5 Signs That Your Bank Could Be Ripping You Off

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If you hate your bank, you’re not alone. Big banking and financial services firms like Bank of America and JPMorgan Chase are among the most disliked companies in America, according to a 2015 Harris Poll, right up there with cable companies like Comcast and Time Warner. High fees, lingering distrust from the financial crisis, and poor customer service are among the reasons many people think of their bank as less of a financial ally and more of a financial foe.

A nagging feeling you’re not getting a good deal from your bank shouldn’t be ignored. While many consumers are unhappy at big banks, those who have a financial home at a credit union or community bank are more satisfied, according to a Harris Poll survey commissioned by Kasasa, a financial services company. If you’re not happy with your current financial institution, you can vote with your feet. Not sure if it’s time to find a new place to bank? Here are five signs your bank may be ripping you off.

1. You have a “free” account that really isn’t

Many free checking accounts aren’t such a great deal when you look at the fine print. Banks reel you in with a promise of no-cost checking, but they often make up for it with overdraft fees, ATM surcharges, and monthly charges if you don’t meet conditions like having direct deposit or maintaining a minimum balance. Sometimes, these hidden fees are so onerous you’re better off paying a single, predictable monthly fee.

“Low upfront, transparent monthly fees are much clearer than those accounts that are advertised as free but have highly variable back-end fees like ATM fees and overdrafts,” Tom Feltner, director of financial services for the Consumer Federation of America, told Bankrate.

If you’re in the market for truly free checking, look at smaller banks, online-only banks, and credit unions. NerdWallet put together this list of banks offering free or nearly free banking services.

2. You’re getting hit with overdraft fees

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Banks have come up with all kinds fees to squeeze more money out of their customers, and overdraft charges are among the most lucrative. The three biggest banks in the United States – JPMorgan Chase, Bank of America, and Wells Fargo – collected $6 billion in overdraft and ATM fees in 2015, an analysis by CNNMoney and SNL Financial found. The average overdraft fee is $33.07, according to Bankrate.

The good news is that you (and every other person in the U.S.) can cut off this stream of payments to the banks by opting out of overdraft protection. Banks are required to allow you to decline this service, but many people sign up anyway, then forget about it (half of people surveyed by Pew in 2014 who’d been hit with an overdraft said they didn’t remember opting in). For most, the momentary embarrassment of having your debit card declined at the register is preferable to losing $35 to a steep bank fee. Better yet, switch to a bank or credit union where overdraft fees aren’t charged.

3. You’re losing money to fraudulent charges

Americans lost $1.57 billion due to fraudulent debit card charges in 2012, according to a report from Payments Cards and Mobile. Getting your money back after your debit card has been compromised is harder than many people realize. While credit card companies are usually quick to cancel any fraudulent charges, banks don’t play by the same rules.

If you report any unauthorized charges to your bank within two days of noticing them, your losses are limited to $50. Wait any longer, and you could be on the hook for up to $500 in fraudulent expenses. Delay reporting the issue to your bank for more than 60 days, and the bank isn’t required to reimburse you at all. Plus, banks have up to 10 business days to resolve the issue once you report it. In other words, you might have to wait two weeks to get your money back. Checking your bank statements regularly can help avoid a costly mishap, as can being smart about how you use your card.

4. You’ve signed away your right to sue

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Think you can just take your bank to court if they really screw you over? Think again. Sixty-four percent of banks have arbitration clauses, a 2015 Pew study found, which means any dispute you have with them will be settled by a third-party arbitrator, not the courts. Worse, 84% have clauses requiring consumers to cover the bank’s costs in a dispute, regardless of the outcome.

Consumer advocates don’t like arbitration clauses. Not only do they let companies settle consumer disputes out of the public eye, but the company you have a problem with usually gets to pick the arbitrator. Plus, you can’t appeal the decision. The Consumer Financial Protection Bureau is working on a plan to rein in financial institutions’ use of arbitration clauses, but for now, consumers should be wary of this legal fine print.

5. You’re earning low interest on your savings

These days, finding a savings account with a decent interest rate is like finding a needle in a haystack. Deposits that pay scant interest aren’t totally the banks’ fault, though. Banks base the interest rates they offer you off of the rate set by the Federal Reserve, currently a modest 0.5%. The result for consumers are earnings on bank deposits that don’t even keep up with inflation. If your nest egg is sitting in a savings account, there’s a good chance you’re actually losing money.

Low interest rates are endemic right now – the average bank pays just 0.06% on savings accounts and 0.04% on checking accounts, according to the FDIC. Put your money in a 36-month CD and you’ll earn an average of 0.49%. Still, a handful of banks offer slightly better rates. GE Capital Bank has an online savings account with an APY of 1.05%; Ally Bank (also online) pays 1% (both as of January 2016). You may even be able to find an even better rate at your local credit union.

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