It seems there’s just no end to the the big bank’s greed and when a bank imposes fees that overdraw an account, I personally feel the need to say something. As an MBA, a corporate officer for a large company, and a self-professed capitalist, I understand a bank’s need to cover its costs. I “get it” when a bank has to charge a fee to customers who overdraw their account or exceed their credit limit. But when a bank imposes a “low balance” fee on an account and overdraws it as a result … and then charges a fee for being overdrawn every day for two weeks … something just isn’t right.
I worked for a big bank
Many people don’t know this about me, but I used to work for a large bank in the collections department. It was a soul-sucking job that forced me to cultivate my cynical side and made me realize that people just don’t realize what they’re agreeing to when they sign some papers at a bank. NOTHING you sign at a bank is designed to protect you or your interests. EVERYTHING you sign is designed to protect the bank and its interests.
You can “bank” on it.
So, I read with a lot of interest about an 18 year old whose mother tried to teach him about banking and he wound up learning that lesson the hard way. He only had $4.85 in his savings account but the bank saw fit to hit him with a $9.95 fee for having a low balance … which overdrew his account. The bank then found it necessary to charge him an additional $28 per day to teach him a lesson. He found out about it when the account was in the negative to the tune of $229.10. When he and his mother went to the local branch to close the account, they were told they had to bring the account current first. You can read the whole story here.
Fine print is the problem
Should the family in the story have read all the fine print? Of course. Should they have realized that having a low balance would trigger a fee? No question. The real question in my mind is:
Should the bank have had such a ridiculous policy in the first place?
I understand a company’s need to design policies that protect its interests. I get it, really. But when those policies go beyond protecting a company’s interests and actually do harm to an individual, those policies need to change.
This is one reason why I promote PerkStreet, ING Direct, and Ally Bank. Are any of these three banks perfect? No, of course not, but they all three have a much stronger slant (in my opinion anyway) toward the customer. If you want to check them out individually, you can do so here: