The South African public knows how to complain about skyrocketing prices, gripe about disproportionate fixed costs, and moan about fees and charges all the way to the bank.

By Nicole Cameron

We know we're getting ripped off, but how and why? And is there anything we can do about it?

Neil Rankin of the Wits School of Economics calls it "the South African story" - relatively few competitors, relatively large market shares, and relatively large mark-ups in various sectors. The legacy of an economy built on mining, and closed to the world market till 1996, has left us with a landscape inhabited by lumbering giants - corporates, parastatals and conglomerates - all resting secure in the knowledge that their consumer meal tickets lack the capacity and confidence to speak out against being ripped off. And right they are, to a certain extent. The South African public knows how to complain about skyrocketing prices, gripe about disproportionate fixed costs, and moan about fees and charges all the way to the bank. But beyond that, we're apathetic and unaware. We know we're being screwed, but we don't have a clue why or how.

Here are just some of the areas where we can increase our knowledge, with the hope that it will empower...

Banking Fees

'I did comparisons with countries of similar economic standing, like Brazil and Malaysia, as the banks had said it was unfair to compare us to developed markets like the UK or Australia,' he says. 'And the results were shocking. Just to use one example, the Malaysian, Thai, and Brazilian banks charge nothing for depositing R100,000 in one month, whereas the SA banks charged close to R1,000 at the time of research.'

And then there's the complexity of the fee structure, which Terblanche is convinced is 'part of the ruse to keep prying eyes away'. Terblanche says that when these figures were put to the banks, they came back with the rather pitiful reply that currency rates could warp real costs to customers, despite the fact that the price differences were so large that purchasing power would not change the overall picture. The banking fraternity's final argument was apparently: if SA banks are indeed making so much money, why isn't there more interest from international banks in the SA market?

That was of course right before Barclays announced a purchase in a piece of Absa, and the Chinese bought a large share in Absa. The Banking Enquiry of 2008, conducted by the Competitions Commission, did yield some reforms, admittedly. 'But it is perhaps the arrival of Capitec, who've shown you can charge a third of the fee and still be profitable, that has really shaken the big four,' says Terblanche. Consumers who have moved to Capitec, and use it in combination with a Discovery card, have found they have negative fees, earn interest, and have all the services they need.