Now, to a consumer alert for all parents taking their children to college. An abc news investigation has found that some 900 universities are collecting millions of dollars in what are essentially... See More
Now, to a consumer alert for all parents taking their children to college. An abc news investigation has found that some 900 universities are collecting millions of dollars in what are essentially bounties from big banks for getting students to sign up for check accounts and debit cards that many are surprised to find include expensive fees. Abc's brian ross has that story. Reporter: As freshmen arrived at the university of minnesota, there was a marching band. Remarks from the president. Welcome to your new academic home. Reporter: And a pitch to open a supposedly no-fee checking account at the tsf bank, with the student i.D. Serving as the tcf card. I should get a tcf bank account. Makes sense. Reporter: But the pitches we heard during orientation, believe leave out that the tcf is not always as free as employees describe. Everything is free. No minimum balance. Again, everything is free on the card. There's no minimum balance. Reporter: Only if the students press or they read the fine print, do they discover the charges could include a $37 fee for any overdraft. The $37 fee doesn't happen that often. They're substantial for a lot of students. Reporter: According to the fdic, half of young adults will overdraft on average, seven times a year, which could mean hundreds of dollars in added fees for students. A simple internet search can often find a much better product, where the checking account is truly free. Reporter: But it's good business for tcf, who has just become the official bank of the university of minnesota, paying $35 million to have its name on the football stadium. According to the marketing contract, the bank pays the school $1 million a year. Including a bonus of $34 for every student who signs up. Like a bounty, says congressman george miller. They have the best deal for the university. Not for their students. Reporter: The president of the university ofinnesota, eric hailer, refused to talk As did his public relations man, as he handed us a written statement defending the tcf deal. Is it fair, would you say? I'm not in a position to answer that question. Reporter: The statement from the school and from the bank says students are free to choose my bank they want. And that the multimillion-dollar contract pays for scholarships and other programs. But the consumer financial protection bill will open an inquiry into those bills which they say often treat students as little more than backpacks and dollar science. Good for the parents and the students to know. Reporter: A close look. Thanks so much.
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