Let the gouging resume
Published 3:30 pm Thursday, July 16, 2009
When a New Hampshire man who used his debit card to buy a pack of cigarettes was charged more than 23 quadrillion dollars, it wasn’t surprising.
Well, for Josh Muszynski it was surprising, to see that $23,148,855,308,184,500 charge when he checked his account online a few hours later.
But even with some crazy charge, a reassuring, ironclad bank-like consistency remains. Right there on the bill, first thing, above the quadrillion dollar charge, is the “$15 overdraft fee.”
Good thing Muszynski checked his account before making another purchase, and then got on the phone, where he stayed for a couple hours, to have the error corrected. Bank of America has raised the maximum number of times customers can get hit with overdraft fees from five a day to 10. It’s also charging a one-time fee of $35 if the account remains in the negative for more than five days. (Industries have embraced “one-time fees” like nobody’s business. There’s a “one-time fee” to cancel cable. That’s genius. So wrong. But genius.)
Three years ago, to attract customers, banks were offering checking accounts without maintenance fees, and dropping fees for using out-of-network ATMs. Now those types of fees are back with a vengeance.
“I think when you look at the whole — all of the fees overall — the landscape has changed and that has meant rising costs for our industry,” Bank of America spokeswoman Anne Pace told the Washington Post. “For the bank to continue to offering competitive products and services, and making sure we are lending responsibly in the current environment, we have to adjust our prices.”
Pace said some changes favor consumers. The bank reduced the overdraft fee to $10 an item if overdrafts in a day total $5 or less. Overdrafts that add up to $5 or less? Has that ever happened?
It is the customer’s responsibility to keep his or her account in order. But banks also used to deny charges if an account didn’t have sufficient funds, rather than making it easier for people to spend what they don’t have.
Overdraft fees are an important source of income for banks. Moebs Services, which provides data to the government, estimates that overdraft revenue will reach $38.5 billion this year. The median overdraft fee will be $27.50, up from $25.
When the banks were bailed out, most people agreed that it was necessary for the economy. So when an American makes a banking error, it would be fair, at least, to not charge him multiple times for an overdraft, if individuals are as important as industries.
