A proposed CFPB rule could bring relief from overdraft fees
of ConsumerAffairs
There is an unmistakable pushback on so-called junk fees, the extra charges that businesses add to their lower advertised prices.
President Biden mentioned them in his State of the Union speech. Eager Taylor Swift fans made the issue prominent last year, complaining to Congress about seller fees added to concert tickets.
With financial fees in the spotlight, the ConsumerAffairs Research Team analyzed three years of Consumer Financial Protection Bureau (CFPB) complaints to detail the worst fees, the most aggressive banks and whether proposed reforms can actually limit consumer pain.
Some banks and financial institutions draw more complaints about fees than others. JPMorgan Chase is the nations largest bank so you might assume it would produce the most complaints.
However, Chase is only seventh on the list of most fee-related complaints, producing 759 over the last three years. The dubious honor of most complaints about fees belongs to Capital One, just the ninth-largest bank, with 1,648 complaints.
I made a payment on my actual due date but was charged a $25 late fee because it did not post until the following day, a Capital One reviewer from Burbank, California, said. [The rep] informed me that I had assessed a late fee because I made my payment past the cutoff time on the due date.
Banks getting the most complaints
Here are the banks producing the most complaints about fees in the last three years:
| Company | Number of complaints | Percentage of complaints |
| Capital One | 1,648 | 9.19% |
| Bread Financial | 1,554 | 8.67% |
| Sychrony Financial | 1,304 | 7.27% |
| Bank of America | 1,242 | 6.93% |
| Citibank | 1,238 | 6.91% |
| American Express | 871 | 4.86% |
| Chase | 759 | 4.23% |
| Wells Fargo | 554 | 3.09% |
| Barclays | 453 | 2.53% |
| US Bancorp | 372 | 2.08 |
Some bank fees drive consumers to exasperation. Susan, a Bank of America customer in Sicklerville, New Jersey, said she had to pay fees to close her account in November. Then a month later she received a notice that she owed more fees.
I called customer service, Susan wrote in a review at ConsumerAffairs, and they said that if someone tries to change the account, it reopens. I said, This is ridiculous.
Still, Susan was able to get the account closed again while on the phone, only to receive a letter from Bank of America one month later. They are unable to complete my request, she recounted.
I now owe $182 for them to close. This is after I paid over $200 to close back in November.
Banks make billions from fees
Cathy Mansfield, a professor of law at Case Western Reserve University and previously a policy analyst with the CFPB, says fees are indeed a large profit center for banks and are usually paid by the most vulnerable customers.
How big of a profit center? At its peak, Mansfield said, annual overdraft fee revenue alone was an estimated $12.6 billion.
The CFPB has proposed a rule to cap bank overdraft fees at $8 instead of the typical $32, a move the U.S. Chamber of Commerce has already said it will challenge in court. Mansfield wouldnt venture a guess as to whether banks will be able to block the proposed rule from taking effect, but she said she is encouraged by the attention the issue is receiving.
Junk fees are certainly a big issue for the Biden administration, as it should be, she said.
She believes the issue with bank fees of all types is one of transparency, noting that the European Union has stronger rules requiring companies to announce the size of fees to be charged in advance so consumers arent surprised by seemingly fluid fee decisions.
If the price you saw was actually the price youre going to pay, you could make more informed decisions, she said.
You can read to study here.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-04-04 11:24:42
