Money Minute: Bank fees take hefty toll [Video]
Big banks seemed to think customers would take it on the chin as fees for almost everything went up.
They were wrong.
A new report from J.D. Power & Associates shows that almost 10% of bank customers switched to another financial institution last year, with a third saying that money-grubbing fees prompted them to pull up stakes.
The 9.6% who moved their money compares with 8.7% in 2010 and 7.7% in 2009.
“It is apparent that new or increased fees are the proverbial straws that break the camel’s back,” says Michael Beird, director of the research firms’s banking services practice. “More than one-half of all customers who said fees were the main reason to shop for another bank also indicated that their prior bank provided poor service.”
Banks have scrambled to boost revenue amid new regulations on credit-card rates, overdraft fees and other erstwhile money spinners. Free checking has largely become a memory, while new fees have appeared for a host of traditionally free services, such as simply maintaining an account.
Let’s hope the J.D. Power report will serve as a wake-up call for banking-industry execs. No one begrudges them a fair profit for their services. But reaching into people’s pockets willy-nilly will result in only one thing: fewer customers.
Long term, that won’t make shareholders happy at all.
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