Banks Raise 2 Consumer Charges
California’s two largest banks are raising some consumer-banking fees in unrelated actions condemned by consumer activists.
Bank of America is raising to $2 the fee its customers pay for automated-teller machine transactions made at other banks, effective Aug. 27. The bank says that the hike, the second in 18 months, “is fair for the value provided.”
Wells Fargo, meanwhile, is raising its monthly checking fee by $1.50, beginning Sept. 1, to encourage customers to use other services. The increase applies to all types of checking accounts.
The increases are part of continuing fee hikes within the banking industry, which banks and consultants say are justified by higher costs and added service. Consumer advocates don’t buy it.
“It’s outrageous,” said Ken McEldowney, executive director of San Francisco-based Consumer Action. “The banks are able to do it because they have a captive audience. Customers chose banks on the basis of location and are willing to tolerate increased fees because it is inconvenient to switch banks.”
BofA is raising its ATM fee for transactions customers make at other banks by one-third from $1.50 currently. First Interstate continues to charge $1.50, while Wells charges between $1.50 and $3, depending on the amount withdrawn.
The increases at Wells Fargo will boost the monthly fee on its most popular checking accounts 20% to $9 from $7.50, the highest of the state’s three major banks. BofA charges $7.50 on regular checking, while First Interstate charges $7.
(At all three banks, fees are waived for customers who maintain minimum daily balances of $750 on regular checking accounts.)
Wells Fargo customers who elect direct deposit of payroll checks will receive a $1 discount on checking fees, while customers who chose check storage services will get a $1.50 break. “For people who sign up for the options, the fee will actually go down,” said Wells Fargo spokeswoman Kathy Shilkret.
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Grin and bear it: As reported in the Times two weeks ago, the California Dental Assn., representing 15,000 dentists, faces federal anti-competition charges for forbidding members from making superiority claims, such as “best dentist.”
One of the little-known ironies surrounding the case is a run-in the CDA had with the state Board of Dental Examiners two years ago. At issue was the CDA’s slogan: “We’re the dentists who set the standards.”
The dental board maintained that the slogan implied CDA dentists were better than others. In effect, the CDA was accused of violating a prohibition on superiority claims that the Federal Trade Commission says the CDA so harshly imposes on its own members. The CDA maintained that the rules apply to individuals, not organizations.
After a court skirmish, the CDA agreed to drop its slogan. It’s new tag line: “We like to see you smile.”
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Risky business: “Extremely urgent,” says the notice from American Family Publishers of Newark, N.J. “Mailing status at risk!”
The company regularly runs sweepstakes featuring celebrity pitchmen Ed McMahon and Dick Clark to sell magazine subscriptions. The notice--included in entries for American Family’s $10-million sweepstakes--says people who fail to order magazines “forfeit rights to future mailings,” possibly excluding themselves “from the most exciting and rewarding opportunities in our history.”
Since it is illegal to require consumers to buy magazines to enter sweepstakes, we wondered what the notice meant. We called American Family’s customer service line in Tampa, Fla., where an agent assured us that a purchase was not necessary to enter the sweepstakes. But she said that people who ordered magazines would receive additional entries, increasing their chances slightly.
The agent said that people who ordered no magazines faced worse odds--and might never have a chance to win again.
We tried to find out why American Family did this, but our calls to its administrative office in New Jersey weren’t returned.
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Odds and ends: Bank of America reports that Saturday has surpassed Monday as the second-busiest banking day next to Friday. The bank, along with its major competitors, reinstituted Saturday banking three years ago . . . Assistance in 140 languages is now available to insurance consumers in California when they call the Department of Insurance’s toll-free hot line. The number is (800) 927-HELP.
