Banks better with the ‘gotcha’ fees: Pew Charitable Trusts

According to the latest revelations of a study by The Pew Charitable Trusts, the biggest banks of the nation are doing a great job by providing and disclosing all the necessary details on checking accounts feeds and term to the consumers. The body however stated that there is need for more regulations and policies to protect the consumers of the banks from gotcha overdraft fees. It also stated that same concerns are regarding rights of consumers to settle disputes.

Pew in its report made it clear that the national wide banks have improved their services and practices since the body’s previous analysis before. Speaking on the flaws, the body said, Yes we still find the need for action from the Consumer Financial Protection Bureau to ensure that the banks offer the highest level of consumer protection.

In the study 44 banks among the largest 50 national banks based on the services in the areas of account disclosures, dispute resolution policies and overdraft policies were ranked. The perfect scorer in the ranking is the Ally Bank, which is an online bank primarily.

Speaking about the review, Susan Weinstock, safe checking project director of Pew said that a mixed bag for consumers was called for the rankings. Adding to the comment, she told that they have witnessed improvements in the bank operations but at the same time worsening of some practices has also been faced.

Shedding light on the issue of the dispute settlement rights of the consumers, the report revealed a negative sign. More banks are now adding jury-trial and class-action waivers in account agreements along with mandatory binding arbitration clauses. All these inclusions restrict the options for the consumers in case of a dispute settlement. Pew has raised concern and asked the financial protection bureau to take actions and prevent the inclusion of mandatory binding arbitration clauses in the account agreements.

Among a revelation made by the report stated that half of the banks actually never reordered the checks, debit card transactions or other withdrawals from high to low. The study shows that these banks reorder the transactions from high to low instead of processing them in the order they came. This practice drains the account more quickly attracting most overdraft fees.

On the positive side, Pew said more big banks are offering their clients knowledge of key terms and fees through use of short and simplified disclosure boxes. This helps the consumers to easily understand their checking accounts’ intricacies.

Among the 44 banks under study, 19 of them adopted a disclosure box which met criteria of Pew.