke to her supervisor, who had also thought it was R23 plus 0.7%, and couldn't clarify the 2% story. They also couldn't tell me what exchange rate is applied to the conversion (eg. Bank TT sell rate), and whether or not any additional percentage is added to the exchange rate.

Card division helpdesk again: So she called card division for me, and asked for clarity re the 0.7% and the 2%. The credit card division consultant did not know, and could only repeat what the pamphlet said. When asked if she could send me something in writing clarifying the total cost of using a credit card overseas, she replied she could not, and it was not their policy to do so! She then checked with mastercard international, who apparently also told her that it was policy to NOT provide such written information.

Card division forex help desk: Next was a call directly to the forex division of Mastercard, where a rather condescending consultant explained it was simple. The only charge was R23 plus 0.7%. Oh, and yes, there was also a 1% fee for changing the amount into dollars, and then another 1% for converting dollars into rands. And also possibly some ATM usage fee, which was too complex to be able to explain as that amount would also attract a currency conversion fee. So I asked if the correct information was actually that the cost was R23 plus 2.7%. She replied no, the only percentage was 0.7%. Plus 2%. Definitely not 2.7%. And no, she could not easily provide me with this information in writing. She would try, could not say how long it would take. I also asked what exchange rate was used in calculating the conversion, and she could not help me with this either.

Back to the branch: So I spent another 90 minutes at my branch, and this time spoke to a consultant, who went to consult with her team leader. Neither could make sense of the fees as described in the array of pamphlets and tables available at the branch. An extra fact emerged: the 2% conversion fee does not appear on the 2007 pamphlet ("Personal transaction accounts 2007 Pricing Guide" - see right), but no-one could say if it still applied and was omitted from the pamphlet, or will be dropped in 2007. Incidentally, this 2% fee is also missing from the "Credit cards 2004 pricing guide". [Did you get charged this fee in 2004? Perhaps you can claim it back?] The consultant called the card division help desk (ha ha ha!) and after being put on hold for 5 minutes, was told the help desk couldn't help, and the query should be put to the Mastercard International Service Centre in Simons street.

This means withdrawing R100 in pounds from an ATM could (nothing is certain!) result in fees of:
R23 + R2(?) + 70c + unknown ATM fee (+ conversion fee for this fee) = R25.70 + unknown ATM fee + unknown exchange rate disadvantage = UNKNOWN

On R1000 rand, it would be
R23 + R20(?) + R7 + unknown ATM fee (+ conversion fee for this fee) = R50 + unknown ATM fee + unknown exchange rate disadvantage = UNKNOWN

On the credit card statements, the actual breakdown and percentages of the fees is cleverly hidden by being included in the 'exchange rate'.

This is the best information I have after spending several hours speaking to 10 members of Standard Bank staff!

Ombudsman: At this point I asked what I needed to do to contact the banking Ombudsman. 'Oh, then we need to log a complaint first!' was the reply. So I sat there for a further 30 minutes while a complaint was logged, after which I was given a reference number which I needed to quote to the Ombudsman before they would consider my complaint. This was the sixth attempt to obtain this information from Standard Bank staff.

Ombudsman gagging: In the Ombudsman complaint form, the following clause is hidden away in the 'Rules and Undertaking': "I acknowledge that I may not publish any of the details of my complaint in any form of media..." I have every intention to publish the complaint, which seems to preclude use of the Ombudsman. I emailed the Ombudsman asking if this was true, and still await a reply.

Provincial manager: The next day the branch consultant called me to say the number for Mastercard international given to her doesn't work! So she has escalated to her provincial manager. This manager called me to say the exchange rate used is the TT selling rate, and the fee for using the card at a merchant is 2% with no minimum. For withdrawing from an ATM, the fee is R6.70 plus 0.9%, without any 2%. This is a new figure no-one mentioned before. It contradicts the pricing pamphlets, as well as information given to me by card division help desk and the foreign exchange bureau. I mentioned this to the provincial manager, who said she does not have any of the pricing pamphlets at hand, and would need to go to a branch to get them and call me back. Yet another Stanard Bank employee as confused as I am!

She called back and apologised for providing the incorrect information: R6.70 plus 0.9% is completely incorrect. This was the (mis)information provided to her by the card division help desk. She can now confirm it is R23 + 0.7% with no additional fees for ATM withdrawal. This 0.7% should appear as a line item on my credit statement (it doesn't - see right for example in pounds). So perhaps the exchange rate used is not the TT sell rate after all, perhaps it is the TT rate plus 0.7%. It seems this fee is 'hidden' in the exchange rate used. She isn't sure, and doesn't want to commit herself one way or the other.

For merchant use, it is 2% of the value without any minimum. She also explained that the date on the statement will reflect the date the transaction was processed, not the actual date of the transaction. This contradicts my old statements (see left), which also show the same date as the slip. We has made so little progress, we didn't even get onto why the 2% conversion fee is not on the 2007 pamphlet.

Next came a bit of buck passing: this isn't a query for her, its a card division query. The branch should have handled this query, and not passed it on to her. So she called back a short time later to say she had contacted card division, and they would contact me shortly to clarify all the confusion.

Card division again: Next came a call from card division. Unfortunately it was from someone who only handles corporate credit cards. So they promised to get someone who deals with personal credit cards to call me. Which they did a short while later, saying they had been told I have a question about interest on my credit card. At this point my patience began to crack, and I asked for their email address so that I could email them a log of what I had asked and been told to date.

Bureau de Change, Cavendish: A fax was waiting for me from card division, stating that all international transactions are also debited a 2% conversion fee.
This means a R23 + 2.7% fee is charged for ATM withdrawals, and not R23 + 0.7% as the staff have been trained to say.

The manager of Cavendish called me later to confirm the above. In 2007, the 2% will still apply, although it does not appear on the 2007 Pricing Guide. She cannot explain to me why this is. Also, its not possible to tell me how Mastercard calculate the exchange rate used (prior to adding 2%), and she cannot think of any way of finding out this information. She also said the 0.7% will appear as a separate line item together with the R23. This contradicts what is shown on the statement above re ATM withdrawls, where the R23 is shown on its own. Perhaps the 0.7% and the 2% are added together....

Complaint: Four days after lodging the complaint I received the first communication from Standard bank directly re the complaint. It was a brief SMS which read "Re complaint 18224152. The complaint has been resolved and feedback provided". Perhaps this means it is resolved in the eyes of Standard Bank, but not in mine! For example, it seems the issue of leaving the extra 2% fee off the 2007 Pricing Guide is still very much unresolved.

Perhaps customers of Standard Bank who have been charged a fee which is not mentioned in the official Pricing Guide have recourse to claim a refund? Is there anyone out there who is qualified to give a legal opinion on this? If so, please email it to us.

Another emailed repsonse arrived to further queries, which said, amongst other things, "The 2%conversion fee is not absent from the 2007 pricing guide." Well I can't see it (see scan of pamphlet above). The full name of that pamphlet is "Personal transactions accounts 2007 Pricing guide". When I asked the bank if the "Personal Transaction accounts Pricing Guide" should cover use of a credit card overseas, they said that it would. It mentions the R20 plus 1%, so it does appear to cover international withdrawals, it just sneakily once again omits any mention of the 2% fee.

In terms of effectively communicating fee structures to their customers, this all adds up to either extreme incompetence or intentional deception.
Any response received from Standard Bank will be published here on request.

Back to the African Potato