4 June 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.
“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.