3 On Your Side: Government Investigating Costly Bank Fees
By Jim Donovan
PHILADELPHIA (CBS) – The government’s new consumer watchdog agency is launching an investigation into costly overdraft fees charged by big banks.
As 3 On Your Side consumer reporter Jim Donovan tells us, the investigation could result in new rules or even lawsuits if banks are accused of violating consumer laws.
In this latest attack on big banks, the Consumer Financial Protection Bureau said today that it will ask banks for information about how overdraft fees affect consumers, how overdraft protection is marketed and what information consumers receive.
Every time you turn around it seems banks are charging more fees.
John Lee was a Bank of America customer since college, but he closed his accounts after he noticed fees piling up on his statement.
“A fee if you don’t have a certain amount of money in the bank, a fee for overdraft protection,” said Lee.
Alex Matjanec, with MyBankTracker.com, watches banking trends. He says banks are now raising fees on everything from wire transfers to new checks and making the charges harder to avoid.
“Monthly minimum balances needed to avoid those fees are going from $1500 to $6000 dollars,” said Matjanec.
A study of the ten biggest banks found 49 different checking account fees. Matjanec says banks are now designing new charges for optional conveniences, like mobile check deposits or a fee to escape a bank’s automated phone system and connect with a human.
“Consumers need to start to weigh the balance between convenience and fees and what’s more important to them,” said Matjanec.
And knowing when those fees can be triggered is important.
For instance, some banks use a practice known as re-ordering.
Instead of checks clearing your account in the order that they’re received, the banks wait until the end of the day, and then apply them in order based on the amount, from largest to smallest. And that could increase the number of overdrafts on your account, allowing them to charge you even more in fees.