You are not alone. Millions of Americans are caught in a vicious cycle that benefits the bottom line of the banks.
The majority of Americans are “shocked” and “disgusted” by the billions U.S. banks collected last year in fees from consumers.
That’s according to a new report from TransferWise, a peer-to-peer money transfer service. The report is based on a survey of more than 2,000 consumers.
In 2015, U.S. banks made $34.1 billion in fees. America’s three biggest banks — JP Morgan Chase, Wells Fargo and Bank of America — generated more than $6 billion in ATM and overdraft fees alone. That equates to $297 for an average American household, which most survey respondents said is far too high.
Despite this, TransferWise reveals that Americans don’t know as much as they should about bank fees: Nearly 80 percent of those surveyed admitted they did not read their bank accounts’ terms and conditions.
“Americans are likely caught in a vicious cycle that benefits the bottom line of the big banks — we don’t care enough about bank fees because we’re duped into thinking they’re far lower than they are,” Joe Cross, U.S. general manager at TransferWise, said in a statement. “We need to wake up to the daylight robbery and start demanding fairer, proportional and transparent pricing.”
Here are some other highlights of the TransferWise report:
- ATM fees: Nearly half (46 percent) of Americans said ATM fees are the most unfair bank fees. Nearly all survey respondents (95 percent) said ATM fees should be under $2, although the average out-of-network ATM fee is actually $4.52, which represents a 21 percent increase since 2010.
- Overdraft fees: Roughly 60 percent of survey respondents said overdraft charges should be less than $5, and 27 percent said overdraft fees should be eliminated altogether. “On average, Americans believe a fair overdraft fee to be around $5.69 compared to the true fee charged by banks — typically around $30,” according to TransferWise.
- Switching banks: Although millennials are the most likely generation to switch banks to get a better deal on bank fees, “Americans reported mixed feelings on shopping around for a better deal, perhaps revealing a key reason why fees are consistently high across the industry,” TransferWise explains. Just 19 percent of survey respondents reported switching banks to score a better deal.
A 2014 Consumer Financial Protection Bureau study found that roughly 8 percent of bank customers pay 75 percent of all overdraft fees. A recent report from the Pew Charitable Trusts — which found that overdraft fees disproportionately affect less affluent people, younger generations and minorities — called on the government to limit overdraft fees.
Are you among the millions who paid fees that you found unfair or exorbitant? Check out “14 Ways to Dodge Banking Fees.”
This post courtesy of Money Talks News and Krystal Steinmetz.