# General Business Category > Business Finance Forum >  Foreign draft fee at Standard Bank

## Dave A

Standard Bank has got pretty creative as to when they charge a foreign draft fee. I know times are hard, but do banks really need to get this innovative?

As a Google Adsense publisher, I happen to get a cheque from Google every now and then. Google goes to some trouble to make sure I get as many Rands and as little grief as possible. And up until recently things have gone fairly well.

Google converts the USD value to Rands (at a far more favourable rate than my bank ever will), and sends a cheque for me to deposit which looks something like this:


(I took the liberty of blackening out the account number and signature just in case it proved useful to the wrong type of people, but otherwise that's it)

Now I will concede this does not look exactly like a typical South African cheque, but it meets all the requirements to be processed through the South African cheque clearing system without any fuss. The key features are:
it is drawn in Rands (ZAR)it is drawn against the Citibank Europe PLC account held at Citibank N.A. Johannesburgit has the correct data bar info at the bottom for the local (South African) interbank cheque processing system.Citibank N.A. is duly registered and set up to do business locally just as is required of any other bank operating in South Africa.
Every now and then I would have to remind Standard Bank of these features as the teller tried to steer me to the forex counter, but up until now sanity has prevailed. 

Unfortunately, no more. With my June deposit I got charged a foreign draft fee of R155.00. Me being me, I had to ask why. And so the real story begins...

*Round 1 - at the forex counter.*
I ask for the definition of a foreign draft and battle commences. 

Apparently this is something to do with a cheque or other financial instrument, even if it is in Rands, that cannot be processed through the local cheque clearance system. I point out that this cheque *can* be processed through the local system and could I please have a copy of that notice. 

Unfortunately, this being confidential internal bank correspondence I may not be provided a copy of this definition, but I am told they will draft a letter explaining why the fee was raised.

*Round 2 - with my bank manager.*
After waiting a couple of weeks and no sign of this letter, I took this up with my bank manager, who promptly marches me down to Forex. The letter was indeed sent, but unfortunately to a mis-spelt email address. I can only guess undeliverable email error messages disappear into the digital abyss at Standard Bank.

However, I'm given the printed original copy, and the message is this:



> Subject: Purchase of Rand Draft.
> 
> Dear Mr Alcock
> Please be advised that Rand drafts are foreign cheques drawn in our local currency, drawn by a foreign bank. The foreign bank credits Citibank who converts the currency and credit their Nonresident Rand account held in the books of Citibank Johannesburg.
> Although the draft is in Rand it attracts a fee of 0.60% with a minimum of R155.00 per cheque.
> 
> We hope we have been of assistance in clarifying our charges as per our Standard Bank tariff.
> Yours faithfully
> *name withheld*
> BDC Team Leader


Battle begins once again as I question how they know it's a nonresident Rand account and what difference does that make to them anyway - surely all this complicated conversion stuff is Citibank N.A.'s problem? All Standard Bank has to do is present the cheque for payment just like any other cheque. I suggest this is just another form of xenophobia.

I get long stories about copious forms and the complexities of foreign exchange which are far beyond my understanding and (the _coup de grÃ¢ce_), they really need to check through my account and raise this fee on all the deposits they have missed so far.

We all wander off in different directions licking our wounds.

*Round 3 - the next cheque.*
Now I'm faced with the problem of depositing my next Google cheque. So I decide to test Standard Bank's position on this one more time. I'm obviously a sucker for punishment. Happily Ms. BDC Team Leader isn't there so I have to deal with someone else. Maybe this time I stand a chance!

Battle duly follows. 

I am informed that they *used* to accept cheques like these for normal processing, but for some time now Standard Bank policy is that anything remotely foreign attracts the foreign draft fee treatment. 

Even more fortunate, my new sparring partner is obliging enough to acknowledge that I might have a point, and refers my query to a higher level of forex management to make absolutely sure. She sends off a copy of my cheque together with my contact details and I am assured a Ms S.B. from forex management will give me a call later in the day.

SIDENOTE: SB has just got to be the best initials ever if you work for Standard Bank.  :Cool: 

*Round 4 - Ms S B calls*
And battle is resumed. 

Ms S B proves to be a mine of useful information. During the course of the next twenty minutes I learn that:
I was actually charged a *Rand* draft fee, not a *foreign* draft fee, but they're both the same amount so no harm done.The new policy on ZAR cheques from foreign companies and banks (even if the account is held at a local bank) was implemented from January this year and I (along with all other Standard Bank clients) should have been charged this fee since then for all our Rand draft deposits.Ms S B is as surprised as I am at the inconsistent treatment of my deposits.The fee is raised because the cheque has to be processed through the international SWIFT system and not through the local South African interbank cheque clearing system.My "cheque" is not actually a cheque; it's a draft from a foreign bank.Nonresident Rand accounts held at local banks have nothing to do with the foreign draft fee charge. (Actually she seemed unaware there was such a thing as a Nonresident Rand account).The fee is justified because of the extra work involved processing my Rand draft through the SWIFT system.
When I told Ms S B that I felt duty bound to inform the general South African public about the details of Standard Bank's foreign draft fee policy, (my exact phrase was "I'd like to ensure this fee gets the publicity it deserves"), I was asked to hold on until the following day before doing that so that she could confirm, but I was welcome to check with Citibank in the meantime.

Given that what she told me contradicted virtually every point of the letter from Ms BDC Team Leader, getting some other opinions seemed like a very good idea. And after all, it *is* a Citibank N.A. cheque, so that should be a good place to start getting more information.

*Citibank's opinion.*
I called Citibank (which has quite an efficient call centre BTW) and yes, they are aware of the ZAR Google cheques. They are under the impression that the cheque will clear through the local interbank cheque clearing system without any problems as it happens this way all the time. 

(I've got the reference number for the call if anyone feels the need to confirm.)

But why stop there? We have other banks in South Africa too! 

*Another three opinions.*
Armed with my Google cheque I go visiting ABSA Bank, First National Bank and Nedbank to see if they would charge a foreign draft fee should I choose to deposit my cheque there and if the cheque posed any particular problems to process. The result of this survery revealed:
All three have a foreign draft fee.All three would not charge a foreign draft fee if I deposited this cheque with them.All three saw no problem with processing this cheque through the local (South African) interbank clearing system.
In the opinion of all three banks, this was a cheque to be treated just the same as any other regular "South African" cheque. It is a custom cheque, but there would be no deposit fee of any kind.
(I've got the names and branch details of each if anyone feels the need to confirm.)

If there *was* any difference worth reporting between the three, I'd say that the ABSA lady was the most charming, the First National Bank lady was the most professional, and the Nedbank lady was the most surprised.

As a fan of smaller and emerging businesses, may I quickly say to all the other banks out there, please forgive me for not visiting - but by now a clear pattern was emerging and you really need to get some branches in my area.

*Last round.*
I got that confirmation call from Ms S B. She confirmed with me that I had been given a written explanation already (that would be the letter she obviously hasn't read with all the stuff she contradicted earlier) and duly informed me that this letter can be relied on as Standard Bank's official position and that is the end of the matter.

What can I say? I know when I'm beaten. If the staff don't have a clear idea of why they are doing what they are doing, what are the prospects of them explaining it to me? 

They win. It' not worth pursuing further. Policy has been set and we all must live with it.

I may be too thick to understand why Standard Bank feels compelled to raise this deposit fee on this cheque, but I *do* know that any company is perfectly entitled to set up their own policies, charge what the heck they like and define things on their own terms. 

Customers can take it as presented or go elsewhere. As consumers, all we *need* to know is the effects of the choices before us so that we can make reasonably informed decisions. 

It's the very foundation of healthy competition and I'm delighted to see it thriving in the banking sector.

*What I have learnt.*
Four things come to mind:

1. The answer you get isn't always going to be the answer you are looking for.

2. Corporates are possibly worse at communicating within themselves than they are at communicating with their customers.

3. It's obviously not very smart to deposit foreign looking cheques at Standard Bank even if they are drawn against a local bank. The bill that goes with it is entirely avoidable and personally I will be depositing these cheques elsewhere in future.

4. This risk of avoidable deposit fees may extend to cheques from Nonresident Rand accounts - which I must warn could be near impossible to detect in advance. My sister-in-law is a non-resident who has thoughtlessly been issued with a standard South African looking cheque book by one of our local banks. And honestly, looking at her cheques, you'd never know!

*Help spread the word.*
All that remains is to give this foreign draft fee policy the publicity it deserves so that other ordinary SA citizens can make informed choices. I don't think Standard Bank has done a particularly good job on this one. And the problem is as a result I'm struggling to grasp the dividing line myself.

So, the only way I could think of warning everyone else was to tell my story. What you do with it now is up to you.

R155.00 is not that big a deal in my life anymore (although the fact that it makes up 12.3% of the cheque does irk somewhat). Personally I find blind stupidity far more significant.

But there are lots of young webmasters and bloggers out there who are going to be pretty damn upset when they lose R155.00 on their first Adsense cheque one day. And it is entirely avoidadable.

Hopefully they'll read this before they go deposit their cheque.

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AmithS (24-Feb-13), Blurock (05-Mar-11), daveob (11-Aug-09), duncan drennan (12-Aug-09), Marq (12-Aug-09)

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## Faan

Thanks for the info Dave

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## IanF

Dave,
Wow what a run around, maybe (this is a big maybe) a public relations wallah at Standard Bank will read this and get embarrassed. Is the MD still Jaco Maree or someone else? If he has his his PRO guys trolling the web they should pick this up.

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## Dave A

> Wow what a run around


I believe if you're going to do something, might as well do it properly  :Big Grin: 

Seeing as I was burning the petrol anyway, I also collected info on the various foreign draft fee rates for those occasions when I *do* have to deposit USD cheques.


Overall FNB looks like the best deal, although exactly which is the cheapest for a particular value is obviously affected by the amount involved.

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## Marietjie Steyn

Thanks for the info Dave.  We have just started our Google Adsense and wow what a shock if you have to pay that amount to deposit the cheques.

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## defZA

Oh my word, I just fired an email off to my bank when I saw:
FEE-FOREIGN DRAFT 2008     -155.00 

I haven't deposited google cheques in about 3 months, but this is the first time I see this fee!

I then googled and found this page.

Seems like they were thinking "hmm... people who get more money should pay more fees!"
This is a smell I don't like.

And it's really making me feel like I shouldn't entertain Standard Bank with my account anymore.
Capitec Bank or FNB Bank will surely not do this kind of fee hunting... if they do, there's always another bank who would be happy to have my account.

I will threaten to close my account and see if they will cancel this fee for me.  I mean, I'm sure they will lose more if I close my accounts than this 3x155 fee. :O Wish me luck!

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## Dave A

I wish you more luck than I had, defZA.  :Cool: 

From my side, the story isn't over yet. I also made a post at HelloPeter, which led to this response from Standard Bank:



> Good day Mr Alcock
> 
> Thank you for allowing us the opportunity to address your complaint.
> 
> We sincerely apologise for any inconvenience caused.
> 
> I have investigated the matter and noted that our Durban North branch has already discussed the matter with you.  We are unable to bypass or exclude the fee as it is applicable.  We cannot confirm as to why you were not charged on a few occasions as this could be an error made by the teller.  We are investigating that and will address internally.
> 
> We have in the interim sent your comments to the relevant business unit for future use.  We thank you for your comments as this will help us better our service in future.
> ...


To which I responded:



> Dear Pragasen,
> 
> Thank you for your attention to this matter and your response.
> 
> I regret your response fails to address the conflicts between the explanations provided. As I tried to indicate in our phonecall, the problem has gone beyond the raising of the charge itself, but the conflicting explanations as to why the charge was levied. For the full story, please read http://www.theforumsa.co.za/forums/s...ead.php?t=5560 which will provide a deeper perspective.


I have yet to get a response to the email and the three messages left at Standard Bank's Complaint Resolution Centre. 

Companies that respond indeed! More like companies prepared to pay.

Ultimately it looks like the solution is to bank this sort of cheque elsewhere. Prevention is better than cure.

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## defZA

Ja, that's lame that you have to fight for something basic like dropping a cheque in.

Yeah, depositing it at a different bank is a great solution if you have another account somewhere.  e.g.  a FNB 32day deposit account.
I hope I can deposit into a 32day account with a cheque :/

Thanks for all your effort!

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## Dave A

I'm sure it wouldn't hurt to have other people bitching raising the issue with Standard Bank.  :Wink: 

Originally I was wondering how many other people might have been affected, or whether my experience was just isolated to my branch misinterpreting the policy followed by an attempt to bury the issue. It just seemed so odd that one bank would see this totally differently to all the others. But if you've had this too, it means it's not just an isolated case.

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## wynn

Now escalate the issue, go to another large branch of Standard Wank, on the other side of town,and ask their foreign exchange dept for a written explanation of what happens if you deposit your Google cheque at their branch because you may be moving to that neighborhood and are looking for a bank.

 :Wink:

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## Dave A

I think that's not going to work either. It now seems very clear this is an established policy, not a mistake or misinterpretation.

I've just got off a fairly lengthy phonecall with Rita at the Complaints Resolution Centre. Their position is that Citibank N.A. is a local branch of a foreign bank and that Standard Bank has to do a lot of additional work to clear these cheques. She wouldn't be drawn on what this additional work might entail, but they *will* be raising the foreign draft fee in these situations and that's the end of it.

That got me thinking what other banks might attract this fee on their ZAR cheques. Doing a bit of research, I found this list of banks registered with the SA Reserve Bank. If you click on the *registered branches* link you'll find a list of banks which fall in the same category as Citibank N.A. (For anyone who ever wondered why frames have a bad reputation when it comes to website design, this particular application demonstrates the potential design flaw quite well).

The only angle left was the lack of notification. Rita wasn't having any of that either. The fee is on their rates card (undeniably true). However, she disagreed with me that clients should have been notified of this *change of application* of the fee.

May I commend Rita for clearing that up in my head, and to recommend you take Rita's advice - "You are free to deposit these cheques elsewhere."

Let's hope the other banks don't follow Standard Bank's lead on this anytime soon.

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## IanF

I went to hellkom.co.za to get contact details for telkom, as my phone line is dead. 
Anyway they have a similar story to Dave go to hellkom and it is the first full article. It is just past all the headlines.



> This site has Adsense ads smattered here and there for the fun of it, and of course it brings in a trickle of money every now and then. Google sends payment for the Adsense earnings via cheque, as EFT, SWIFT etc is not available for South Africans. So now, once this cheque is received, one merrily prances off to the bank in the hopes of depositing the earnings into one's bank account, where the money will lie for X number of days before being spent on Eskom and Telkom bills. Right. The cheque goes to the cashier who then slams a poor rubber stamp into oblivion a few times, and then hands you the receipt, after which merry prancing continues back home. A few hours later, tired from prancing and sitting in front of the PC, you decide to check the amount of zero's in your bank balance. To utter shock and horror, the internet banking says something along the lines of FEE - FOREIGN DRAFT, and a -R155 appears in the right hand column. Not the column which shows you when you GET money mind you, the column that shows you when money is taken by the powers that be or given to those requiring it.


So maybe all these banking conspiracies are right!

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## sgafc

I lost all my earnings on an Adsense account I once had. Truth is indeed stranger than fiction. Can you blame us if we see a conspiracy behind every bush :Wink:

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## IanF

> I lost all my earnings on an Adsense account I once had. Truth is indeed stranger than fiction. Can you blame us if we see a conspiracy behind every bush


Now we need an update it behind every Obama :Big Grin:

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## Sieg

Bank charges

Sorry to change the "thread" here somewhat, Dave, but I think most of us are somewhat outraged by the petty nonsense of our banks that charge their customers for every cough, sneeze or f*rt. Why, they are getting as bad as attorneys!

Speaking of the latter, for years now, when a property is sold and the purchaser has to fund the acquisition by means of a bank (home) loan, the transferring attorneys have simply provided the bond registering attorneys (i.e. the attorneys that the bank has instructed) with a whole bunch of documents that the banks require, such as "certified copies" of the electrical compliance certificate, a conveyancer's certificate as to the purchaser price, and so on. Over time, this list has grown. This was done "free of charge".

Feeling somewhat outraged that Nedbank charged me R330.00 for a certificate of balance (X 2 = R660.00) because the auditors required these certificates, one for end Feb and one for end August, I decided to get my own back. 

I now send an account to the bank, care of the bond registering attorneys, for all the documentation required of me. It amounts to just under R400. 

The bond attorneys and their client banks are understandably "outraged". I have ignored the tirade and simply say "pay me, then you will get the documents. And, oh, by the way, in the interim I am putting the purchaser on notice to provide guarantees" which then puts the cat by the pigeons, as Gideon from Virginia used to say. 

Sieg

PS: Should we not all adopt the practice and habit of changing all our banking accounts at least once a year as a show of solidarity to impress upon the banks the notion that their customers are no longer going to tolerate this nonsense?

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## Dave A

> PS: Should we not all adopt the practice and habit of changing all our banking accounts at least once a year as a show of solidarity to impress upon the banks the notion that their customers are no longer going to tolerate this nonsense?


There's that small hiccup of track record. Fine if you don't need any finance, but for mere mortals, that track record is pretty important.



> Feeling somewhat outraged that Nedbank charged me R330.00 for a certificate of balance (X 2 = R660.00) because the auditors required these certificates, one for end Feb and one for end August, I decided to get my own back. 
> 
> I now send an account to the bank, care of the bond registering attorneys, for all the documentation required of me. It amounts to just under R400. 
> 
> The bond attorneys and their client banks are understandably "outraged".


Raising a fee seems fair enough  :Big Grin: 
Just who do they propose *should* be footing the bill?

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## wynn

The bank's are only interested in the last three months transaction history and any RD cheque history, other than that open a new account and after three months close the old account, you will feel no pain.

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## AndyD

Interesting stuff, thanks for the info.

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## Blurock

This is just another example of how banks (and sometimes other businesses) slip in some unannounced charges when things get desperate. This is a direct reflection of the ethics (or lack of it) in our business community and society in general. Punish them by moving your account if they do not want to conform.

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