Bankwest to freeze merchant fees: ACCC

West Australian regional bank BankWest will reassess the impact of the New Tax System on fees charged to merchants, after an investigation by the Australian Competition and Consumer Commission.

"It has agreed to freeze all merchant fees at pre 1 July levels until this reassessment is complete," ACCC Chairman, Professor Allan Fels, said today.

"The ACCC was concerned that BankWest had sent letters to all its merchants stating that it would pass on a full 10 per cent increase due to the Goods and Services Tax without also passing on the benefits.

"This conduct was potentially misleading and in breach of the Trade Practices Act 1974 since BankWest has admitted that its initial analysis of the impact of the New Tax System on merchant fees had not addressed all necessary matters. It is now rapidly reassessing the situation to ensure compliance with the Act.

"After questioning by the ACCC, BankWest acknowledged that a adjustment was required to the merchant fees as a result of benefits that would accrue to the bank from the New Tax System.

"ACCC has formulated price exploitation guidelines whereby businesses must ensure that all benefits from the New Tax System are passed on to consumers including business consumers".

The ACCC is continuing its investigation and discussions with BankWest to ensure that merchant fees are adjusted properly to fully account for New Tax System benefits.