Customers frustrated with fees giving banks a loan
Posted on: Tue, 12/21/2010 - 05:49
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Customers frustrated with fees giving banks a loan
Charges that give banks a cash advance are irking more customers. In order to get a quick payday out of customers, major banks are stepping up account charges, ATM and overdraft fees. Customers are getting fed up with it.
Anger over giving a cash til payday loan to banks grows
Most American consumers don't think it's fair that a person should have to give a money to a bank to use their own payday cash, as outlined by ABC. By the end of the year, financial institutions will have 80,000 or more complaints still estimates the Office of the Comptroller. Since banks began being monitored, this would be the highest level of satisfaction. They started being monitored 15 years ago. New regulations were passed last year that helped, but it hasn't stopped banks from searching for new methods to extract instant cash from their customers.
Overdrafts causing anger
Overdraft fees are one of the biggest problems consumers are mad about. A lot of larger banks clear large transactions first. The smaller ones come last. Then it is more likely that a few small purchases will all get overdraft fees instead of one large purchase. Then the fees stack up for the consumer. Say a person pays their power bill, buys a pack of gum, a coffee and a sandwich over the course of one day with their debit card, but only has enough money to cover the power bill. The bank makes a habit of clearing largest purchases first. There is a larger purchase to clear too. Following the larger purchase, all the smaller purchases go into overdraft. That means a fee can be charged for each one. This practice makes a lot of fast cash cash for banks.
Check the rate of interest next time
Overdraft fees can be viewed as sort of a cash til payday, as the customer is technically borrowing money and paying a fee for it. That said, a $35 fee on a $1 overdraft, is 3,500 percent in simple interest. In APR it is 1,277,500 %. That is ridiculous.
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Charges that give banks a cash advance are irking more customers. In order to get a quick payday out of customers, major banks are stepping up account charges, ATM and overdraft fees. Customers are getting fed up with it.
Anger over giving a cash til payday loan to banks grows
Most American consumers don't think it's fair that a person should have to give a money to a bank to use their own payday cash, as outlined by ABC. By the end of the year, financial institutions will have 80,000 or more complaints still estimates the Office of the Comptroller. Since banks began being monitored, this would be the highest level of satisfaction. They started being monitored 15 years ago. New regulations were passed last year that helped, but it hasn't stopped banks from searching for new methods to extract instant cash from their customers.
Overdrafts causing anger
Overdraft fees are one of the biggest problems consumers are mad about. A lot of larger banks clear large transactions first. The smaller ones come last. Then it is more likely that a few small purchases will all get overdraft fees instead of one large purchase. Then the fees stack up for the consumer. Say a person pays their power bill, buys a pack of gum, a coffee and a sandwich over the course of one day with their debit card, but only has enough money to cover the power bill. The bank makes a habit of clearing largest purchases first. There is a larger purchase to clear too. Following the larger purchase, all the smaller purchases go into overdraft. That means a fee can be charged for each one. This practice makes a lot of fast cash cash for banks.
Check the rate of interest next time
Overdraft fees can be viewed as sort of a cash til payday, as the customer is technically borrowing money and paying a fee for it. That said, a $35 fee on a $1 overdraft, is 3,500 percent in simple interest. In APR it is 1,277,500 %. That is ridiculous.
Citations
ABC News
abcnews.go.com/Business/wireStory?id=12357543&page=1