Banks: "Protection" Racket? (hidden fees)

[UpInArms]

http://www.businessweek.com/magazine/content/05_18/b3931085_mz020.htm

As overdraft and other fees become huge profit sources for banks, critics see abuses

Chris Keeley went on a shopping spree last Christmas Eve, buying $230 in gifts with his debit card. But the New York University student's holiday mood soured a few days later when he received a notice from Pittsburgh's PNC Bank that he had overdrawn the funds in his checking account. While PNC allowed each of his seven transactions to go through, it charged him $31 a pop -- or a hefty $217 in fees for his $230 worth of purchases.

Keeley, who insists he had never requested any so-called overdraft protection on his account, says he wishes the bank had simply rejected the transactions. He would have preferred to pay with his credit card or simply put the items back on the shelf. "I can't help but think they wanted me to keep spending money so they could collect these fees," he fumes. "Thirty-one dollars for each purchase seems excessive." PNC says it doesn't discuss individual customers. The bank insists it's doing a service by covering checks and purchases that would otherwise bounce. "It helps our customers avoid the embarrassment of having a transaction rejected," says Dan Tuccillo, senior vice-president for product marketing at PNC. As for the fees, Tuccillo says they aren't unreasonable "given all the free services we offer to customers. I think we offer a lot of value." Later, the bank halved Keeley's overdraft charges.

Keeley's experience is becoming commonplace as more banks turn to service fees to maintain their profits as the mortgage boom subsides. Overall, banks raked in $32 billion in account service fees last year, up from $21 billion in 1999, according to SNL Financial, a Charlottesville (Va.) research firm. At some, fees have become such a powerful source of profits that they exceed earnings from mortgages, credit cards, and all other lending combined. At TCF Financial Corp. (TCB ) in Wayzata, Minn., for example, such fees represented 76% of profits in 2004, up from 52% in 2000.

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[Rebellious Republican]

1. I learned a long time ago about these fees, there is a way around

them. Usually a debit card is also a credit card. When you make a purchase always tell the clerk CREDIT not DEBIT.

Or if you slide your card through the machine at the counter it prompts Credit or Debit, select credit. Now here is where they pull a fast one, it will still ask you for your pen number!

DO NOT enter your pen number, hit clear then enter! If you enter your pen number it will still go through as a debit.

When using a credit card you do not have a pen number!

Here is another scam that they have for when you make an ATM withdraw.

If you use a machine that does not belong to your bank there is usually a transaction fee, most places charge $1.50 to $2.50.

What my bank does is also charges me a fee on their end as well.

So a $20.00 withdraw can cost me as much as $5.00, consumer beware!

[4dsc]

2. Until the people take back government

this kind of horse shit occur again and again.. Its time we have candidate and a party platform that are on the side of the majority. Until then, we will continue to be ripped off like this..

[dkofos]

3. try the local Credit Union

I haven't dealt with a bank for over 20 years.
I joined the local credit union.

[amber dog democrat]

4. Same here. Credit Unions are a friendlier alternative

I have not used a bank for 20 years. If I keep my balance above 500.00 there are no fees at all.
On the debit card, I just use it like cash. I am using a credit card that will give me a Southwest Airlines ticket after so many thousands of dollars of transactions ...but I never carry a balance either. If we don't have the funds, we don't buy it.

Banks are evil. Tread softly around them.

[radwriter0555]

5. Absolutely. Credit Unions are the only way around the commercial bank

theft that is the scourge of modern day America.

Commercial banks offer absolutely NOTHING other than loot and pillage and destruction of your credit rating.

At my credit union, if I am late on a credit card payment (12% interest) Lydia calls me personally and asks if she can transfer some money to get it caught up. ("Hi Rad, how are you today? Can I transfer some from your share draft to get this caught up?) I usually just pay the whole balance, I love em so much.

When I call them, a live human answers the phone. Same gal on the recording, who's been there for 23 years.

When my dog had to have emergency surgery ($3,000 worth) I called them from the parking lot of the vet's clinic and got a loan in less than 5 minutes to cover it. I was able to write the check for the deposit and the loan funded the next day.

And my credit rating isn't perfect... it's about 670... so, bless their hearts. And I love my 3.9% car loan too. On the spot, no questions asked.

Credit unions RULE.

[NorthernSpy]

6. usury is burying this country

I say credit union, or just keep it in the mattress.