Are Bankers Really Like Swarming Flies? YES, according to CNN!

by Kristina on June 20, 2011 · 6 comments

Good Morning DINKS! Usually everyday on DINKS we like to provide information, tips, personal stories and strategies about personal finance.  However, today is not one of those days.  No No, today is a rant about a stupid article that I found on CNN titled Annoying Bank Fees.  As a bank employee whose bank salary is paid by fees, among other things, I was extremely offended by this article on CNN.

The article Annoying Bank Fees compares everyday bank fees to sticky dirty flies that we want to swat and kill.  What a stupid analogy! First or all, when do we ever get something for nothing in life?  Second of all when do we ever get a service without paying a fee? If consumers never paid fees for services they received the economy would not function.  Our economy functions on the supply and demand model, and the entire monetary system functions on exchange.  People pay money to retailers in exchange for goods, retailers make deposits at the bank, the bank lends out the money to people, and people in turn pay money to retailers when they purchase goods, it’s all a big cycle.

This article on CNN made me so upset that I felt the need to rant about it here on DINKS because it relates to money and banking as well as my job as a personal banker. People are always complaining about service fees charged by financial institutions but what people may not realize is that bank fees are just like any other fees paid by consumers for a service.  We don’t complain about the fee that we pay to dry cleaners to get our clothes cleaned, and we don’t complain about the tip that we have to leave with waiters for serving us food, so why do people always complain about bank fees?

Here is a list of the 9 Most Annoying Bank Fees according to CNN, along with my justification of each fee.  Have you ever been annoyed by one of these fees?

9. Forgetting to update your address. This is an obvious fee because there are costs involved with mailing and re-mailing account statements.  If clients don’t want to be charged fees they should be responsible and keep their personal information up to date.

8. Cashing in Your Coins. I know that some banks only charge clients who bring in coins unwrapped as loose change.  However there are some banks such as Capital One that charge a percentage of the total value of our coin transactions even if they are wrapped.  This fee makes sense because it takes a lot of time to turn a box of loose change into rolls of money.

7. Talking to a Human Teller. The fees associated with processing transactions in branch are higher than self service transactions because human tellers can process transactions that Automated Banking Machines (ABMs) cannot, such as wire transfers and foreign exchange transaction.  Most monthly banking plans include both self serve as well as teller assisted transactions.

6. Losing Your Debit Card. I have personally never heard of banks charging fees for this service, but it only makes sense because clients have to come into a branch to obtain a new debit card and there are costs to manufacture the card as well as pay the teller.

5. Getting a Paper Statement. The service fees for paper statements are partially due to printing and mailing costs incurred by banks, but they are also used to defer clients from having paper statements for environmental reasons.  Why should we pay for a paper statement and kill trees when we can get an eco friendly virtual statement online for free?

4. Requesting Old Statements. This is another obvious fee because statements are stored on microfilm and there are costs associated with retrieving, printing, and mailing old account statements.  Some banks offer old online statements to clients for free up to 3 years.  Before you call your bank to get an old account statement, check if it is available through online banking.  It is also important to note that Online Banking is a service offered to all bank clients for FREE, even though there are costs involved in maintaining and updating a website.

3. Receiving Money. Most of the fees for wire transfers are incurred by the sender; however some banks do charge a flat fee (ours is $10) for receiving wire transfers.  This fee is strictly to cover the costs of being a member of the international wire transfer service that is used by banks around the world.  Clients should be happy that their financial institution offers a wire transfer money service.  Depending on the currency in which we receive the wire transfer we may also have to pay fees for foreign exchange.  That is beyond the banks control, if you have an issue with foreign exchange fees, you have to take it up with the International Monetary Fund.

2. Redeeming Rewards Points. When we call a customer service phone number to redeem our rewards points there are costs involved.  If we don’t like the costs involved (which are usually to cover taxes) in redeeming our rewards points over the phone with a customer service agent, then we always have the option to self redeem our points online.  However, the service level is not the same.

1. Closing Your Account. The fees associated with closing an account are usually prorated based on our monthly account fees.  If these fees were not charged by the bank then we would be using our account for fee during the billing cycle.

Photo by JimmyJoe



{ 6 comments… read them below or add one }

1 Jon -- Free Money Wisdom June 20, 2011 at 7:19 pm

If you follow the rules in the first place you typically won’t be charged! My bank is very gracious and I have never been charged an overdraft few due to my loyalty and outstanding record. Nor have I been charged any other kind of few. It is all about staying on top of things and being responsible.

2 csdx June 22, 2011 at 5:03 pm

Sure, I don’t object to the fees in and of themselves, after all the banks can charge for any service they want. In these times, nickel and dime-ing is the way the bank is going just like the airlines. Sure the fees are justified because it will always take some effort, but that logic also justifies charging customers a cover fee just to enter the lobby, after all someone has to keep it looking nice. But at the end of the day, banks need depositors, so will need to cater to what people want. For my money, if the banks make it not worth my while to invest, whether by charging me for services, or not paying competitive interest rates, well I can always invest my money elsewhere.

What I object to about the fees are 2 things:

Things like overdraft fees and the like are annoying to me. Not personally, as I’m lucky enough to have the money to avoid them. Since the basic principle is that the money is being taken from those that can least afford it, while fees are waived, or additional bonuses are given to those with tons of money at the bank. A rather regressive tax in my opinion, taking from the poor and giving to the rich.

Also fees that are hidden and not upfront. Ones that you wouldn’t otherwise expect, or are not told to you when opening an account, and instead are buried in page 23 as a footnote in some contract. To that end the government has been great about making banks report such fees upfront, which I think such honesty and transparency is important in business dealings.

3 Kristina June 22, 2011 at 5:25 pm

I agree with csdx about the Overdraft Protection fees. As a banker I understand the Fee for Overdraft Protection because the bank is taking a credit risk. However, as a client I don’t even have Overdraft Protection on my account because I feel it is totally insane to pay $5 each time my account is overdrawn as well as 21% on the balance in the red.

4 crashdamage1957 June 26, 2011 at 11:08 am

Kristina, your arguments make perfect sense. I still hate those “hidden ” fees that csdx commented on. I inherited an IRA when my mom passed away, and the bank ( and I won’t name names… Let’s just call them BoA ,;)) charged me $50 account closure fee when I requested to move the funds to another institution that provided better account services and investment opportunities . Yes, I’m sure that those terms were buried in the fine print when my mom opened and then allowed her account to roll over to a 2 year term cd with a paltry rate of return. As an inherited IRA, the usual early withdrawl penalties were waved? But, would they cut me a break as a beneficiary account holder when I told them I was moving the money because they did not themselves offer a decent selection of no- load mutual funds? No, but I ended up moving the money anyway, because in the long term it was better choice. So, they got to keep my $50, but they lost far more.

5 crashdamage1957 June 26, 2011 at 11:12 am

Oh… Btw, the insect in that photo looks Like a hornet, not a fly, and an angry one at that… So maybe the CNN article should have used that taxonomical reference also ;),

6 Kristina June 26, 2011 at 11:27 am

Crashdamage1957,

My financial institution also charges a $50 fee when clients transfer their retirement savings to another institution but we tell them about the cost prior to the transfer. Usually the receiving institution should refund your $50, double check with them.

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