Boston Globe: Tired of Confusing Hidden Fees? The Banks Hear You
Under pressure from regulators, and increasingly sensitive to consumer complaints, many banks are adopting shorter, more concise, and easier to understand disclosures to their checking account fees.
Customers in the past have needed detective skills and magnifying glasses to scour account agreements that ran for more than 40 pages to figure out exactly which fees applied to their checking accounts. But now, more than 20 banks, including Bank of America, Citizens Bank, and Sovereign Bank, have condensed small booklets of fine print into a two- to four-page list of service fees to help consumers understand the costs of their accounts.
The summaries tell customers what they will pay for a variety of transactions, such as using an ATM outside of the bank’s network, maintaining a dormant account, and participating in the bank’s overdraft plan.
“It’s an important step,” said Susan Weinstock, the director of the Safe Checking Project at The Pew Charitable Trusts. “This is a fundamental product. Over 90 percent of Americans hold [checking accounts] product, but it’s difficult to comparison shop.”
Pew, a nonprofit public policy organization, has advocated for reforms to bank fees disclosure and practices. Pew developed a consumer-friendly disclosure template that is in a table format and categorizes charges by basic account use fees, charges for overdrafts, and an explanation of how expenses are processed by the bank. A growing number of banks have followed Pew’s format since it was developed in 2011, including Citizens Bank and Sovereign Bank, which adopted new disclosure forms this month.
No bank has adopted all of Pew’s recommended best practices for disclosure, overdraft, and complaint resolution, Weinstock said. Federal regulators may also need to step in to make sure that banks don’t reverse these recent improvements and that more of them adopt uniform standards, Weinstock said.
Read the full article at bostonglobe.com.
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