If you saw this line on your online banking statement -- "Service fee: $3 (more info)" -- What would expect to see when you clicked on the hyperlinked words "more info"?
More information, I would suspect. But that's not what you would get.
At Wachovia Bank, clicking on those words doesn't shed any light on the fee. The window that pops up reads merely "Service Fee. Quantity: 1. Total $3."
The other day, colleague Andy Gallagher showed me his fee-laden Wachovia checking account statement, his blood boiling from unintelligible fees. But it was the "more info" thing that really stuck in his craw. You can see why by looking at the graphic below.
"What's this for? I have no idea," he said, pointing to the $3 fee on the screen. Seeing the swelling veins in his neck, I set out to find "more info."
Bank fees are a powerful source of revenue for America's financial institutions, and one of consumers' top headaches. If it feels like the bank fee noose has closed tighter around your neck in recent years, it has. The Federal Deposit Insurance Corp. says the nation's largest banks now generate 44 percent of their revenues from fees. Estimates of how much that amounts to vary between $30 billion and $50 billion a year, but it's clear banks are rolling in money they take from customers, often without explaining themselves very well.
How do banks make all this money? Let me count the ways. A $20 withdrawal from the wrong ATM costs an average of $4 in withdrawal fees. An attempt to withdraw $500 from the wrong ATM can result in a rejection and a $1.50 ATM withdrawal fee. Getting close to an empty account? Don't worry, your bank will automatically provide you with overdraft protection, for $31 an occurrence. BusinessWeek recently told the story of a college student who used a cash card linked to any empty account to purchase seven Christmas gifts for a total of $230, then was hit by $217 in overdraft fees.
Then, there are crazy credit card fees, like the over-limit fee. If you spent a lot on plastic during the holidays and are near your limit, beware: Banks can lower your credit limit, citing a credit risk, and then charge you an over-limit fee.
What the #%$& is this fee for?
Gallagher's fee was much simpler than that. No complicated math involved. Just a $3 fee. But Andy had the same question so many other American consumers find themselves asking every day: What the #%$& is this fee for? The Wachovia Web site provided no answer. Despite its lofty promise, there was no "more info."
But Jim Baum, a Wachovia spokesman, did find "more info" for me. The service fee represents a recurring fee Andy is charged every month for the type of account he has, called a "simplified checking account." Baum recommended that Andy upgrade to another, free account. I said that wasn't the point.
"Why isn't there 'more info' where the site promises 'more info?'" I asked.
Baum had to do more research to answer that. And he did.
The service fee, in this case, really means "regular monthly fee." It turns out some Wachovia account holders are charged multiple monthly recurring fees each month on the same day. When that happens, Wachovia lumps them all together on the same line item on the Web site. Were there one $3 fee and one $4 fee, for example, the statement would show: "Service fee: $7."
The "more info" feature would then list each fee separately, Baum explained. So it might read: "Service fee. Quantity: 1. $3./Service fee. Quantity: 1. $4. Total: $7."
The logic was clear now. But I remained skeptical of the "more info" boast. So I pressed on. I asked Baum why the pop-up box doesn't say something obvious like, "Recurring monthly fee charged to simplified checking account holders?" It could even include a link that said, "Want to get rid of this fee? Here's how."
He told me to make that recommendation to Wachovia's online customer service division, which I did.
David Stone, the bank's director of online customer service, explained that the "more info" system, which was put in place a year ago, was popular with consumers in usability testing. Many had complained about the site's former policy of bundling a series of fees into one line on the statement. But he conceded the link doesn't work well when it only lists one fee. He said the firm might reconsider the "more info" link presentation if more customers complain.
Something is wrong
In the meantime, another Wachovia spokesman, Matt Wadley, pointed out, correctly, that the bank does have a 24-hour hot line customers can call with questions like mine. Gallagher could have called and gotten the same explanation I did, he said.
Wadley also said that statements mailed to consumers the old-fashioned way would provide more details on that $3 monthly service fee. I wasn't able to verify that. Wachovia also told me that Gallagher had been paying that fee for years, dating back to even before Wachovia acquired his account when it purchased CoreState Bank eight years ago. Perhaps he should have remembered what this $3 fee was for.
Those are reasonable points, but I do know this: Any time a bank takes money from your account, it should tell you why as clearly as possible. And any time clicking on a link that says "more info" only brings up another box with the same info you already had, something is wrong.
Have you encountered difficulties tracking down bank fees on your accounts? Feel free to sound off below.
Best reader comments:
I retired from Comerica Bank Detroit and have very good "insider" information on the folks down the hall in a room with a sign on it saying "Danger-Think Tank". These folks stay up all night devising ways to create and sock fees at customers. Comerica earns over 46% of non-interest income from "Fees". If you think the military is bad on the "don't ask-don't tell" policy, banks are 100 times worse. I have advised four of my family members "don't bank there"..they will fee you to death ! Granted, if youmake a mistake and the bank incurrs a cost, the customer should pay for the mistake ..but.. Comerica actually has "data miners" in that dark bleak room Think Tank, searching for customer usage patterns and pricing fees according to statistical analysis or a probable "hit rate". They basically study "human nature" and create and price fees according to how profutable they can be ! OH ... I get free bank services and never have to pay for a screw up on my part ..I know the director of customer service ..were friends and I always get my fees reversed !
-Name purposefully not given ..the Thinkers might read this post !
As we always joked at the credit card bank where I worked in Risk Management: "THE BEST THINGS IN LIFE ARE FEE!"
One time I called Wells Fargo to ask about a service fee. When I got my next statement, it has a $2 "service call" fee for that call I made!
As a former Wachovia employee, I can tell you this. Yes they are quite aware of the money that they are making out of NSF fees, unexplained service fees and ATM fees. Unexplained fees are deliberated because they know that a high percentage of customer wont give it a second glance. They know that a small percentage will complain. However the majority wont and thus thats why do it. Managers have meetings of how much money will be made in NSF's fees. Its in the billions!!! They also have automated phone systems that make it impossible to talk to a live person because again (they know that a large % will give up trying to ask questions). Even their concierge is setup outside on the platform so that way customers will feel embarrassed to ask for NSF refunds. This concierge/manager desk was not created to help customers but rather to make them shy away from requesting refunds. (management explained that to us.) It works effectively. Trust me, I have seen the numbers. Our focus is to get you to start using the debit cards so you can charge up those NSF fees, because the purchases that you make will not show in your account until many days later.
As a former bank employee of UnTrust, I know what it's like to hear the customers complain about the fee's they're being charged. While I haven't personally seen a credit line lowered and then over the limit fees charged, I have seen some pretty shady things happening. At UnTrust they have a policy in place that makes it much easier to overdraw your account, and once that happens, you're basically out of luck. Take for example their item processing order. During their week long training of their own employees they go over in a no less confusing manner the order that they process deposits/withdrawals. First they'll tell us that all items are processed from highest to lowest at the end of the day and not necessarily the order that they came into the bank. Then they'll contradict themselves by saying that all physical checks are processed first followed by ACH debits(electronics checks) and finally ATM/Check Card debits. When a customer would call up to ask how they had overdrawn their account we would tell them the policy of whatever way drew more fees from their account. Take for instance you have $500 in your account. Now you write a $450 check and use your check card in 5 other places for $5-10 each (quick swipes like picking up lunch at McDonald's or something you forgot at the grocery store) then you go to the gas station and swipe your card for a $50 in gas purchase. This is where they get you. At the gas station, they "authorize" only $1 to guarantee that the card is valid. They don't actually process the final amount until a couple days later which then the bank legally has to pay the full amount of whatever they ask. Now the bank gets all of these processing on the same day. They'll process the $450 first, followed by not the smaller items which you used prior to getting gas, but the $50 gas item. Now you have 5 other small items not only overdrawing your account, but charging you $30 per item. Now your $1 gas authorization just cost you and extra $150 in fees and theres nothing you can do or say about it. As a "courtesy" to you they may offer a one-time refund for "one" of the charges, but generally speaking that fee should have been a single overdraft fee of $30. This seems to be a standard pattern with the big 3, UnTrust, Walk-all-over-ya and Bank Against America. I'm now at a Credit Union only and will never even visit another bank again. It was the first time in my life that I really felt dirty working for a company. Being forced to explain their fee's and policy's until confusing the customer enough that they'll let the situation go and forget that we just screwed them out of a couple hundred dollars.
I think if people don't like bank fees they should stop using money they don't have. Plain and simple, don't overdraw your account! From working in a bank and having to use a bank, I know most people being charged fees are the same people that have no idea what's going on with their account, don't balance their checkbook, write bad checks, post date checks, use the ATM balance (like it knows if you're writing checks all over town) and generally spend money they don't have. Then they blame the bank for their posting order of transactions and say it's a conspiracy to steal their money. If you overdraw your account, you are essentially taking a loan from the bank..... you will be charged. Take responsibility for your own actions, grow up and manage your finances.
People need to understand in this day and age that managing your finances and making sure you aren't being taken advantage of takes work, maybe even a few hours a week. Review every charge on every statement that you receive. It is not a fun way to spend time (nor is holding for customer service when you have questions) but it is the reality of living in today's world. Don't expect them to tell you when you could save money by switching to a different account, monthly plan, etc. Check up on all of your services from time-to-time to see if there are better deals available.-Michael, H., Harrison, Ark.