Bank of Bermuda under fire for unlisted fee Opposition Leader Pamela Gordon has joined a list of customers fed up with local bank practices.

And she has called for the Island's banks to offer interest bearing chequing accounts, similar to what is available in the US, UK and Canada.

The Bank of N.T. Butterfield has come under fire for changing its chequing system with at least one client charging that the new policy "is a blatant case of discrimination against those of us who have to use all or much of our income during the month to pay our bills''.

And a Bank of Bermuda customer has issued a warning that the bank has instituted fees not listed in their fee schedule or posted in their branches.

The complaints come on the heels of the Bank of Butterfield diversifying its chequing accounts and offering four options.

Vice-president of retail banking Richard Doughty explained that the options arose after "careful analysis'' by the bank on customer practices.

The regular chequing account, which used to require customers to have an average minimum daily balance of $1,000 in order to avoid a service charge, has now been increased to a minimum balance of $2,000.

Clients who are willing to pay $1 to process every cheque will have no minimum balance requirement. Third and fourth options see higher minimum balances corresponding to more free cheques processed.

Gordon voices concern over bank practices "Obviously, those who made up the new policy can afford to have $2,000 in their chequing account earning no interest for them, but yielding $120 to 200 per annum for the bank,'' one angry client claimed.

"In many countries, banks now pay customers interest on their chequing accounts. So how is it that our banks charge us so much, expect us to have a spare $2,000 to keep in the account and then spend large sums of our money on sports events, private schools facilities and other charities?'' The concerns were echoed by Ms Gordon who revealed that she planned to send letters to the presidents of both banks on the matter.

"The point that I have made to the banks, both banks, is that they have a moral responsibility and duty to the people of this country to act in a fair and reasonable manner,'' Ms Gordon said.

"If they are going to be charging fees they must be seen to be fair and reasonable and I think it is about time they join the rest of the western world in offering interest bearing chequing accounts.

"People would feel far less aggrieved if they felt they were not burdened with charges, if they could see their interest offsetting the bank charges.

"Everyone recognises the banks have to charge some fees but people would be a lot more comfortable with it if there was some interest, no matter how nominal, to offset it.'' Ms Gordon also revealed that she had been collecting brochures from overseas banks and speaking with their managers on banking policies.

"I have supplied the local banks with several brochures from banks in the US, UK and Canada where they are offering interest on chequing accounts,'' she said.

"I talked with several of the managers and none of the bankers (overseas) said they enjoyed doing it. They told me that it was a move they had to make out of necessity because the customer is king and they can show their upset by simply moving their money.

"In Bermuda customers are not regarded in the same way. Because there are only two banks, they tend to stay together on policy.

"As long as the local banks stay together on policy Bermudians will not feel there is real choice.'' But Mr. Doughty was emphatic that the style of chequing accounts currently on offer at the Bank of Butterfield amounted to interest bearing.

"By eliminating bank charges,'' he said, "we have effectively made the accounts interest earning.'' Further defending the bank's decision not to offer interest on chequing accounts, Mr. Doughty pointed out that the bank did not want to have a complete overhaul and "wanted to keep the same style and structure''.

"There are so many different accounting designs and I'd actually say I've not seen one that's common throughout,'' he noted. "There may be as many designs as there are banks. For example, I've seen a Canadian model where they charge even for deposits.'' He noted that cheques presented a much larger cost to the bank than debit card transactions.

"It takes one person to clear debit card transactions for the day,'' he said, "for cheques the minimum number of people needed is seven.'' But Mr. Doughty was adamant that the bank was not trying to lure people away from using cheques.

"I think we are always going to have people who need cheques,'' he said. "We want people to use the most appropriate form of payment for their needs,'' said product manager Jennifer Sharp.

"I have spoken with several clients and issued so many new debit cards as I advised customers to pay their bills through the ATM machine.

"Many people just had not realised how easy it would be and that it would cut down their bank charges.'' According to Ms Sharp, 47 percent of their chequing account customers were already paying a maintenance fee as they fell below the $1,000 average minimum daily balance.

She also pointed out that about 50 percent of the chequing account customers maintained balances well above the $2,000 requirement.

However, Mr. Doughty said he was not surprised that complaints were coming in from the small percentage who wrote several cheques a month but could not afford to keep a balance of $2,000.

"The bank processes 10,000 cheques a day,'' he said, "and there is a charge related to the use of the cheque.

"We analysed the different types of activity in chequing accounts and really designed our product to better facilitate them.

"I feel that our chequewise system meets people's needs as they bank for the month and it is complemented by our good Strata savings account.'' Meanwhile, Paul Kellam, a client with the Bank of Bermuda, in a letter to the Editor pointed out a fee customers were not warned about and which was not listed in the bank's fee schedule.

"So beware,'' he warned, "if you withdraw more than $5,000 in one day, you will be charged a fee of $2.50.

"The amount is small, but the principle is important -- all fees should be disclosed in advance. A bank that truly gives 110 percent would not behave this way.'' After inquiries from The Royal Gazette , senior vice president of retail clients at the Bank of Bermuda, Danny Fox, issued a written apology for the move.

"It was an oversight that this fee was left off our fee schedule, for which we sincerely apologise,'' Mr. Fox said. "However, we have been informing customers about the fee if they come into the branch for this service.

"We will ensure that this fee for large cash withdrawals is included in our next fee schedule.'' Explaining the reason for the charge, Mr. Fox said: "The Bank of Bermuda does charge a nominal fee of one half of one percent to customers who withdraw more than US$5,000 cash per day. This is to deter customers from withdrawing such large sums of foreign cash as part of our anti-money laundering practices.

"In fact, we find that very few customers need such large sums of money in cash.'' Pamela Gordon: Banks have a moral responsibility