I have read hundreds of posts on this website regarding banking fee ripoffs. Most of this is due to selective transaction processing by banks to maximize their fee income.in my opinion the banks are "running amuck" with this income generating tool. Whether trying to make up for poor management, poor business models or otherwise poor decisions such as "free checking" they are blatently ripping off the consumer nationwide.
This problem began with moderate ATM transaction fees at non bank ATMs (ATMs not owned by your bank) which rapidly grew to over $1.00 per transaction in some instances. The banks "justified" this by stating the transaction processing via the phone lines and electronic system was expensive - I refuse to believe this was the case.
Once the banks realized they were making good income from this fee they began to tack on debit transaction fees in many cases. Encouraging consumers to use first check cards, then debit cards, then placing the Visa/MC logo on these cards to mimick an actual credit card - increasing the use by the "vanity" of the consumer who wanted to be seen with a credit card - but also tacking on an average $. 25 fee in many cases.
To further expand their income banks became creative with overdraft and NSF fees. Until a decade ago if a check was written that exceeded your available balance one of several things might have occurred: 1. The bank might pay the check and waive the fee in the case of good customers and in the interest of customer relations; 2. The bank might pay the check and charge a small fee (then around $10-15, notify you and ask you to make it good within a certain time frame); 3. The bank might transfer money from another deposit account (savings) and pay the check; 4. The bank would return the check unpaid.
With the advent of Check 21 (Electronic presentment) which sped up the ACH process banks quickly realized the potential for fee income and became very creative in manipulation of deposit/credit processing to maximize fee income. A simple web search noted several industry related websites with information such as this:
"Sheshunoff Management Services Inc., a bank consulting firm based in Austin, Texas, estimates that financial institutions collected $22 billion in overdraft fees in 2003. Annually, it amounts to about 2.9% of non-interest income, according to a 2003 report by Celent Communications, a Boston-based financial services research and consulting company.industrywide, NSF-related fees can amount to up to 50% of total consumer checking account revenue."
People are human, make mistakes and should not be forced into virtual financial insolvency so the bank can maximize fees. The advent of widespread use of the debit card is largely responsible. Rarely do you see someone using a debit card also take out a checkbook register and enter the amount spent (not to mention most of us forget about the transaction fee). When people actually wrote checks it was something you almost always witnessed. Additionally when banks became "cheap" and began "safekeeping" checks for us it became more difficult for some to balance a checkbook without the physical checks being returned to them. Have you ever tried to get a copy of a check the bank has had in "safekeeping". It is sometimes difficult and more often than not you receive a copy of a microfiched check that is unreadable and unsuitable for your purposes.
I am not only ranting - my purpose for this post - WE SHOULD NOT STAND FOR THIS ANY LONGER! There are thousands of readers/posters to this board. If we all begin taking the time to write or email congressional representatives, perhaps there is a slim chance they will take note and do something about this. I encourage everyone to obtain the address of your Senators and representatives and write email or a physical letter complaining about the banking system "ripping us off".
The majority of their billions of dollars of nsf/overdraft fee income comes from their creative posting of transactions and affects chiefly the low to mid income Americans who can least afford it.
If it is truly "Goverment of the people, for the people and by the people" we should be able to make a difference. Often we sit by and watch big business run roughshod over us as citizens and complacently decide there is "nothing we can do as the little guy". I don't believe this to be the case.
Please, everyone, email or write your representatives about this ripoff. We have to show them "We are mad as hell, and we aren't going to take this anymore"
Aafes
Viernheim
Europe
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