“Yay! I got charged a fee.”
Most of the time, consumers realize most fees charged by businesses or people are unavoidable, and they cough up the dough being demanded without too much of a fuss. However, when it comes to fees charged on their bank accounts, consumers become red in the face and declare that great injustice has been imposed against them.
What is it about bank fees that make consumers so angry, while other fees don’t conjure up the slightest peep? Every day, people shell out their hard-earned dollars to drive on toll roads. When stepping onto a city bus or metro train, passengers pay the fare without thinking twice. And these are public services that are funded by taxpayer money! On the other hand, Bank of America Corp (NYSE:BAC) and Wells Fargo & Co (NYSE:WFC) are private enterprises that provide financial solutions to their customers and reserve the right to charges fees, as long as they are clearly communicated.
Are banks just plain evil?
The cries against account fees have surely intensified because these banking products used to be free. Any time you’re getting something for fee, you are going to be slightly annoyed when you suddenly have to pay up for the same service. However, these banks are not trying to slip fees past customers and deceitfully pick their pockets. Bank of America Corp (NYSE:BAC) clearly states all of the fees associated with its deposit accounts in the product overview section of its website and has a tab dedicated to inform customers which actions can be taken to avoid any fees.
Do these big banks want to annoy customers? No. Despite the obvious missteps most financial institutions took before, during, and after the financial crisis, these institutions are not inherently evil organizations dead-set on wreaking havoc on the American consumer. In many cases, these new fees are a direct response to the changes average Americans demanded. When legislation was passed to limit interchange fees banks collected from merchants, and credit card reform reduced the banks’ ability to reprice risky customers, the banks had billions of dollars in revenue swiftly ripped away while all of the expense infrastructure remained.
How support can backfire
Despite the overwhelming support to pass this legislation that stifled the banks’ options, many of those supporting the change might not have ever even been hit with a punitive fee. The number of people actually hit with an egregious overdraft fee, when a customer draws on an account with insufficient funds, may have been relatively small in the scheme of a particular bank’s customer base. But when those fees went away, banks felt to the pressure to make up that lost revenue elsewhere.