Contrary to what they say - banks still gouge customers
Intentionally long and confusing disclosure notices obfuscate bank fees
U.S. banks are still finding lots of ways to burden their customers with
hidden fees. According to the Pew Charitable trusts, overly complicated
letters of disclosure purposely confuse bank customers, cleverly hiding
phony fees. Many customers unaccustomed to such working just throw up
their hands and just hope for the best - and therefore losing money in
According to the Pew Charitable trusts, overly complicated letters of disclosure purposely confuse bank customers, cleverly hiding phony fees.
However -- Spokesperson for the American Bankers Association Nessa Feddis questions the findings and conclusions. "They seem to be saying that they don't have much confidence in American consumers or their choices," Feddis said.
Among the most salient conclusion made in the report -
-- The majority of financial institutions don't summarize important policies and fee information in a concise and easy-to-understand format that allows customers to compare account terms and conditions.
-- The average length of a checking account disclosure is 69 pages, 31 pages at the credit union. Is shorter necessarily better?
"Although shorter, credit union disclosures often do not include information that would allow a customer to compare account fees, terms, and conditions," the report says.
Most significantly, there are no consistent names for the same exact fee. Pew researchers found credit unions had eight different names for "overdraft penalty fee," while banks used five different names for "extended overdraft penalty fee." This several different names make it difficult to comparison shop for a checking account.
-- Financial institutions do not provide account holders with clear and comprehensive information about overdraft options and their costs.
Banks and credit unions typically let customers choose from three overdraft options: You can decide not to opt in; You can agree to an "overdraft penalty plan" that lets you overdraw and pay a sizeable fee (median fee is $35 for banks, $25 for credit unions); or you can set-up an "overdraft transfer plan" that will move money into your checking account from a savings account - at a much lower cost - to prevent an overdraft.
Pew notes that banks and credit unions are not required to provide complete information about the various services available and as a result, may not learn about lower-cost options.
© 2012, Catholic Online. Distributed by NEWS CONSORTIUM.
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Pope Benedict XVI's Prayer Intentions for January 2013
General Intention: The Faith of Christians. That in this Year of Faith Christians may deepen their knowledge of the mystery of Christ and witness joyfully to the gift of faith in him.
Missionary Intention: Middle Eastern Christians. That the Christian communities of the Middle East, often discriminated against, may receive from the Holy Spirit the strength of fidelity and perseverance.
Keywords: Banks, hidden fee, s contrcts, credit unions
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