The Banking rip offs continue.

1299

 

Not many of us who use the banking system understand it properly, and so, the banks continue to take advantage of the people’s lack of knowledge. There is a gross advantage being taken of our people by some of the banks on the island, and the Minister of Finance must ensure that the Central Bank looks into these illegal practices.

When non-RBC Bank clients use their debit card at an establishment with an RBC Bank card machine to process a US Dollars transaction, the account at cardholder’s bank is charged an amount higher than what the cardholder swiped for. Here is how it works: When WIB, FCIB, Republic Bank, Banco Di Caribe or Orco Bank debit cardholders swipe their debit card at an RBC Bank merchant for a US Dollars amount, RBC Bank converts the US Dollar amount to NAF by multiplying it at 1.82 and then divide it by 1.78 to convert it back to US Dollars.

For Instance: You swipe US$100,= The bank processes the following transaction: US$100 X 1.82 : 1.78 = US$102.25 and the cardholder’s account is charged US$102.25
There are a number of illegal actions taking place here. First of all, the cardholder’s bank does not have the authority to apply extra charges to the cardholder’s account for a local US Dollars transaction that does not involve cash. Secondly, the 1.82 rate includes the 1% exchange tax, which is charged only when withdrawing US Dollar cash and/or when sending money from a resident bank account abroad, outside of St. Maarten.

There is no cash involved when swiping one’s debit card at a local merchant, so the 1% exchange tax is not applicable in such cases. As there is no cash involved in the transaction, I doubt very much that the bank submits the funds collected to the government. I therefor urge the Minister of Justice to look into this illegal practice.

Furthermore, some merchants blatantly post signs in their establishments indicating a minimum amount for transactions paid by card. In the case of a VISA or Mastercard credit card an additional fee is charged to the cardholder to cover the bank charges, while their contract clearly states that this should not be done. The banks must ensure that their clients are not taking advantage of the cardholders by applying these tactics, and when this is discovered, the bank must take action against the merchant.

I will not bother to go into the ordeals to open a bank account on this island, even though the central bank representatives during a meeting in parliament, ensured the members of parliament that the only requirements for residents to open bank account in St. Maarten is a valid ID and the source of the funds to be deposited to the account. This can be a job letter, a rental agreement or any other form of proof of where and how the cardholder gets the funds to be deposited to the account.

I am calling on the authorities to look into the illegal practices by some of the banks on the island, as the ripping of by the banks continue.

Fernando Clark