Our great Banks NEW FEES! $57 overdraft fees

Search

Rx .Junior
Joined
Feb 24, 2005
Messages
2,376
Tokens
Coming Soon: The $57 Overdraft Fee?
DebtKid.jpg
Posted by DebtKid :: April 15, 2008 @ 2:40 pm

gas_prices.jpg

It's not just gas prices anymore that are out of control...
With banks' lending divisions struggling across the country, many banks are looking to bump their bread and butter: fees.
Across the pond in the UK, the average overdraft fee is an outrageous $57, and it might be only a matter of time before higher fees hit the US. British consumers are fighting back, launching lawsuits against the top 5 banks in Britain. Some $810 million was refunded to British customers in the first half of 2007 because of the litigation. Will lawsuits soon be coming to the US?
US consumers paid $38 billion in bank fees in 2007 alone. $38 billion!



 

Rx .Junior
Joined
Feb 24, 2005
Messages
2,376
Tokens
From MSN

A few weeks ago, we shared the story of Rachel Poor, who faced a double-barreled 21st century nightmare when an identity thief stole her money and her bank piled on with penalty fees. In addition to losing thousands of dollars to the thief, Poor faced a maddening set of overdraft charges -- 22 to be exact -- while she tried to dig out of the hole her imposter put her in.
The column resonated with Red Tape readers -- 1,300 comments were left on the blog, a record. Many writers expressed bitterness and frustration toward their banks and described their own overdraft fee nightmares.
Well, help may be on the way. Two major studies are being conducted to examine bank bounced check practices -- one by the Federal Deposit Insurance Corporation and one by the General Accountability Office, Congress’ investigative arm. Federal legislation introduced by Rep. Carolyn Maloney, D-N.Y., would bar many current bank overdraft practices. And a congressional hearing is planned for later this summer to highlight abuses of the practice.
"Congress should help rein in the billions of dollars in hidden overdraft fees that bank customers are forced to shell out every year,” said Maloney, who chairs the House Subcommittee on Financial Institutions. “Hidden overdraft fees are unfair, and fairness is an essential component of a safe and sound banking system.”

Why do overdraft fees seem to generate so much ire? For starters, they often come as a surprise. That's the reason that this month's "Gotcha Room" explains how easy it is to incur an overdraft fee. Click here to watch the video.
Here’s the crux of the problem: Many people believe that if they ask an ATM for more money than they have in their account, the ATM will simply say "no." Not True! One upon a time, ATMs were good at rejection. Today, they’ll say “yes” to nearly anyone.
Just about anyone with a checking account in any national bank is automatically enrolled in something called "courtesy overdraft protection." The “courtesy,” it turns out, is that the banks will allow withdrawals that exceed balances and then tack on a hefty fee of about $35.
NOT JUST ONE OVERDRAFT FEE
And as Rachel Poor found out, often there are multiple charges. After an account “goes negative,” every account withdrawal -- by ATM, by debit card purchase, by online bill payment – incurs another fee. It’s easy to wrack up four or five of those in a weekend, or 22 in Rachel’s case.
Debit card purchases add to the confusion because banks allow debit card purchases even when accounts don't have enough money to cover the transaction. That profitable permissiveness can easily turn a $3 hamburger into a $38 hamburger.
No one knows exactly how much money banks are making this way, but there are some good guesses. Fees make up about one-third of bank revenue at this point, and overdraft fees make up a large chunk of that. The Center for Responsible Lending estimates that banks collected $10 billion in overdraft fees during 2005.

Judging from the number of people who wrote in after Rachel Poor's story, that estimate might be low.
Consumer advocates object to the fees on many levels. Chief among them -- using a debit card was supposed to be the healthy alternative to credit cards, which were designed to encourage people to spend money they don't have. Debit cards were supposed to prevent that bad buying habit, as purchases are withdrawn directly from checking accounts. At one point, it was impossible to spend more than you had with a debit card. But with "courtesy overdrafts," debit cards become a lot more like credit cards -- only worse. Not only can you overspend, but the loan you are given as a result is just about the most expensive loan out there. The effective annual percentage rate on debit card overdraft fees can be 1,000 percent. In most cases, consumers hovering near a zero balance and buying that $3 hamburger would be far better off taking out their credit cards, even if they are revolving users who pay interest immediately on the purchase.
SURPRISE! A $38 HAMBURGER
Making matters worse: Consumers rarely know when they are about to buy a $38 hamburger. It’s nearly always a surprise when the monthly billing statement comes.
It doesn’t have to be that way. A simple warning would be nice, something like the "foreign ATM $2 fee" warning we are all so familiar with. Something like this:
ATM: "I'll let you take out that $20 you don't really have, but it will cost you an extra $35. Are you sure you want to do that?"
You (turning to friend): Uh, Bill, can you spot me $20?
Implementing such a warning screen is one of the main provisions in Maloney's bill. Of course, banks aren't interested in adding the warning. Nessa Feddis, spokeswoman for the American Bankers Association, said it’s not technically possible. There are always outstanding checks or pending electronic transactions (such as scheduled Internet bill payments) which make real-time balance checks impractical, she said.
“There will always be the possibility of approving a transaction when there aren’t sufficient funds,” she said. “It’s consumers who are in the best position to know exactly what their balance is.”
Feddis also said consumers appreciate the convenience of overdraft protection, as they don’t face the hassle of rejected purchases at checkout counters. And in the case of bounced checks, the fees can actually save consumers money. In the past, a bounced check would incur two fees -- one from the bank and one from the merchant. Now the bank covers the check and charges only one overdraft fee, she said.
But that benefit of overdraft protection only applies in the case of bounced checks. Covering consumers’ debit purchases and then charging a $35 fee doesn’t save the consumer money compared to the days when the transaction would simply be declined.
Given the decline in popularity of checks, the majority of overdraft fees are now generated through debit transactions and other electronic transactions, the Center for Responsible Lending found in a recent study.
FED RULING BACKED BANKS
That's one reason banks fought -- and won -- in the last round of Washington D.C.-hand-wringing on the subject. Two years ago, the Federal Reserve issued new rules governing overdraft protection, but the rules have done little to help consumers. In fact, they may have made things worse. The Fed declared that overdraft fees were not a loan and thus not subject to Truth in Lending disclosure practices, which would include clear publication of those obscene annual percentage rates. Now, only banks that market courtesy overdraft protection service must explain the cost of the money. Banks that keep the service and the fees quiet only have to include small-print notices when you open your account.
Maloney's bill would change that, too, as it would redefine overdraft fees as loans.
Feddis argues that publishing those rates would only confuse consumers.
"People understand dollars. ...The rate would be misleading to consumers," she said. "It's not a loan, it's a service fee."
Whatever they are, clearly many consumers hate them. More important, many consumers are surprised by them, and that should never happen. ATMs should warn consumers before they overdraw their accounts -- something that is just as feasible as account balance checks, despite what banks say. And if warnings aren’t given, hamburger purchases should simply be declined when balances are below zero unless consumers actively ask for the protection.
RED TAPE WRESTLING STRATEGIES
Tell your bank you want to opt out of courtesy overdraft protection. While you’re at it, link your credit card or savings account to your checking account, which will provide you true overdraft protection for pennies on the dollar.
If your balance is low and you are using a debit card, tell the clerk you want to sign the receipt and not enter a PIN, says Gartner payment expert Avivah Litan. Signature-based debit transactions are processed a little bit more slowly than PIN transactions, so you’ll buy yourself a little time to deposit money and cover the withdrawal, she says.
Consumers who think the current system is unfair should write to the Federal Reserve and complain, and write to their congressional representatives asking them to support the "Consumer Overdraft Protection Fair Practices Act" introduced by Maloney.
 

Rx .Junior
Joined
Feb 24, 2005
Messages
2,376
Tokens
ATM Fees
A serious transaction fee of 25 cents I can understand. But $3.00 to $5.00? ATMs save banks money. They don't have to hire a teller (which get paid squat as it is!), and they pay less rent on an ATM than on a bank property. That money is just gravy to them. Now that ATM's are mass-produced, more secure, and the technology is easier than ever, ATM's cost an average of 80% less to maintain than they did just ten years ago! The fees should have gone down not up! This also applies to "online banking," which is even cheaper! Man, you don't even have to have a building at all, just some guy in a computer room making sure the servers stay online. One salary, almost no rent, and you save soooo much! But I guess the old and fat corporate bosses want us to pay dearly for using our "biddily-boop" magic devices to get into their system.




Lets not forget the Bleed the customers acct dry ATM fees..

We all know it often costs money to get your own money at an ATM machine; but now, you might have to pay up when you don’t get money. Let me introduce you to a fee you've probably never heard of -- the "ATM denial fee." Rejection, it turns out, can be costly.

Some banks are sneaky; their ability to slip itsy-bitsy fees onto your monthly statement proves their creativity knows no end. The death-by-a-thousand-cuts draining of our bank accounts happens relentlessly -- $3.00 check enclosure charge; $2 out-of-network withdrawal fee; $10 for dipping below a minimum $1,000 balance for an afternoon; $13 for new checks. One of those fancy free checking accounts can easily cost $50-$100 a year.

But the denial fee is a new entrant into this game, or at least, it is new to me and many industry insiders. Bank of America, on the other hand, says it's old hat. Either way, here's how $1.50 leaked out of my checking account for money I didn't get, and how it might be leaking out of your account too.

Quick: What's your daily ATM withdrawal limit? If you said $400, you might be wrong. At Bank of America, for example, the limit is $300. The price of making that mistake is $1.50. That's what I found out last month when I tried to grab as much cash as I could before I hopped a plane to cover Hurricane Rita in Texas. Given other reporters’ experiences after Katrina, I decided to bring as much cash as possible. The ATM nearest the plane gate wasn't Bank of America, but I decided to pay the $4 or so in fees for using another bank’s machine.

My first attempt to get $400 was denied and my transaction canceled. That's all I knew. I took my card back.

Moments later, I tried to withdraw $300, and was warned I'd face fees both from the machine owner and my bank for using the wrong ATM. Duly censured, I accepted the fee. And that, I thought, was that.

It was, until I spied my bank statement a month later. I found that I was charged $2 for the cash I did get, and another $1.50 for the cash I didn't get. ATM Denial Fee, my statement read.

"What is this?" I asked Bank of America's customer service telephone representative. I did not tell him I was a reporter. I was calling as a customer.

The rep calmly explained that it was, in fact, an ATM Denial Fee. I must not have read the latest disclosure statement from the bank, he said. He then explained that Bank of America is charged fees by other banks when a withdrawal is attempted, whether it is successful or not. This bank-to-bank fee can be $5, $7, or even more, he said. He then explained to me that the bank actually eats close to 90 percent of these fees and is just trying to recoup some of the costs.

To be fair, he agreed to wipe away the $1.50 fee when I told him the circumstances of the failed withdrawal. Still, I hung up wondering just how many people have been unknowingly paying these denial fees. I set out to learn more about them.

'A new one on me'
I called Tony Hayes of Dove Consulting, an ATM expert. He'd never heard of ATM denial fees, and he was skeptical that Bank of America would have to pay the $5-$7 that its customer rep quoted me for a failed withdrawal.

Then I tried Greg McBride of BankRate.com, who studies ATM fees. His oft-cited reports are among the most comprehensive in the industry.

"That's a new one on me," he said.

But Betty Riess of Bank of America knew all about denial fees. In fact, she said, there's nothing new about them. The bank had been charging them "for some time." There was no updated notice earlier this year, she said. She also wouldn't discuss the intra-bank fees my customer service agent mentioned, but she did say she had no idea where he got his facts.

Denial fees are spelled out on Bank of America's Web site.

"The denial fee applies to each request to withdraw funds at a non-Bank of America ATM that is denied because the request exceeds either your available balance or your daily cash limit," the site says. I hadn't read it.

It's unclear how many other banks charge such a fee. Washington Mutual’s Mary Kelley said her bank didn't charge denial fees; A spokesman for Citibank said the bank doesn't charge a denial fee. An Internet search revealed some smaller banks do have denial fees published on their Web sites. Bank of America's $1.50 was the steepest I found, however.

'Wrong ATM' charges cost $4 billion a year
McBride, from BankRate, was surprised to learn of this denial fee, but he did say something that is probably obvious to all of us -- bank ATM fees are at the highest rate ever. In fact, in a report he issued earlier this year, McBride said consumers pay $4 billion each year as a penalty for using the wrong bank's ATM. That's up 44 percent from 1999 levels, his report said.

That's a lot of $1.50 charges. Revenue by 1,000 cuts.

But we’re just trying to run a business, banks protest. In the past, I have heard the following arguments from banks: Consumers have more access to their money than ever before, and should pay a little for that. ATM machines are actually expensive to operate, and most banks lose money on them (see "Are there too many ATMs). And banks face fees from each other, so consumers should expect to cover some of that cost when they use the "wrong ATM."

It all makes some sense, except that last point, which is hard to swallow. Banks may well be charging each other indiscriminate fees, but does that mean they should pass those fees on to us?

'Gotcha' capitalism
This is not a fair market. Consumers paying the fees often don’t have a choice. Often, they are forced to pay the fees when facing some crisis or time crunch, like when I was leaving for the hurricane. That’s no time to change banks.

This is the first example of a phenomenon we’ll discuss a lot in Red Tape Chronicles, something I call “gotcha” capitalism. You’re in a hurry to catch a plane, you don’t have time to refill that rental car tank – “Gotcha!” Suddenly, a gallon of gas costs $6. Oh, and that ATM transaction will cost you $5.50 -- $2 to the machine, $2 to your bank, and another $1.50 for a typo that made you ask for $400 withdrawal instead of $300.

That’s not to say ATM fees are entirely unfair. Consumers shouldn’t expect to receive something for nothing. The convenience of getting cash from any bank’s machines is worth something. But when banks are charging something for nothing, then we know something is wrong.
 

Rx .Junior
Joined
Feb 24, 2005
Messages
2,376
Tokens
and lets not forget My favorite... The Check Cashing Fee...

You Bank at a Credit Union with 1 branch..Get a check from Wells Fargo, go into Wells Fargo to Cash it because 1.its drawn and originates from that bank 2.its closer than your local bank...

GUESS WHAT???

EIGHT DOLLARS PLEASE!!!


but its from your bank..

Im sorry sir but you can open up an acct with us...

FUCK U..
 

Rx .Junior
Joined
Feb 24, 2005
Messages
2,376
Tokens
And These Motherfucking PUKES want a free Handout... SUCK MY BALLS!!
 

New member
Joined
Dec 7, 2005
Messages
6,145
Tokens
Meanwhile the check cashing industry takes all the heat. And their fees are nothing compared to banks.

Banks=license to steal
 

New member
Joined
Sep 21, 2004
Messages
1,103
Tokens
do you remember the bankruptcy laws congressed passed few years ago. the banks promised congress if they pass it, the annual interest rates will drop to the consumers. THAT WAS A FVKIN LIE!!

do you know this bullshit housing foreclosure bill and the presidents hope program is all predicated on IF AND ONLY IF, the lending banks wants to help redo the foreclosed loan. GOOD FVKING LUCK!!!!

shouldnt this bailout should be the last option? where is the feds lowered interest rates? lower it all the way to 0%! is the govt scared the dow will skyrocket, proving their end of the world propagada to be bullsh!t? after the first failed vote the fed injected billions into the market, why not continue???

fvk these banks. they foreclosed on millions of people, now its their turn:youmad:
 

bushman
Joined
Sep 22, 2004
Messages
14,457
Tokens
And once you've rescued those privately owned banks with your hard earned dollars they'll go right back to screwing you up the ass.

Ain't capitalism wonderful.
 

New member
Joined
Jun 2, 2006
Messages
29,253
Tokens
Here's a novel idea Lou.

DON'T BOUNCE A FREAKING CHECK.
 

Banned
Joined
Aug 17, 2008
Messages
5,120
Tokens
The only people that got screwed are the fat lazy and dumb idiots who bought more house than they could afford.

Sweetlou, you have no idea what you are talking about. A free money hand out?
 

New member
Joined
Sep 20, 2004
Messages
5,412
Tokens
And don't forget the mother of all scams -- fractional reserve banking. That's what lets a bank tell you they've got your money when in reality they don't have it. That's ultimately what's behind the current mess.
 

Conservatives, Patriots & Huskies return to glory
Handicapper
Joined
Sep 9, 2005
Messages
87,149
Tokens
In related news, my father in-law knows somebody who's niece's husband's friend thinks bounced check fees will actually be $ 236 someday.
 

New member
Joined
Sep 21, 2004
Messages
929
Tokens
good banks should make money through fees and should not be allowed to lend out money they dont have
 

Rx .Junior
Joined
Feb 24, 2005
Messages
2,376
Tokens
Here's a novel idea Lou.

DON'T BOUNCE A FREAKING CHECK.


Oh MR PERFECT -save your bullshit... Youve never had an Overdraft fee in your life... Oh hail Mr Bill Hill he is perfect... Too bad everyone isnt like Bill Hill.. then NO ONE in the ENTIRE World would have an Overdraft Fee...

tell that to the lady who had 22 overdraft fees who had her debit card stolen..

The thing that irritates me the most is that the Banks dont want to even warn you when you could OD your acct... Banks are against it...

A simple warning would be nice, something like the "foreign ATM $2 fee" warning we are all so familiar with. Something like this:
ATM: "I'll let you take out that $20 you don't really have, but it will cost you an extra $35. Are you sure you want to do that?"
You (turning to friend): Uh, Bill, can you spot me $20?
Implementing such a warning screen is one of the main provisions in Maloney's bill. Of course, banks aren't interested in adding the warning. Nessa Feddis, spokeswoman for the American Bankers Association
 
Last edited:

Rx .Junior
Joined
Feb 24, 2005
Messages
2,376
Tokens
The only people that got screwed are the fat lazy and dumb idiots who bought more house than they could afford.

Sweetlou, you have no idea what you are talking about. A free money hand out?

Thats what it will be in the end.. you are living in La La Land if you think otherwise...
 

Life's a bitch, then you die!
Joined
Jul 10, 2007
Messages
28,910
Tokens
Here's a novel idea Lou.

DON'T BOUNCE A FREAKING CHECK.

That’s difficult to do when your on the dole. I’m mean after you buy the necessities, drugs, booze, and a gold chain there’s not much left. Although I suppose you could always make up the difference by mugging or stealing to make ends meet. It’s a tough world out there. :Carcajada:
 

Rx .Junior
Joined
Feb 24, 2005
Messages
2,376
Tokens
That’s difficult to do when your on the dole. I’m mean after you buy the necessities, drugs, booze, and a gold chain there’s not much left. Although I suppose you could always make up the difference by mugging or stealing to make ends meet. It’s a tough world out there. :Carcajada:
and i GUARANTEE you my friend that Republicans bounce just as many checks as these people... Racist Dave I know those white folk man, Our Prisons are FULL of em..


Racist Daves got some skeletons in his closet...

Its not even about that... Its about Gouging the American Public... 8.00 to cash a check??? 8.00 to use an ATM???
 

New member
Joined
Jul 21, 2006
Messages
12,563
Tokens
theyve been raising those for awhile at least at my bank. 57 though is crazy.

and no i dont know they've raised them because ive had returns, the policy handbook is given out every year and you can see the change.
 

Banned
Joined
Nov 9, 2005
Messages
3,981
Tokens
That’s difficult to do when your on the dole. I’m mean after you buy the necessities, drugs, booze, and a gold chain there’s not much left. Although I suppose you could always make up the difference by mugging or stealing to make ends meet. It’s a tough world out there. :Carcajada:
I's got to get my Malt Liquor and Hennesey!!! :missingteAnd I's got to look good!!:missingte
 

Forum statistics

Threads
1,119,884
Messages
13,574,687
Members
100,882
Latest member
topbettor24
The RX is the sports betting industry's leading information portal for bonuses, picks, and sportsbook reviews. Find the best deals offered by a sportsbook in your state and browse our free picks section.FacebookTwitterInstagramContact Usforum@therx.com