By Quentin Fottrell
- iStockphoto
Consumers are becoming more outraged about the growing list of banking fees that now appear on their monthly statements, but banks contend that there are easy ways to avoid them.
Customers “strongly distrust” the legitimacy of banking fees, with more than 70% saying that bank charges are unfair, according to a new survey. What’s more, 90% of customers believe their bank could have done a better job communicating what fees it charges and how they are incurred, according to the survey of over 500 bank and credit union checking and savings accounts conducted by Russell Herder, a marketing firm based in Minneapolis and Brainerd, Minn.
The survey says customers still don’t understand why they are being charged certain fees. “Banks often times receive negative sentiment due to service charge increases or changes,” says Carol Russell, CEO of Russell Herder. “Because of this, it was important for us to unearth public opinion about how these charges are attained; using this feedback to provide information regarding what financial institutions can do to improve customer loyalty and satisfaction.”
But the industry recommends that customers should be proactive, too, and says most consumers actually don’t pay any fees. Customers – 71% to be exact – are finding ways to avoid paying any fees at all, according to a recent survey by research firm Ipsos Public Affairs of more than 2,000 randomly-selected consumers, conducted last month for the American Bankers Association. Some 11% of consumers spend $3 or less in monthly bank fees for services such as checking account maintenance and ATM access, while 17% spend between $4 and $10 a month, the survey says. (Read our guide on How to Cut Bank Fees.)
“It’s impressive that so many customers avoid paying any bank fees,” said Nessa Feddis, retail banking expert at ABA. “It shows that consumers are savvy and are able to navigate the new banking landscape with skill.”
Consumers should know that bank accounts cost little or nothing for most people,” Feddis says. She says most banks offer free checking and saving accounts – though some require a minimum balance – and free ATM use if you use your own bank’s ATM. Feddis says most checking accounts are free when your paycheck is automatically deposited each month, and advises customers to get an automatic text/email alert when your balance falls below a certain level to help avoid paying overdraft fees.
Pay Dirt readers, what survey most describes your experience?
BofA used to be one of the better run banks. But that was years ago – before Glass-Steagall was repealed. It’s management used to be somewhat decentralized with individual branch managers knowing their customers and making loan decisions (like the small Virginia bank references by the above comment posted by Observateur).
But after Glass-Steagall was repealed the big banks started getting into other lines of buiness. So BofA aquired Countrywide and Merrill Lynch.
In fact, BofA was so anxious to aquire Merrill that it issued a blatently false and misleading proxy statement that failed to disclose Merrill’s $4.5 billion in losses.
And according to the SEC’s Second Amended Complaint against BofA, “In the proxy statement, Bank of America represented that Merrill had agreed not to pay year-end bonuses or other discretionary compensation to its employees and executives prior to the closing of the merger without Bank of America’s consent. In fact, contrary to that representation, Bank of America had already previously agreed that Merrill could pay up to $5.8 billion — nearly twelve percent of the merger consideration as of the time the parties entered into the merger agreement — in discretionary year-end bonuses.”
And so now the big banks claim that they are somehow ENTITLED to their previous level of profits from their banking operations and so their raising debit card fees in unison – in what I believe is a clear violation of the Sherman Antitrust Act (inasmuch as the big banks control over 80% of the debit card market).
This just shows me how lucky I am to have canceled my accounts at BOA (bank of pain), and taken to a Credit Union Institution…….but I’m deeply sorry for the poor people who still are suffering this calvary….but don’t get me wrong, but I think that BOA wants from one way or another retrieve all the losses caused by mismanagement of this lazy lizzards, who bought Countrywide, a company in bankruptcy, and not just that, but also they want to get rid off more than 30.000 employed, wash their hands like Pontius Pilate and atone for their sins , and act like nothing happened.
I use two banks. One is the State Department Federal Credit Union. I have never had a problem with their modest fees, and on at least one occasion when I stumbled into accruing fees they waived them on request. There are reasons credit unions are popular with their members.
My other bank is a local one, operating only in two small areas of Virginia. I can walk in and talk to the bank manager any time I want, and I happen to know the bank president socially. I am a person to them, not just an account.
Anonymous (4:02am) – seriously? You can’t figure out how to get money out that’s not at an ATM? Here’s a hint: walk into your local grocery store, buy groceries, get $50 cash back. It’s not that hard. If a bank tries to charge me a fee (and I can’t avoid it), I’m taking my business elsewhere…
Citi kept charging a monthly fee because I don’t have a direct deposit paycheck. So I took my account to USAA, along with my $250,000 retirement account.