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Entries in Bank Fees (13)

Monday
Oct082012

Walmart, Amex Roll Out New Prepaid Card

Bluebird by American Express and Walmart(NEW YORK) -- Walmart and American Express announced Monday morning that they would make available a refillable prepaid card for consumers tired of banking fees.

The company said the card is an “alternative to debit and checking accounts” and will be available next week online or in more than 4,000 Walmart stores. There is no fee to set up the card online at Bluebird.com but there is a $5 fee for an account set up kit at Walmart stores with any amount between $1 and $500 for immediate use.

Gerri Detweiler, credit card expert from Credit.com, said the card combines the appeal of the American Express brand, “which is generally seen as an upscale card,” and the wide distribution available through Walmart.

“Prepaid cards have been trying to establish themselves as a smart alternative to increasingly expensive bank accounts and this program may help them do that,” Detweiler said.

Banks’ overdraft fee revenue increased 2.1 percent to $31.5 billion in the last fiscal year, according to financial data firm Moebs Services. The median overdraft fee rose to $29 from $28 the prior year.

Bluebird does not require a credit check but only adults 18 and older can sign up for a card.

There are no monthly or annual fees. There is, however, a $2 fee for a deposit from a debit card. Users can also access money through 22,000 MoneyPass ATMs across the country for free; otherwise,  there is a $2 fee for using other network ATMs; third-party network fees may apply.

Detweiler said the fees on this card are “very low,” which will be appealing for those tired of bank overdraft fees, online shopping or someone who wants to better manage their budget.

It is likely Walmart and American Express would make revenue from swipe fees if a consumer uses the card at a retailer, she said.

The card’s benefits include fraud protection in case it is lost or stolen in which case the card can be replaced at no charge.

Copyright 2012 ABC News Radio

Friday
Jun082012

Top Three Tips for Checking Fee Safety

Hemera/Thinkstock(NEW YORK) -- If you have a checking account with a bank or credit union, do you know what the policies are on fees and overdrafts?

Probably not.

“Consumers are expected to wade through long, confusing documents and may be subject to steep, unexpected fees to access their own checking accounts,” said Susan Weinstock, director of the Pew Safe Checking in the Electronic Age Project.

“Our latest research shows that the median length of disclosures for a checking account is 69 pages long,” she added.

The forms are full of fine print and hard-to-read legalese, causing many people to disregard them.

“We asked people so what do you do with those papers that the bank gave you when you opened a checking account, and they said we put it in a drawer and filed it away,” Weinstock said.  “Nobody read these things.”

A new report called “Still Risky: An Update on the Safety and Transparency of Checking Accounts” finds some fees have increased, and that there’s been little improvement on disclosures to consumers since the last report in 2010.

Pew found that policies and fee information are not summarized in a uniform, concise and easy-to-understand format.

“What we found is that consumers really need a disclosure box,” Weinstock told ABC News.  “What we are pushing is like a nutrition label.”  

This would make it much easier for consumers to compare their banks’ checking and overdraft policies with other firms.

“You’d be able to look at accounts beyond banks and within banks, and decide this is the account that best meets my needs based on the terms the conditions and fees that suit you,” Weinstock said.

“Seven banks have adopted the box,” she said.  “Two of the biggest are Chase and TD Bank and we’ve had two of the three biggest credit unions -- Pentagon Federal and North Carolina State Employees Credit Union.”

Here are ABC News’ checking tips for consumers:

1. Learn what checking fees your bank charges by doing some research.


Pew measured the transparency of the 12 biggest U.S. banks by deposit volume and found that some checking information was not disclosed in writing by banks or on their websites.  For example, information about extended overdraft penalty fees were not obtainable  from Wells Fargo, Citibank, HSBC Bank, Regions Bank and Capital One.

2. Beware of transaction reordering.


Many banks reserve the right to change their posting order at their discretion, posting withdrawals before deposits in customer accounts and thereby increasing the likelihood of greater overdraft charges.  However, four banks in Pew’s report -- BB&T, Chase, Citibank and Wells Fargo -- disclosed that they post either chronologically or in low-to-high order for at least some types of debits.

3. Know that protective regulation may be coming, but it’s not here yet.

The Consumer Financial Protection Bureau opened a request for information on banks’ overdraft practices in February 2012.  Weinstock said Pew is planning to submit its checking safety report this month before the Consumer Financial Protection Bureau stops receiving comments from the public by the end of this month.

Copyright 2012 ABC News Radio

Thursday
May312012

Banks Hit You with Fees Even on the Way Out

Ryan McVay/Photodisc/Thinkstock(NEW YORK) -- Closing a bank account involves more than just signing on the dotted line and saying good-bye.  It also means reaching into your pocketbook if your money is in one of the country’s 10 largest banks.

In a survey of the top 10 banks -- Bank of America, BB&T, Chase, Citibank, HSBC, PNC, SunTrust, TD Bank, US Bank and Wells Fargo -- Consumers Union staff attorney Suzanne Martindale said, “Banks have added all sorts of fees on basic checking accounts, which has raised alarm bells.  But when you hit (the) breaking point and want to move your money, guess what you encounter: more fees.”

All told, customers could wind up spending a maximum of $55 after various fees are factored in.

You can basically forget about your bank making a free same-day electronic transfer.  Those transfers to your new bank can cost as much as $30.  Even getting a certified check may set you back $10.

There are also penalties to contend with such as paying $25 if accounts you want to close have been open for under 90 days or less than 180 days, depending on where you bank.

The hassles don’t even include the delays people encounter when they open new accounts, which can run from a couple of days to two weeks due to paperwork.

Consumers Union also says that re-routing automatic payments and direct deposits into a new account can take up to six weeks in some cases. 

Copyright 2012 ABC News Radio

Thursday
Apr262012

‘Lifetime’ Free Checking Promotion Expired...'But I Haven't,' Man Says

Jin Lee/Bloomberg via Getty Images(SAN FRANCISCO) -- A California artist has won his fight against Bank of America to honor a lifetime of free checking that he signed up for in 1971.

Robert Whitten, 57, lives in San Francisco now but grew up in Arlington, Va. When he was 17 years old, he heard that a new branch of the Virginia Commonwealth Bank was offering a lifetime of free checking for new customers.

Whitten’s young friends were unimpressed but he figured it would last him a long time and he signed up.

“I went in there and it surprised them that I was interested in a checking account,” he told ABC News.

He signed up in 1971 and for the next 40 years, he enjoyed free checking and no minimum balance. His original bank was swallowed up by another bank and that bank was swallowed by another. This happened several times until Nation’s Bank finally merged with Bank of America.

Then last fall, Whitten noticed he was being charged a service fee.

“I had the account from then until now and I discovered one day that they were taking $14 a month out of it,” he said. “I assumed I had had free checking for life and that meant life.”

When he called Bank of America, he said he was told the promotion had expired.

“And I said, ‘But I haven’t,’” Whitten said. “I’ve been married since 1983. I don’t turn to my wife every morning and say, ‘By the way, are we still married?’ We took a vow.”

Whitten believed the bank needed to honor its word. He contacted ABC News’ San Francisco affiliate KGO-TV and told them his story.

“The next day, [Bank of America] called and said, ‘I guess you’re right. You have free checking for life,’” he said.

Bank of America did not immediately respond to requests for comment from ABC News, but told KGO-TV in a statement, “We typically honor legacy free checking account agreements, as we have done in this case.”

Whitten received a $168 refund for charges and the bank placed a permanent fee waiver on his account.

“I already spent the service fees,” he said with a laugh. Whitten said he spent some of the money on medical marijuana. “I’m glad Bank of America was so nice to me.”

Copyright 2012 ABC News Radio

Thursday
Mar012012

Checking Fees at the 10 Largest Banks

Scott Eells/Bloomberg via Getty Images(NEW YORK) -- Is free checking going to be a thing of the past? Since the beginning of last year Bank of America has been testing different options for new customers who open checking accounts in Arizona, Georgia and Massachusetts.

Branches in those states are now experimenting with monthly fees of $6 to $9 for an “Essentials” account, according to The Wall Street Journal.

There are other account charges in those states that range from $9 to $25, the paper reported, but customers have the ability to get the charges waived if they use a credit card, take a mortgage with the bank or meet minimum balance requirements.

Bank of America says it continues to learn from its tests and has not made any decisions about whether to change fees on new accounts more widely.

ABC News has compiled a list of the 10 largest banks and how much each is charging for basic checking accounts and the debit cards that accompany them.

1. Bank of America

Checking: $25 deposit to open; $8.95 monthly fee unless statements are paperless and deposits/withdrawals are done online or by ATM.

Debit Card: Included with all checking accounts (no additional fees).

2. Wells Fargo

Checking: $100 deposit to open; $5 monthly fee unless direct deposit or average balance of $1,500.

Debit Card: Included with all checking accounts (no additional fees).

3. JPMorgan Chase

Checking: $25 deposit to open; $12 monthly fee unless direct deposit of at least $500, minimum balance of $1,500 or $5,000 average daily balance in linked accounts.

Debit Card: Included with all checking accounts (no additional fees).

4. Citigroup

Checking: $0 to open; $10 monthly fee unless balance of at least $1,500 in prior month or one direct deposit and one bill payment each month.

Debit Card: Included with all checking accounts (no additional fees).

5. US Bank

Checking: $50 to open; $6.95 monthly fee with online statements or $8.95 with paper statements unless direct deposits of at least $500 or average account balance of $1,500.

Debit Card: Included with all checking accounts (no additional fees).

6. PNC

Checking: $25 to open; no monthly fee.

Debit Card: Included with all checking accounts (no additional fees).

7. TD Bank

Checking: $0 to open; $2.99 monthly fee with online statements or $3.99 monthly fee with paper statements.

Debit Card: Included with all checking accounts (no additional fees).

8. Capital One

Checking: $50 to open; $8.95 monthly fee unless $300 minimum daily balance or monthly direct deposit of at least $250.

Debit Card: Included with all checking accounts (no additional fees).

9. SunTrust

Checking: $100 to open; $7 monthly fee unless minimum balance of $500 or direct deposit.

Debit Card: Included with all checking accounts (no additional fees).

10. BB&T

Checking: $50 to open; $10 monthly fee unless direct deposit of at least $100, $1,500 average balance or a mortgage with BB&T.

Debit Card: Included with all checking accounts (no additional fees).

Copyright 2012 ABC News Radio

Tuesday
Feb282012

Banks Lose Customer Loyalty, Survey Finds

Ryan McVay/Photodisc/Thinkstock(WESTLAKE VILLAGE, Calif.) -- Americans don't feel that banks are particularly loyal to them so why should they feel the need to stick with their banks?

A new J.D. Power and Associates survey finds that more customers switched allegiances last year, with 9.6 percent admitting that they opened an account at another bank in 2011.  In 2010, the number of bank-changers was 8.7 percent.

The survey reveals that a third of those who leave their banks cite higher fees as the reason they made the switch.

J.D. Power official Michael Beird remarks, "When banks announce the implementation of new fees, public reaction can be quite volatile and result in customers voting with their feet."

The winners in all this appear to be smaller banks and credit unions.  Their customer base grew by 10.3 percent in 2011, a whopping 2.2 percent increase in new accounts from last year.

A big reason why people decided to leave their old institutions was last November's Bank Transfer Day, a grassroots movement to protest Bank of America's decision to charge some customers $5 a month to use their debit cards.  The bank has since rescinded that policy change.

Copyright 2012 ABC News Radio

Tuesday
Nov082011

Customers Turning to Wal-Mart to Cash Checks

Photo by Justin Sullivan/Getty Images(NEW YORK) -- Dissatisfied customers are dumping their bank accounts and increasingly using Wal-Mart to cash paychecks, according to the New York Times. Wal-Mart offers a $3 flat fee, which often works out to be less than the cost of going to other check–cashing stores that keep a percentage of the check.

At Wal-Mart, customers can cash work and government checks, wire money overseas, pay bills or load money to a prepaid debit card. Wal-Mart did not go through with plans to obtain a federal bank charter four years go, amid opposition from the banking industry.

They feared that the huge retailer would drive smaller banks out of business, and it turns out their concerns were justified. Wal-Mart has become very attractive to the so-called “unbanked.” Wal-Mart has also attracted cash-poor customers who have never had a bank account, and would also find their services significantly more affordable.

Wal-Mart says it has no intention of reviving plans to become a full-blown bank, although it has obtained bank charters in Mexico and Canada, leading some bankers to question their motives.

Copyright 2011 ABC News Radio

Thursday
Nov032011

Easy-to-Read Bank Fees? Democratic Senators Seek More Transparency

Jin Lee/Bloomberg via Getty Images(WASHINGTON) -- Following last week’s cancellation of Bank of America’s planned $5 monthly debit card fee, a few Democratic senators Thursday called on all financial institutions to be more transparent, making it easier for customers to read the fine print.

Sens. Dick Durbin, D-Ill., and Jack Reed, D-R.I., called on national financial institutions to voluntarily adopt and post publicly for each bank account a clear "fee disclosure box” -- an easy-to-read form so that people can avoid, or at least know about, fine-print fees like those cancelled by Bank of America.

“We want to inform and empower consumers all across America,” Durbin said.

According to the Pew Charitable Trusts, nine in 10 Americans have checking accounts, making it the most widely used financial product. And yet, Pew found in October 2010 that the average checking account disclosure document from the 10 largest banks in the United States was 1,100 pages.

That is something that senators want to change.

As proposed by the senators Thursday, there would be a single, consistent form that all banks and financial institutions could use to lay out more clearly the fees and key terms associated with their checking accounts.

Both Durbin and Reed stressed the importance of having informed financial consumers.

“Empower the consumers. Give them knowledge and they will protect themselves and make the market stronger and better for all,” Reed said.

As of Thursday, two of the three largest credit unions, Pentagon Federal Credit Union and the North Carolina State Employees Credit Union, have posted the disclosure form on their websites.

Although Durbin and Reed would like to see banks use the form voluntarily, they have sent a letter to Raj Date, the acting director of the Consumer Financial Protection Bureau (CFPD), asking that it require financial institutions to post the disclosure box on their websites.

Similar to the push by the White House recently, the senators Thursday also once again pushed for the confirmation of Richard Cordray to head the new bureau.

“It would function more effectively if it had a confirmed director like Richard Cordray, who is superbly qualified,” Reed said. “That’s who we need to run this organization. The faster he’s in place the better off we’ll all be.”

Copyright 2011 ABC News Radio

Tuesday
Oct182011

‘Bank Transfer Day’ Gains Momentum on Facebook

Goodshoot/Thinkstock(LOS ANGELES) -- In about 18 days, more than 50,000 people plan to send a message to banks: Goodbye.

In an event titled “Bank Transfer Day,” thousands are signing up to leave large banks in favor of credit unions on or before Saturday, Nov. 5, over what some call unethical practices.

“If you don’t believe in a company’s practices or feel that a company’s practices are unethical, then, very simply, you should not have money with that company,” the 27-year-old creator of the event, Kristen Christian, told KTLA Live.

“I was tired of paying outrageous fees to banks for a severe lack of services. I was tired of having my money access determined by a corporation and the final straw because I was tired of banks targeting the impoverished and working class,” she said.

In addition to the 51,000-and-counting RSVPs for “Bank Transfer Day,” a cause page for the event has amassed more than 15,000 likes, and the group’s Twitter page now exceeds 600 followers.

The group’s mission, according to the public Facebook invite: "Together we can ensure that these banking institutions will ALWAYS remember the 5th of November!! If the 99% removes our funds from the major banking institutions to non-profit credit unions on or by this date, we will send a clear message to the 1% that conscious consumers won’t support companies with unethical business practices.”

In recent weeks, banks have drawn fire over fee hikes. A petition titled "Tell Bank of America: No $5 Debit Card Fees” has gained popularity, with more than 130,000 signatures.

Now, "Bank Transfer Day" may be gaining even more steam. The group’s attendees are active and vocal on the events page, sharing their stories of change with the public.

One person wrote, “I just opened a new account with a local bank with online checking, they’ll pay the atm fee of other banks and as long as I make 10 transactions a month with my card it’s free. Goodbye Bank of America, it was a fun 20 years.”

To help its attendees find a new banking institution, the event page, created by Christian, includes links to help find a credit union in the United States, Canada and the United Kingdom.

The banking options proposed by the Facebook event:

  • Research your local credit union options
  • Open an account with the one that best suits your needs
  • Cancel all automatic withdrawals & deposits
  • Transfer your funds to the new account
  • Follow your bank’s procedures to close your account before 11/05

The big banks have said they are simply trying to recoup their costs from new regulations, and many good deals are still out there.

Copyright 2011 ABC News Radio

Wednesday
Oct052011

BofA CEO Denies Site Hacking; Says $5 Fee Will Provide 'Great Service'

Andrew Harrer/Bloomberg via Getty Images(NEW YORK) -- In an interview, Bank of America CEO Brian Moynihan addressed concerns that the Bank of America website had been hacked, as well as the outrage over its announced $5 monthly debit card purchase fee.

ABC News asked Moynihan about the bank’s website issues, which has slowed customer access sporadically for the sixth consecutive day.

“It’s all volume related,” Moynihan said, due to “millions of logins” a day.

Bank officials had earlier insisted to ABC News that the disruptions were not volume related.

“Basically we had a normal day today,” he said, denying malware and denial of service attacks.

When asked if Bank of America needs to charge the $5 debit card fee after making billions in profits last year, Moynihan said the fee “is meant to provide a great service.”

“We provide great services -- 5,700 branches, 18,000 ATMs, online banking phone banking,” Moynihan said. “We believe in clarity, in fairness and transparency to customers. So we’re introducing this fee next year for new customers and beginning to middle of next year for current customers,” Moynihan said.

Moynihan said if customers bring a “total relationship” they can avoid the fee.

And despite outrage from the Senate Floor to Facebook -- and a 135,000 signature petition -- Moynihan inexplicably said that customers seemed satisfied with the fee once “they are informed with what is going on.”

Bank of America says it would waive that fee for those with “Premium” accounts, which require a minimum monthly balance of $5,000.

When asked how Moynihan himself would feel if his bank charged a fee he did not have to previously pay, Moynihan said, “the fee will start next year and it will be fully explained to more customers and as you learn about this you’ll understand that too.”

Copyright 2011 ABC News Radio







ABC News Radio