Illinois Teen Learns About Bank Fees the Hard Way

[DGuller]

Or maybe it could be that banks don't generally compete on gotcha fees, because they're hidden by design.

[Malthus]

Are you saying that fees and penalties totalling $229 can be attributed to the actual cost to the bank of the teller's time in processing a form?   

Damn, that's one expensive teller.

Are you saying that the only two possible answers are a fraction of a cent and $229?

No, I'm saying that the 'we need that money for the cost of servicing your account' explaination has to be wrong in this specific case, because whatever that cost was, there os no way in the world it could possibly amount to the $229 charged in this particular case.

[DontSayBanana]

If it's the rule, perhaps the lesson is that this is the cost to the bank of providing that service. 

If I go to supermarket after supermarket after supermarket in the belief that they're ripping me off by charging more than 10 cents for a loaf of bread, maybe after I've looked for a while I should conclude that the fair price of that loaf is in fact more than 10 cents.

If a customer had an unlimited source of cash, I'd agree with you- my problem isn't with the fact that they do this, it's the fact that it's designed to hit the very people who can't afford it.

[Admiral Yi]

Or maybe it could be that banks don't generally compete on gotcha fees, because they're hidden by design.

Your reasoning seems a little circular.  If the DGuller Bank hides monthly fees by design to trap customers, the Yi Bank should be able to lure customers away by doing not hiding monthly fees designed to trap customers and announcing the fact.  There's nothing about your hidden fees that forces me to follow suit.

[Admiral Yi]

No, I'm saying that the 'we need that money for the cost of servicing your account' explaination has to be wrong in this specific case, because whatever that cost was, there os no way in the world it could possibly amount to the $229 charged in this particular case.

Which I didn't respond to.  I responded to your post about servicing costs being a fraction of a cent.

[Valmy]

I agree 100%.  You're supposed to bitch about government services and other monopolies, because you have no choice but to use that provider or forego the service.  There are thousands and thousands of banks and credit unions you can take your business to if you think one is ripping you off.

Indeed.  That is what I do.  I do not trust banks or Credit Unions at all.  I make it very clear exactly how I want things to go and if they give me any crap about it I leave.

But um why can I not complain about banks that have shitty service?  You seem to be working awfully hard to justify and protect shitty business practices.

[Admiral Yi]

If a customer had an unlimited source of cash, I'd agree with you- my problem isn't with the fact that they do this, it's the fact that it's designed to hit the very people who can't afford it.

Not sure what your point is.

[Malthus]

No, I'm saying that the 'we need that money for the cost of servicing your account' explaination has to be wrong in this specific case, because whatever that cost was, there os no way in the world it could possibly amount to the $229 charged in this particular case.

Which I didn't respond to.  I responded to your post about servicing costs being a fraction of a cent.

So you agree that these fees are not linked to a legitmate business expense? If so, seems your whole line of argument is a red herring, is it not?

Who cares how much it actually costs to service an account - if the fees are not proportinate to that cost in some manner? A fraction of a cent, or a few bucks, makes no difference because it isn't a factor.

[Admiral Yi]

So you agree that these fees are not linked to a legitmate business expense? If so, seems your whole line of argument is a red herring, is it not?

Who cares how much it actually costs to service an account - if the fees are not proportinate to that cost in some manner? A fraction of a cent, or a few bucks, makes no difference because it isn't a factor.

I have throughout been arguing in defense of minimum balance requirements and monthly fees for low balance accounts.

[Admiral Yi]

But um why can I not complain about banks that have shitty service?

Depends what the point of the complaining is.

You seem to be working awfully hard to justify and protect shitty business practices.

Not at all.

[Ideologue]

Dunno why you dudes are bothering.  Yi does not care about exploitative practices so long as they meet the very minimal standard of involving obligations freely entered into.  E.g., it's okay to cheat people if they failed to read, or failed to understand, binding contract provisions.

Now, an absolutist stance on the freedom of contract is a nice, simple idea, but let's be clear: as an independent datum, this does nothing to bolster one's faith in contract absolutism if one has not yet joined the ranks of the converted.  Quasi-involuntary transfers from poor people to banking institutions that reduce the amount of consumer goods and services poor people can by, sometimes sharply, thus doing their part to reduce demand for jobs that provide such goods and services is not likely to inspire many plaudits outside of people who think any freely-negotiated contract, regardless of actual bargaining power imbalance, advances civilization.

I suppose one might argue that the bank takes the money and does equally useful things with it, but I think we all know by now that this relies just as much on blind faith as a belief in the fundamental goodness of a binding contract.

[derspiess]

Sure, and it costs the bank essentially NOTHING to maintain those accounts. 

What is the basis of your assertion here?

[Valmy]

But um why can I not complain about banks that have shitty service?

Depends what the point of the complaining is.

You seem to be working awfully hard to justify and protect shitty business practices.

Not at all.

But you told me everybody else was cool with these sorts of shitty fees and horrible service and all I had to do was check my account all the time.  That if I have to pay hundreds in overdraft fees it is entirely my fault for my own crappy inability to spend all my time checking contracts and balances.

Must have been a different Yi.  Do you have an evil twin?

[Malthus]

Dunno why you dudes are bothering.  Yi does not care about exploitative practices so long as they meet the very minimal standard of involving obligations freely entered into.  E.g., it's okay to cheat people if they failed to read, or failed to understand, binding contract provisions.

Now, an absolutist stance on the freedom of contract is a nice, simple idea, but let's be clear: as an independent datum, this does nothing to bolster one's faith in contract absolutism if one has not yet joined the ranks of the converted.  Quasi-involuntary transfers from poor people to banking institutions that reduce the amount of consumer goods and services poor people can by, sometimes sharply, thus doing their part to reduce demand for jobs that provide such goods and services is not likely to inspire many plaudits outside of people who think any freely-negotiated contract, regardless of actual bargaining power imbalance, advances civilization.

I suppose one might argue that the bank takes the money and does equally useful things with it, but I think we all know by now that this relies just as much on blind faith as a belief in the fundamental goodness of a binding contract.

Does the US have the common law notion that penalty clauses in contracts (as opposed to liquidated damages clauses) are not enforcable?

[Admiral Yi]

But you told me everybody else was cool with these sorts of shitty fees and horrible service and all I had to do was check my account all the time.  That if I have to pay hundreds in overdraft fees it is entirely my fault for my own crappy inability to spend all my time checking contracts and balances.

Must have been a different Yi.  Do you have an evil twin?

I don't think a monthly fee on an account that drops below a minimum balance requirement is a shitty fee or horrible service.  I don't think a minimum balance requirement is shitty service.  I know exactly one person that doesn't bother balancing her check book (my mom) and she gets my dad to do it for her.  I confess I haven't surveyed a wide range of people to see if they bother balancing their check book, I just assumed everyone did.  Maybe in fact it is an incredibly onerous task that many or most people shirk, and these people are constantly paying overdraft fees.

I don't feel I can assess how reasonable any given overdraft fee is.  But it does make sense that if you're the kind of person who has no idea what their account balance is at any given time to look for a bank or credit union which does not charge a daily overdraft fee.  Or to purchase overdraft protection if that's an option.