News

Sneaky bank fees

Wednesday, January 31, 2007

(New York-WABC, January 30, 2007) (WABC) -- Are they good for the consumer or just good for the bank? We're talking about overdraft fees from ATM transactions.

Consumers say they often have no idea until they open their statement that they are getting socked with fees.

Eyewitness News reporter Jeff Rossen has the story.

You know what they say -- no cash, no problem. That's the beauty of a debit card. The transaction is easy.

But there's an ugly side the banks don't want you to know. They can slap you with fees, as high as $35 dollars.

And that's the problem. Banks automatically enroll you for overdraft protection but still charge you when you overdraft. Yeah, we were confused too.

Eric Halperin, Center for Responsible Lending: "It's a way to generate fee income for the banks pure and simple. We found that it's not in fact a service consumers want. Over 60 percent of consumers said they would want debit card denied even if they were standing in the checkout line."

The Center for Responsible Lending found the average fee is $27.40, that's a record high and a 26 percent increase since 1998.

We checked around:

Citibank, in some cases, charges $30 for each debit overdraft

Chase from $29 to $35

Bank of America from $19 to $35 dollars.

Banks claim they are telling their customers about the penalties.

But Congresswoman Carolyn Maloney says consumers are left in the dark. She is pushing a bill that would require banks to disclose overdraft fees at the time of purchase just as ATMs do, and leave it up to you to go ahead with the purchase and pay the penalty or wait until payday.

"Let the customer decide. It's their money, it's their account. Let the consumer decide whether they want this service," Maloney said.

Get more News »