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People Asked To Check Their Bank Accounts

People Asked To Check Their Bank Accounts
Premila Kumar
April 18
10:17 2016

 

People have been warned to check their bank statements to see they have not been wrongly charged fees or when making deductions for external sources such as taxation.

This followed a major bank having to reverse the fees of a customer after the intervention of the Consumer Council of Fiji (CCF).

CCF chief executive Premila Kumar said a customer lodged a complaint against the bank after he was incorrectly charged Resident Interest Withholding Tax on interest earned for the year ending April, 2016 on a Term Deposit Account.

According to CCF, the Resident Interest Withholding Tax is a final tax which meant that the gross amount of any interest income paid to a Fiji resident by a financial institution in Fiji.

It must be taxed at a fixed rate imposed by The Fiji Revenue and Customs Authority (FRCA).

The bank had erred in charging 31% Resident Interest Withholding Tax effective from 1 January 2016, when in fact Resident Interest Withholding Tax should have been 10% for 2016 and 20% for the period 2012 to 2015.

Mrs Kumar said they could be many more consumers who had been affected because of this blunder by the bank.

“It appears the bank had failed to adjust their system in order to comply with the change in tax rates announced during National Budget to be implemented by FRCA,” Mrs Kumar said.

“How can this particular bank be so careless?”

“In the case at hand, the complainant was wrongly charged $280.59 instead of $90.51 on the $905.12 interest earned to his account.”

However, after Council’s intervention, the bank reversed the incorrect tax by crediting $190.07 to the complainants account and had also apologised for the blunder.

The Council said the complainant told them it was not the first time the bank had applied incorrect tax rate to his account.

In 2015, his bank had made the same mistake where it deducted 31% tax rate on interest earned when the rate should have been 20%.

The matter was raised with the bank then and also with FRCA and adjustments were made to his account after a lot of running around.

The Council was informed by the bank that they have started reimbursing the affected customers.

The Consumer Council of Fiji has advised consumers to check their bank statements thoroughly to be sure that they have not been wrongly charged by their banks in fees or charges or when making deductions for external sources such as taxation.

Feedback:  charles.chambers@fijisun.com.fj

 

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