What’s in a home loan charge?

ARE certain Nedbank customers being charged R60 a year for a two-minute phone call from the bank? It would appear so. On top of its monthly home loan “service fee” of R52, Nedbank charges an extra R5 for clients who opt to ensure their homes with an external insurance provider instead of the bank.

Neither Absa, FNB nor Standard Bank penalise customers for taking outside insurance.

So what is the charge for? I asked Nedbank.

The answer: to cover the costs of ensuring that the financed property is adequately insured by an outside insurer.

“The monitoring of policies with external insurance companies is much more labour-intensive, resulting in additional costs.

‘‘Hence, a higher monthly service fee is charged,” said Timothy Akinnusi, head of sales and customer management at Nedbank Home Loans.

“Nedbank may, from time to time, contact the customer telephonically and/or in writing to provide proof of the external policy.”

Confused, I went back to the bank, asking for clarity on what “labour-intensive” involved and what “time to time” meant.

Said Akinnusi: “The R5 fee goes towards administration aimed at helping our clients who have opted for external cover to have peace of mind knowing that their home is sufficiently covered in case of unforeseen circumstances.

“In keeping with our client-centred strategy, the bank contacts these clients annually to ensure the cover remains in place and is sufficient to cover loss in the event of an incident.”

But surely a single local phone call is not worth R60? I said.

Silence. Weeks went by with no response.

When I asked the bank again last week, it replied with: “Nedbank has provided all the information on this matter and has no further comment.”

Its customers might.

Nedbank may, from time to time, contact the customer telephonically and/or in writing to provide proof of the external policy