By John W. Schoen Senior Producer
msnbc.com
updated 2/18/2007 5:02:45 PM ET 2007-02-18T22:02:45
COMMENTARY

This week, Bonnie in Georgia is steamed because her bank charged a fee without telling her about it and wants to know what she can do to get her money back. Deana in Boise is wonder if a 401k retirment plan is still a good bet.

Why am I charged extra for my safe deposit box because I choose not to allow the bank to automatically deduct the box rental from my checking account? … Last year, the bank deducted $35 without my authorization, even after I paid the $45 rental for the year because I choose not to do the automatic deduction from my account. ... What’s the solution?  Where do I go for help with the problem? 
Bonnie C., Rex, Ga.

The reason you're charged these nuisance fees is that, with interest rates low, banks have looked elsewhere for profits — like the blizzard of fees on every transaction they can think of. These fees now create tens of billions of dollars in revenues each year for banks and credit card companies. So much for "free" checking accounts.

It sounds like it’s time to look for another bank — or at least tell them you’re leaving unless they remove the fee. You may find they’ll do this “as a courtesy” if you’re a good customer. These fees are based on the notion that customers like you may steam about them and call customer service, but that you'll ultimately give up when your only recourse to listen to a faceless voice at the other end of a toll-free number recite "bank policy" from a manual.

Fortunately, you don't have to stop there. If you feel you’ve exhausted the option of working with the bank, your next step is to find the consumers affairs agencies in your state that handle banking complaints. In most states, general consumer complaints are handled by a department of the Attorney General’s office, while banking complaints are handled by state bank regulators.

Before actually filing the complaint, try one last call to the bank, telling them you're not giving up and citing the names of the agencies you plan to contact. Be as specific as possible so they know you're serious.

In Georgia, the address of your consumer affairs agency is:

Governor's Office of Consumer Affairs
2 Martin Luther King Jr., Drive SE, Suite 356
Atlanta, Georgia 30334-4600
For more information, check theirr Web site

Your state banking regulator is:

Department of Banking and Finance
2990 Brandywine Road, Suite 200
Atlanta, GA 30341-5565
Web info is here

And here’s the address for federal bank regulators:

Office of the Comptroller of the Currency
Customer Assistance Group
1301 McKinney Street/ Suite 3450
Houston, TX 77010
Web info is here.

If talking to the bank hasn’t worked, give them one more chance to do the right thing: write a letter to the branch manager, saying you’d like 1) to have the matter corrected to your satisfaction or 2) a written reply explaining why they won’t do so — within 10 business days, otherwise you will forward your written complaint to the appropriate consumer affairs agencies. Include the exact name and address of these agencies for your state (you can do this on the Web.)

When you write up your complaint, be as specific as possible — names of people you spoke to, dates, etc. — but don’t overdo it. Brief is better. And skip the attitude: make this all business, not personal.

In your letter, refer to the names and addresses of the agencies you plan to contact, but don’t send copies just yet. You’re giving the bank one more shot at correcting the problem in your favor before you start a trail of paperwork with regulators that the bank will have to deal with. Your hope is that they’ll decide it’s easier (and cheaper) to fix the problem than to deal with the paperwork of responding to a formal, well-targeted consumer complaint. (Once you actually file the complaint, they no longer have a reason to play nice.)

Sometimes the letter itself, worded this way, will shake them loose. If not, you’ve got a written record of the problem, along with their response refusing your request — or no response. All this makes it more likely you’ll get interest from the folks at the consumers affairs agencies. Without written records, it’s “he said, she said” — which makes the job of following up a complaint much more difficult. If the bank refuses to reply in writing, you have additional proof they've been unresponsive to your problem.

You may find out that the bank is within the letter of the law, and knows it, and that filing complaints with the right regulators won’t accomplish anything.

But it’s worth a shot. If everyone did this, banks might think twice about assessing more of these nuisance fees in the first place.

Is a 401-k still a good bet?
Deana B., Boise, Idaho

These employer-sponsored retirement plans (named for the paragraph in the federal law that set them up) are always a good bet, especially when your employer matches your contributions. Those matches are free money. And you can invest without paying taxes on your gains until you withdraw the money for retirement.

The "betting" comes when you try to decide where to invest your 401K. There are still plenty of risky mutual funds and other alternatives available to 401k holders — so just because your savings are in in a 401k doesn't mean you won't lose money.

If you prefer not to take on a lot of risk, you can always invest in bonds or other relatively low-risk investments. The safest is probably a money market mutual fund, but you'll have a hard time getting ahead: these days, these funds barely keep up with inflation. To get higher returns, you’ll have to choose one of stock funds offered by the plan.

For smaller amounts of money, mutual funds are a great way to invest in stocks because they minimize your risk: the fund will spread your money around among a number of stocks, so you don’t have to put all your eggs in a just a few baskets. If you do choose to put some of your savings in stock funds, spread your account among several funds that perform differently in different markets and economic cycles. You’ll hear different suggestions about how to mix it up; Wall St. types came up with the term “asset allocation” to make it sound more complicated than it is. Some of the categories to look at are “growth” or “value” stocks, foreign stocks, domestic bonds, etc. Most of the major fund companies have tons of information on their Web sites about all this.

One of the biggest mistakes many 401K investors make is to set one up and then forget about it. Once you choose a fund, you need to monitor that fund's performance to make sure the folks making investment decisions for you are making good ones. Fund investing creates a risk of its own — call it “management risk.” The risk is that the fund manager does a lousy job and you wind up with less money than the overall market averages.

If one of your funds doesn’t keep up with average performance of other funds in that category, switch to another fund. You don’t need to watch your account daily. Every three months, your fund should provide you with information on how well it did. The information may be buried in a lot of rosy commentary from the fund manager. If you can’t find it, call your 401K administrator and ask. Web sites like Morningstar.com also have this information.

If you don’t feel comfortable choosing a fund — or don’t have the time to research them — you might want to choose an index fund, These just track the stock index you choose. An S&P 500 index fund, for example, buys all the stock in the S&P 500 index. So your account with go up and down along the overall stock market. Since most managers don't beat the index, the odds are you'll beat most funds. Index funds also charge lower management fees because they don't have to pay a lot of people to research stocks and make investment decisions: all they do is buy stocks in the index.

No matter where you invest, you'll still get the two main benefits of 401k that you wouldn't get from conventional savings: the tax advantages (you don't get taxed on investment gains until you withdraw the money, so it grows faster) and that "free" money from your employer.

So max it out, but choose carefully where you put it and keep an eye on it along the way.

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