After an uproar of protests, the largest banks have said they are not going to charge customers for debit card purchases, but hidden overdraft, ATM and other fees are likely to rise, say consumer advocates.
For years, banks have had an arsenal of fees they could charge consumers to increase revenues, said Ed Mierzwinski, consumer program director of U.S. Public Interest Research Group, which published a report, Big Banks, Bigger Fees, earlier this year.
Mierzwinski said he believes banks are offering more a la carte services from what used to be one package offered to consumers. He said the trend is similar to what telephone companies have done over the years.
“They’re un-bundling what used to be part of service and charging you more for it,” he said. “Everybody blames Durbin. That’s hooey.”
The Durbin amendment of the Dodd-Frank Act capped fees banks charge merchants when customers make debit card purchases to about 21 cents. Before the amendment was implemented on Oct. 1, the average fee banks charged merchants was 44 cents per transaction.
“The Durbin amendment got rid of unfair fees that forced cash customers to subsidize bank customer rewards,” he said.
Another fee that could be on the rise is the charge to use another bank’s ATM, Mierzwinski said, not to be confused with an ATM’s surcharge. ATM operators are required to acquire consent that users will be charged surcharge of around $3 for using an ATM not owned by their bank.
Consumers usually see another $2 on their monthly balance statement charged by their banks, but that is likely to rise by another 50 cents or more.
Banks may be increasing the fees quietly without your knowledge, the New York Times reported, even charging $5 to $20 to replace a lost debit card.
The 10 biggest banks disclose an average of 49 service fees, according to the Pew Charitable Trusts’ Safe Checking in the Electronic Age project, which was launched a year ago.
The most common fees not disclosed on the websites of the biggest banks were in the category of overdraft penalty fees, according to Pew’s report published in April, Hidden Risks: The Case for Safe and Transparent Checking Accounts.
Ardie Hollifield, project manager of the Pew project said it is unclear if fees have increased in the recent months related to plans to halt debit card purchase fees. Bank of America canceled plans last month to charge customers $5 a month for making purchases with their debit card. Chase and Wells Fargo have stopped testing their $3 fees in limited markets.
Pew intends to publish an updated report next year.
The current report recommends that the Consumer Financial Protection Bureau require banks to publish a one-page disclosure box of their fees, similar to the “Schumer” disclosure box for credit cards, named after Sen. Charles Schumer, D-N.Y. The median length of a bank’s disclosure describing fees is 111 pages, according to Pew.
“The disclosure box is real-world solution for consumers to figure out the fee,” she said, adding that Pew proposes it be made available at least on bank websites.