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US: Consumer backlash forces Bank of America to end debit card fees
02 Nov 2011
Following weeks of consumer protest, Bank of America
announced on 1 November 2011 that it is dropping its plan to begin
charging consumers a monthly USD5 debit card fee. Bank of America's
decision demonstrates that consumers can have a big impact on
banking industry practices by joining together and making their
voices heard, according to
Consumers Union of United States, the advocacy arm of Consumer
Reports magazine.
Consumer power over banks
"Consumers have the power to make the big banks back down from
unfair practices if they raise their voices and vote with their
feet and their dollars," said Norma Garcia, manager of Consumers
Union's financial services program.
"In the end, Bank of America understood that it risked losing too
many valuable customers by charging an unfair debit card fee."
Switching banks
Bank of America's announcement in September that it planned to
charge most of its customers a monthly debit card fee beginning in
2012 sparked a huge public outcry. The public protest added
significant momentum to a growing movement among consumers to
transfer their accounts from big banks to credit unions and smaller
community banks.
Other banks back down
Over the past week, JP Morgan Chase, Wells Fargo, SunTrust Bank,
and Regions Financial Corp have all backed away from plans to
charge monthly fees for debit card purchases. Bank of America
was the only major bank left with plans to charge a debit card fee
until it caved to public pressure today.
Shop around
"The public backlash over debit card fees should serve as a big
wake up call to banks that they can't take their customers for
granted," said Pamela Banks, senior policy counsel for Consumers
Union. "While banks may come back with other fees in the future,
they'll be gauging public reaction carefully. Consumers
should be on the lookout for new fees and remember that if they're
not happy with how they are being treated, they should shop around
for a bank or credit union for a better deal."
Consumers Union has developed a set of tips to help guide
consumers interested in switching their accounts to a new financial
institution. The tips along with a "How-To Change Banks"
video is available at www.DefendYourDollars.org
Consumers for fair financial services
Consumers
for Fair Financial Services is the global campaign to increase
consumers' access to stable, fair and competitive financial
markets. Consumers International (CI), working with its members
around the world, is calling for new international
standards and guidelines that will result in real improvements
for consumers of financial services.