Most people see banks as being “reputable” institutions, when in reality, they’re not. This isn’t to say that banks are bad, but they definitely don’t go out of their way to help people save. With that being said, let’s take a look at five ways that banks are ripping you off!
#1. Not Being Clear About Bank Fees
This is by far one of the most common ways that banks rip people off. Remember that about 50% of a bank’s revenue comes from overdraft fees, so it would make sense that they wouldn’t make their best effort to inform you about their fees. At best, they’ll provide you with the minimum amount of information required by law, but nothing more. It can be hard to learn how to save money fast when this is happening. When opening up a bank account, always inquire about all existing fees. That way, you won’t be caught in a situation where fees are “snowballing” on top of one another to an unmanageable amount.
#2: Increasing Overall Costs
Over the last 20 years, banks have slowly but surely raised their monthly service fees. This happens at a rate that’s just slow enough for people to not catch on. For example, between the years 2007 and 2012, the average monthly service fee for banks in the United States increases by close to 150%! During this same time, overdraft charge fees when up by about 10%, while ATM surcharges went up by about 40%. Its really hard to learn how to save money fast while this is happening. Let’s get back to monthly service fees: over the course of two years, that’s over $200 spent just in keeping your account open. And it’s safe to say that all of these fees will continue to increase over the coming years.
#3: Ignoring Fraudulent Charges
It’s bad enough that banks are charging outrageous service fees and increasing them each year – now consumers have to deal with the banks turning their heads at fraudulent charges. Banks should go above and beyond to ensure that no suspicious charges get authorized on your account. Bigger banks may not be guilty off, but there are definitely smaller regional branches that turn their heads the other way when a problem like this occurs. Why? Perhaps it’s a way for banks to collect additional overdraft fees. There’s no way to learn how to save money fast when banks are doing this to their consumers.
#4: Offering Payday Loans with Super-High Interest Rates
You’d think that a wealthy financial institution like a bank would be in a position to offer better interest rates on payday loans compared to say, a smaller private loan company. However, this isn’t the case. At some banks, payday loans can have interest rates that exceed 350%. This is a clear indication that banks are not out there to help people. Branches like Wells Fargo, Fifth Third, and Regions Bank are all guilty of this.
#5: Mishandling Mortgage Paperwork
The Consumer Financial Protection Bureau recently discovered sloppy paperwork and missing protocols are very common in bank mortgage services. What can this mean for you? Well, this could result in things like longer application review periods, delays in paying property taxes, and even delays in canceling mortgage insurance. In the long run, learning how to save money fast can be impeded by a bank’s inability to file paperwork the right way.
Based on all of this information, it doesn’t appear that banks have your best interest in mind. So there you have it: 5 ways that banks are ripping you off. While things don’t seem to be changing anytime soon, hopefully this article will shed some light on what’s really happening behind the curtains.