Last week the CEO of Wells Fargo appeared before a congressional committee talking about “trust.” It didn’t go over that well with committee members since he was there to talk about the revelations that the bank had fire more than 5,000 employees for opening up several million fake bank and credit card accounts and essentially cheating its own customers.
It was in part some of those customers who discovered odd fees on their statements that led to the investigation.
Richard Reeve from Consumer Credit Counseling in Savannah says the Wells Fargo story reinforces one thing. “I think it’s a reminder that we just need to be checking our accounts,” he told me.
Reeve says every year billions of dollars are collected by financial institutions for what are considered “legitimate” fees. He says that especially includes overdraft fees so he urges consumers to learn more about these fees and to protect themselves if possible. He says overdraft protection in and of itself is like a short term loan and you may still be charged fees. “So we don’t really recommend using overdraft protection if it just lets you make transactions that get you more in the hole and you pay fees on top of that,” he said.
Reeves says one thing that is good is to have your checking account tied automatically to your savings account so any overdrafts can be paid directly with your savings.
He also says if you bank online you may overlook fees but always check the monthly statement online even if you no longer receive a paper statement. “But we still need to pay attention we need to set up a time whether it’s once a week, once a month, every paycheck where we’re paying our bills and reviewing our statements and any fees we are charged,” he said.
He also recommends doing a yearly evaluation of your financial institution to see if it is offering you what you need. “We did a study last year and were disappointed to learn the number one reason people chose a bank is name recognition, We want people going beyond that we want people thinking about the location, the features and the fees of the account,”