By Quentin Fottrell
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?