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Credit card transactions processed as cash advance – not purchases – staff assisted fee charged
Ms P is a New Zealand citizen working overseas. She wanted to make a payment towards her student loan. As the only practical method available for her to make a payment was to use her credit card, she decided to pay by card, using the student loan website. On the website, she noticed that a bank fee, calculated on a percentage basis, would be charged if she paid by credit card.
Ms P made a payment of nearly $5,000, and was horrified to see a fee of more than $100 included in the transaction breakdown. She complained to the bank.
Ms P argued that the fee was unreasonable because, as it was based on a uniform percentage of any transaction, it could potentially amount to quite a large sum of money, especially for a recent graduate working overseas. Mr S said overseas graduates typically made loan repayments as lump sums, thus guaranteeing the bank a large “commission”. Ms P believed that, in these circumstances, it would be fairer for the bank to charge a flat fee.
The bank replied that its fee was adequately disclosed in several locations on the website, but offered a goodwill refund of 50% of the fee.
Ms P was not satisfied with the bank’s offer, and referred her complaint to my office. I was unable to investigate the complaint, as I do not have the power to scrutinize the level of standard fees charged by a bank. Ms P was given advice about alternative remedies.