‘Gotcha’ Fees Force Customers to Quit Banks

Publication: Time

Author: Martha C. White


10/21/2011 - Hidden bank fees are pushing the working poor out of mainstream banking and into riskier, more expensive alternatives to managing their personal finances. A new study released by the Pew Charitable Trusts provides a stark snapshot of how banks’ embrace of sneaky fees hurt the most vulnerable consumers. One advocate says this illustrates a broader crisis of transparency that leaves all consumers without vital information about the places they trust to keep their money. The Pew study interviewed 2,000 low-income families in Los Angeles once in 2009 and then again a year later, asking them both times about what services they used for personal banking. Over the course of the year, 8 percent of participants opened a bank account, but 13 percent closed theirs. Nearly a third of people said the reason they left was because of unexpected fees, while slightly more than a quarter said they left the banking system because of loss of a job or income.

“These fees are really a problem for consumers,” says Susan Weinstock, director of safe checking project at Pew Charitable Trusts.”Our response to this data finding is that we think there needs to be a disclosure box for checking accounts. We think this would provide an easy summary look at an account so you know what you’re getting into before you get into it,” she says.

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Read the full article, ‘Gotcha’ Fees Force Customers to Quit Banks, on Time's Moneyland blog.

Pew is no longer active in this line of work, but for more information visit the Safe Banking Opportunities Project on PewHealth.org.

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