After Debit Card Uproar, Banks Look to Sneaky Fees
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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.
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I just closed my Bank of America account today. BofA actually wanted a $10 fee to CANCEL my account. I don’t know if this is a new fee as a result of the November 5th Bank Transfer Day, but I refused to pay it and had my joint savings/checkings consolidated into one account (no fees on transactions). Then, I had the sum made out to myself in the form of a cashier’s check, which I then deposited across the street in a credit union account I set up 2 weeks ago, thus severing my ties with BofA for good. I would have celebrated by treating myself to pancakes at the IHOP next door to BofA, but I’ve been boycotting them since Saturday morning when IHOP charged me 80 cents for a “to go” fee. It’s getting out of control.
Posted by: MMinDC | November 14, 2011, 4:52 pm 4:52 pm
“Then, I had the sum made out to myself in the form of a cashier’s check…” Maybe so, maybe no…but NO institution that I know of will make out a cashier’s check without a service fee. I’m also doubtful of the claim of someone making out a cashier’s check out to themselves for the full amount of the account (they have to check to verify the funds are there) without any fuss if they really were out for customer’s money as badly as was claimed.
Posted by: Publius | November 14, 2011, 5:15 pm 5:15 pm
Banks “may” get “sneaky”? They MAY get sneaky?!?! You bet your sweet bippy they’re going to get sneaky!
Posted by: cassandra | November 14, 2011, 5:41 pm 5:41 pm
problem solved. no more money will be deposited into my accounts. this world is a complete mess.
Posted by: monday pete | November 14, 2011, 5:42 pm 5:42 pm
So it appears the banks have gone back to the old way of operating. Increase all fees unilaterally to make up for lost revenue. All the regulations that are in place, all the disgust shown by politicians, all the protest by “occupy wall street, and nothing has changed, the banks still will do what they want to do. But hey, keep $15,000 in your Bank of America account and you can avoid the fees – for now.
Posted by: Give Me a Break | November 14, 2011, 5:56 pm 5:56 pm
capitalone had my cash deposit for almost $200. pending for three days & charged a hold fee for 3 transactions that would have overdrawn the account without the deposit.The 3 transactions posted that morning while the4 deposit was declared pending untill the end of the bussiness day. yea, the banks are getting down right hostile…but they are staying just within the legal requirments. when i talked to the local branch about this they told me if i didn’t maintain at least $10,000 in the account ,they didn’t really mind if i close the account & relocated to another bank. I would have paid cash for the 3 transactions if i would have known they were holding cash deposits. For the banks to hold checks is understood but cash……
Posted by: Michael | November 14, 2011, 6:18 pm 6:18 pm
The banks being sneaky. Who would have thought?
Posted by: Moby49 | November 14, 2011, 6:22 pm 6:22 pm
I closed my B of A checking account even after they said no 5.00 debit card fees…I do NOT trust them that they won’t try to scam me with other fees. I went to AllyBank.com which is actually great because now I can use my AllyBank ATM debit card at ANY ATM machine with no fees!!!! So if I’m near a Chase ATM, or a Wells Fargo ATM or even a B of A ATM, I can get cash and don’t have to pay any ATM fees! Sweet!!
Posted by: RalphF | November 14, 2011, 6:24 pm 6:24 pm
The moment my bank starts playing games I will close my account and transfer all my money and paycheck to a credit union
Posted by: Basel | November 14, 2011, 6:31 pm 6:31 pm
BOA and other banks were forced by the government to give risky loans under the Community Reinvestment Act and now those same banks are vilified for following the law. Why is it there is always a NGO scapegoat when government is to blame?
Posted by: Jo | November 14, 2011, 7:00 pm 7:00 pm
We’re setting up accounts at a local community bank in our plan B just in case BoA tries to get too “sneaky”. Already moved an IRA CD. Tomorrow all our savings is being moved.
Posted by: newcountryman | November 14, 2011, 7:01 pm 7:01 pm
There is nobody more sneakier and dishonest than the Pelosi, Kerry Obama, Bohener and the rest of these crooks voted in office using legislation they are passing to benefit them with insider trading to line their pockets and friends with money. We citizens would be put in jail but they just scoff at us and will tell you they are above the law. How pathetic is this country.
Posted by: Mark | November 14, 2011, 7:09 pm 7:09 pm
This is exactly the mentality that urged Andrew Jackson to utterly crush the major financial institutions during his time as president. The only difference is that they can’t hold the government’s money hostage, so they have to hold the average Joe’s money hostage.
It’s time to teach them that lesson again, I think.
Posted by: AmericaThePitiful | November 14, 2011, 7:27 pm 7:27 pm
The audacity of an organization to use MY MONEY to earn them money (and lots of it), and then charge me a fee or fees for doing so?
It’s unconscionable. Period.
Posted by: GOALTENDING | November 14, 2011, 7:41 pm 7:41 pm
Wells Fargo HAS BEEN charging $2 each month just so customers can have a photocopy of their cancelled checks in the monthly statement.
Posted by: doctordon6 | November 14, 2011, 7:41 pm 7:41 pm
Bank local (credit unions), buy local (farmers’ markets and local vendors), we win and big business loses. Simple.
Posted by: mkegirl | November 14, 2011, 7:57 pm 7:57 pm
The larger banks are definitely going to look for more money, and don’t think for a second that you will be able to see it easily.
I still don’t understand why people are using the larger banks unless they are bouncing around the country all the time. Heck, if the free ATM is another block out of your way, the most likely outcome is you won’t blow your money without thinking about it first.
Also, don’t forget to keep an eye on your 401k, if you get any info on changes, demand a breakdown of the cost of maintaining it from your administrator (most likely they will give you an arithmetic formula). If you can’t get a straight answer, look into IRA’s at local banks. The larger banks that are “hurting” for profits have their hands in allot of your lifetime savings.
Best reason for switching to a Credit Union or regional Bank:
If they are too big to fail, MAKE THEM SMALLER.
Posted by: Dacker | November 14, 2011, 8:00 pm 8:00 pm
There are no “hidden” fees. Decades of consumer laws and regulations make it impossible for banks to “hide” anything. The problem? Consumers CAN’T BE BOTHERED TO READ THEIR ACCOUNT DISCLOSURES! Lazy Americans, just as Obama said. Well, lazy, soft and unimaginative. He’s quite the leader!
Posted by: s | November 14, 2011, 8:27 pm 8:27 pm
The poster “Publius” needs to learn to check his or her facts before they post in order to not appear a fool.
The fact is, there are plenty of accounts with free services such as cashier’s checks, even at BofA.
Publius goes on to write: “I’m also doubtful of the claim of someone making out a cashier’s check out to themselves for the full amount of the account (they have to check to verify the funds are there) without any fuss if they really were out for customer’s money as badly as was claimed.”
Publius, this is amazingly simple. It goes something like this:
Teller: “May I help you?”
Customer: “Yes, I’d like to know my available balance on my account. Here’s my ID.”
Teller: “Your available balance is $___.”
Customer: “Thank you. Now I’d like to have a cashier’s check in the amount of that available balance. I believe it is free with my account.”
Teller: “Yes, it is free with your account. Now, you know that if you get this cashier’s check, your available balance will be $0.00. If there are any unknown outstanding charges or checks, this would cause them to be returned or to be paid and an NSF fee levied. Also. having a balance of $0.00 at the time your account cycles will automatically cause that account to close, right?”
Customer: “Thank you, I’ll take my chances.”
Teller: “All right, here’s your cashier’s check. Will there be anything else I can help you with today?”
Customer: “Nope, that will take care of it. Thanks, and have a nice day. Goodbye.”
Teller: “Thank you for seeing us at BofA. Have a nice day yourself. Goodbye.”
See, Publius? It isn’t nearly as hard to imagine, now that someone’s given you a play-by-play, how someone was able to get a cashier’s check without fuss and without knowing beforehand what was his or her available balance. Notice that it’s hard for the bank to be fussy with the customer when the customer knows his or her rights under his or her account privileges.
Publius, it might be difficult for you to understand now, but nearly everyone who read your comment knew almost instantly how the customer was able to do exactly as he or she claimed. All it took was a moment’s consideration plus a little life experience. But don’t worry. I am certain this post will show itself as a life lesson for you, and once you have some more life experience away from your parents you’ll be able to see how similar situations can and do happen every day to normal folks.
Posted by: RR | November 14, 2011, 9:18 pm 9:18 pm
BOA and other banks were forced by the government to give risky loans under the Community Reinvestment Act and now those same banks are vilified for following the law. Why is it there is always a NGO scapegoat when government is to blame? POSTED BY: JO |*********************
First of all, the NEOCONS keep saying that the Government had a gun to the bankers head,
if they didn’t follow through on these mortgages. Funny, I never heard one of them complain or
get shot when they where reeling in bonus after bonus. Gee, maybe if they spend less time
betting on having this country fail, this would have been minimized.
Posted by: michael | November 14, 2011, 11:15 pm 11:15 pm
S | NOVEMBER 14, 2011, 8:27 PM 8:27 PM………”Consumers CAN’T BE BOTHERED TO READ THEIR ACCOUNT DISCLOSURES! “………And take personal responsibility? It is much easier to cry and blame someone else. Does that remind you of anyone in Washington?
Posted by: deanbob | November 15, 2011, 7:43 am 7:43 am
Pelosi’s lame excuses are pathetic. Yes, many of both party do it and many of both party have resisted attempts to change the rules for insider trading in congress – to no avail.
Posted by: deanbob | November 15, 2011, 7:46 am 7:46 am
RR – “The poster “Publius” needs to learn to check his or her facts before they post in order to not appear a fool.” And the poster “”RR” msut be talking purely hypothetically rather than from actual banking experience and needs to know that banks don’t juist hand over a cashier’s check. Customers PURCHASE them, just as they do traveller’s cheques. From BofA’s own information web site: “Do you offer cashier’s checks? Yes, Bank of America offers cashier’s checks. TO FIND THE EXACT FEE FOR YOUR ACCOUNT (caps added for emphasis), please call the number on your statement or checks, or the number for Bank of America in your local telephone directory.” Despite the poster’s implication, they didn’t walk away for free. Further, accounts don’t close simply because the balance is zero at the end of the current billing cycle. The account will remain open unitl formally closed by the bank or customer, and the bank will continue to charge service fees for which the account holder will be responsible (as well as for any checks, autopays, or debits that might post against the acount and any returned check fees the payee may levy for non-payment) until it is formally closed. And as I clearly stated, IF the bank really wanted to get the money as badly as the poster to whom I responded seemed to think, I doubt BofA couldn’t have seen what was up and ensured that there was enough to cover any account fees and/or ensured that they could pursue legal action for recovery against the account holder to recover them. I’ve been banking for nearly 40 years and none of this is new to me or anyone else who has been maintaining accounts.
Posted by: Publius | November 15, 2011, 11:20 am 11:20 am
I pulled $15K out of BOA yesterday. They charged me $10….
Posted by: newcountryman | November 16, 2011, 8:35 am 8:35 am
Bank of America is the worst bank to have. We had a mortgage through one bank and Bank of America took it over. When the financial status of America tanked, we tried to get them to work with us on our mortgage. However, rather than work with us and allow us to remain in our home, they chose to foreclose since we had a VA loan. That meant they were guaranteed the amount of the loan, even though we were in Las Vegas, the worst city to live in with the economy the way it is. The tax assessor says our property is worth 32K and when we bought the house we financed 260K which was the value at the time. We asked them to work the arrears out with us and even consider just adding them back onto the loan and allow us to continue to pay the regular mortgage amount but they said no… and even when the law was passed to help home owners, they refused us. Foreclosing on us, causing us to have to abandon the home… which still hasn’t sold over a year later. So, no, I DO NOT RECOMMEND EVER DOING BUSINESS WITH THEM FOR ANY REASON!!!!!
Posted by: Madi512 | November 16, 2011, 12:20 pm 12:20 pm
as for account closing fees?? Somehow I don’t think they would hold up in court if they were not disclosed and not agreed upon fees when you opened the account. Or at a minimum they previously sent you an ammendment to your account agreement and you did not address it then. Then they might. Just my 2 cents… However, I have cancelled all of my WF, BoA and Citibank accts and moved to a local credit union which provides everything for free. They even belong to a credit union co-op type thing for the ATMs so I have many many many more ATMs I can use fee free now. Good Luck!
Posted by: Kevin | November 16, 2011, 2:15 pm 2:15 pm
Hi, everything is going well here and ofcourse every one is sharing data, that’s really good, keep up writing.
Posted by: Denny Boniol | February 1, 2012, 7:14 pm 7:14 pm
But what about the banks that have been bailed out in the past?? Where did that money go?? Why is it justified that the consumers are the ones that are required to have the fees when the CEO’s are still getting their bonus checks after those bailouts?? Once my car is paid off through Wachovia/Wells Fargo, I am done with corporate banks. If it is not one thing, it is another, with contracts changing “without notification”. Yeah, written in most all contracts you sign, there will be a claus that says “subject to change without prior notification,” but if they give you the prior notification, Wells Fargo will not allow you to look the information up on a smartphone, you have to look it up from a computer (which I currently do not own).
This country is being run by the banks. Pretty soon they will have full control over our funds that we put into them, and if we do something wrong, they will freeze our accounts and then where will we be??
Posted by: Crystal | February 7, 2012, 7:24 am 7:24 am