Monday, August 10, 2009

Banks earning big bank on overdraft fees

This one is near and dear to my heart.
US banks are set to earn a record 38.5 billion dollars this year from overdraft fees charged to customers whose spending has exceeded their bank balance, the Financial Times reported on Monday.

Citing a study by research company Moebs Services, the British newspaper said the fees were mostly collected from poorer customers who are struggling to make ends meet in the midst of a global economic crisis.
A few months ago, a computer error by our bank (which is one of the banks listed in the article) had deducted a large payment (our mortgage payment) from our checking account--twice. The result was that almost one thousand dollars in other payments, like our electrical bill, gas bill and our car insurance bill bounced and we were assessed late fees by the electrict company, gas company, etc., in addition to nearly $300 in overdraft fees--through no fault of our own. It took over a week to correct the error, but the fallout continued.

Now our electric company wants us to pay a "security" deposit of nearly $200 in case our payment bounces again. We have to pay our water bill in cash and or certified check.

The inconvenience of the bank overdraft fees was one thing, but the fallout is another and there is little recourse.

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