Bank Service Fees - Ethical?

[JanieDough]

Sparked from http://www.offtopicz.net/44771-lack-ethics-corporate-america.html


In my accounting class we had to write an ethics paper.

In accouting there are principles set forth by GAAP - the government agency which tells you accounting rules. And one of the principles is time consideration - like if the check is for August 4th you can't cash it until August 4th, etc.

The assignment set forth FACTS about how Banc of America made about 4 million in service fee revenues last year just by processing checks in order they were received by the bank. HOWEVER, they wanted to change their policy to where if they received several checks in a day or in a few days they would process checks not by number order or when received but by order of greatest amount to least (as in it would process the checks most likely to deplete your balance first so there would be a greater chance of your future checks bouncing). This applied to debits too.

The new policy was estimated to double if not triple their service fee income. Banc of America said they were doing it because they figured the bills that were larger were more important to be paid, so that those were the ones they wanted to process first so the customer wouldn't be in trouble with say their electricity company. The paper I had to write was on if this was ethical or not.

I mean really people, do we really live in a day and age where that is even a real question of ethics and not an obvious violation?

I caught my bank doing some shady shit and I called them on it - I got three NSF fees returned to me.

I work for a CPA, and we find errors ALL the damn time. I hope you all check your bank statements and give your banks hell if they make a mistake.

 

[pjbleek]

I work for a bank....not B of A and the bank has tightened up on alot of things that before they would slide...the banks have to maintain accountability on every turn so it is up to the consumer to be sure they are aware of everything they do on their accounts, so yes, you should scrutinize their statements and don't cry to the bank when they willingly overdraft their account....

 

[Alien Allen]

After golf tonite a guy mentioned he was given a late charge. He checked with his bank and proved the check had been cashed before the due date. Yet the charge card co claimed it processed it as arriving late.

I think this shit will be more common. The banks are in big trouble with no end in sight yet.

The thing to do is to document stuff. In the case above he was able to prove he paid on time and they took off the late charge.

As to ethics I think that walked out the door quite some years ago.

 

[Dana]

I don't get fees if i use my credit union, only if i use other banks ATMs.

 

[HottyToddyChick]

I know of lot of people who *used* to use B of A. They kept getting over draft fees because checks were processed out of their account before payroll checks were processed in. Screwy business.

I have accounts with two credit unions- one I don't use in person and only withdraw from twice a month, but they have 24 hour customer service, which is nice, and the other is top notch all around. They explain fees to us, and when I kept overdrafting my account a couple years ago, she took the time to show me how to balance a check book and compare it to my statement. Wonderful, wonderful people at a wonderful bank. I will miss it.

I think it is fair to charge fees- banks need an income somehow. But *how* they do it it's what important, IMO.

 

[JanieDough]

I don't get fees if i use my credit union, only if i use other banks ATMs.

good point -= usually credit unions don't pull this shit =- especially small ones.

 

[Veronica]

I personally had an account a Bank of America. They have tried SCREWING me on several occassions. I decided to go to our federal credit union and I am very happy with them so far.

 

[robdawg1]

My bank has a habit of holding debits until I get down to a low balance and then hitting all the little debits( the 5-10 dollar ones) that i forgot I made and running thm thru at the same time...and charging me a nsf fee for each one!!

 

[pjbleek]

My bank has a habit of holding debits until I get down to a low balance and then hitting all the little debits( the 5-10 dollar ones) that i forgot I made and running thm thru at the same time...and charging me a nsf fee for each one!!

really?
they can't do that....
call them on it....

 

[robdawg1]

unfortunately they can...It is up to me to keep my own records of what i bring in and what i send out, so if i was keeping up with my own ledger, instead of relying on the computer balance then i would be fine....so its my fault, it is just dirty!!

 

[Veronica]

If my account is low, the hit the big debits first, then all the litte ones and screw me with nsf charges. I HATE bank of america

oh and get this. Zk has had his credit card with them for YEARS 25k limit and they just upped his interest rate since he was ONE day late!!!

 

[alibaba]

most banks over here don't charge for the regular day to day stuff, but will charge you if you miss a DD or go overdrawn!!

 

[Darph Bobo]

I had a B of A account a long time ago and they did the same thing to me. I bank with USAA now.

The whole 'You don't want to bounce an important check' is BS because they usually pay the stupid things anyway and just charge you $35+ for the NSF. If they did them smallest to largest, they might only get 1 NSF fee, but doing it the other way virtually guarantees 3 or 4. Instant profit!!!

 

[Strauss]

In accouting there are principles set forth by GAAP - the government agency which tells you accounting rules.

First point: GAAP is not a federal agency. GAAP stands for Generally Accepted Accounting Principals. GAAP sets forth the standards for proper business accounting, usually it concerns publicly traded companies (but not excuslively).


Second point: No one should be writting checks against funds that are not in their account at the time the check is written. If you follow that prinicpal you can never bounce a check. Writing checks against your account when it lacks the necessary funds to cover it can be considered false pretense, or in some cases, fraud.

Third point: Overdraft protection. If you have overdraft protection you can never bounce a check (within reason). You can also set it up so that as soon as there is enough money in your checking account to cover the advance the bank made to cover your check (plus a small amount of interest) can automatically deducted to pay back the overdraft.

 

[JanieDough]

First point: GAAP is not a federal agency. GAAP stands for Generally Accepted Accounting Principals. GAAP sets forth the standards for proper business accounting, usually it concerns publicly traded companies (but not excuslively).

Ok thank you - i just knew it was the rules we had to follow.

Second point: No one should be writting checks against funds that are not in their account at the time the check is written. If you follow that prinicpal you can never bounce a check. Writing checks against your account when it lacks the necessary funds to cover it can be considered false pretense, or in some cases, fraud.

yeah but we all make mistakes (i don't think the majority of us are committing fraud when we bounce a check) and it is not ehtical to disregard time consideration to maximize fee revenue

Third point: Overdraft protection. If you have overdraft protection you can never bounce a check (within reason). You can also set it up so that as soon as there is enough money in your checking account to cover the advance the bank made to cover your check (plus a small amount of interest) can automatically deducted to pay back the overdraft.

yes but the bank charges you a fee which is what we are talking about

 

[Strauss]

Ok thank you - i just knew it was the rules we had to follow.

You're welcome

yeah but we all make mistakes (i don't think the majority of us are committing fraud when we bounce a check) and it is not ehtical to disregard time consideration to maximize fee revenue

Occasional bounced check does not equal false pretense or fraud. I was referencing the person who does it all the time. I agree that disregarding the time at which a check is presented so as to cause a check to bounce is unethical, in fact its more than unethical. Its this type of behavior by credit card companies, such as paying off charges with lower interest rates first even they weren't incurred first, that caused the recent passage of the credit card bill. Banks are going to have the same happen to them.

yes but the bank charges you a fee which is what we are talking about

I have never seen a fee for use of overdraft protection, it has always been an interest charge for as long as the overdraft is outstanding. Now the rate of interest charged is outrageous but if you pay it off quickly, which you should be able to do given that the check was written against money that was to be in the account, the interest hit will be small. Much less than the fees chartged by B of A. BTW, I refused to do business with B of A.

 

[JanieDough]

this so was not a thread started with the intention of bashing B of A - that was just the fact set we were given

BUT I know numerous people who got bad marks on their record from B of A even though they didn't have one NSF fee or anything - they got it for leaving B of A

 

[ssl]

I have wanted to start a bank, but it would be a difficult industry to get into.

But my practices would be better than those you read/hear about everywhere, because of common sense.

Would not make much money in fees, really; it would have investment properties after a time.

 

[JanieDough]

I have wanted to start a bank, but it would be a difficult industry to get into.

But my practices would be better than those you read/hear about everywhere, because of common sense.

Would not make much money in fees, really; it would have investment properties after a time.

sounds like you should start a credit bank

 

[Minor Axis]

I think Banks should publish their fees and should highlight any fees on their statements and the reasons for them. And then let customers choose their banks. Tricky shit should not be allowed.