Not Having a Bank Account is Expensive

“‘How the Other Half Banks,’ by Mehrsa Baradaran” [New York Times]

Update: Verizon Backs Down on “Convenience Fee”

Heeding cries of outrage from the internet, Verizon decided to drop the “convenience fee” it planned to start charging for single credit card payments. Look for the cost of future Verizon cell phone plans to rise by $2, which the internet won’t complain about because it isn’t called a “convenience fee,” and everyone will pay it no matter how they pay their bills.

In other news, Spring is still doing the same thing.

Are “Convenience Fees” Just Another Way Companies Nickel-and-Dime Consumers?

It didn’t take long for companies to realize they could save a lot of money on personnel and supplies by eliminating paper bills and accepting online payments. For the most part, this has been a good thing for consumers. Paperless bills are generally more efficient for everyone, and online payment is really convenient.

To encourage this transition, many companies started charging for paper bills. In general, nobody cared. Paperless bills are more convenient for just about everyone, and it’s pretty obvious that sending paper bills costs more (even if it doesn’t exactly match up with what the companies charge). Paperless billing goes hand-in-hand with online payment, but companies really don’t like merchant transaction fees, and companies really want you to sign up for automatic payments, so many companies are using the same tactic to “encourage” customers to sign up for auto-billing, or else to use transaction-fee-free payment methods.

Verizon is the latest to introduce a “convenience fee” for online payment, although it’s a little embarrassing, since it comes right on the heels of its third data outage this year.

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Why the CARD Act is Good for Consumers


The market works well when everyone understands what they are buying and selling. But credit cards are complicated financial products. Few consumers can make an intelligent comparison of one card to another. That is a big part of why credit card companies have gotten away with charging ridiculous fees, double-cycle billing, and other transgressions over the years. Nobody knows what they are, and there may not be alternatives, anyway.

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Big Banks Targeting Consumers for Overdraft Fees


Hot on the heels of yesterday’s post about how big banks are digging their own graves with their incessant nickel-and-diming and bad service comes this bank news: “Regulation E offers aggressive bank marketers opportunities to maintain or even increase revenues from their overdraft programs.”

That’s right. Instead of acknowledging that consumers don’t want to get screwed when they use their cards, banks are strategizing how to increase revenue from NSF fees. Maybe it is time to look for an online bank, after all.

Bank of America Eliminates Overdraft Fees for Debit Cards

Consumers have complained for years about being charged $35 overdraft fees for a $2 purchase. At least one bank, Bank of America (BoA), has listened and will eliminate overdraft fees on debit card purchases.

Starting on June 19 for new customers, and in early August for existing customers, customers who attempt to use a debit card without sufficient funds will be declined. For example, if your account has $1.56, and you attempt to buy a $5 sandwich, your card will be declined, and you will not incur an overdraft fee.

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Debtors’ Prison Returns to Florida


I understand the need for courts to enforce their orders, but when hard times mean that a state like Florida is throwing thousands of people into jail just for failing to pay fines of a couple hundred dollars, something ain’t right.

The problem, of course, is that state courts are strapped for cash along with everyone else. In many states, court fines are a major source of court funding.

As Rebekah Diller of the Brennan Center for Justice said:

“Judges . . . should not become “debt collectors in robes,” which she called both demeaning to the judges and humiliating for the people who must stand before them.

Plus, debtors’ prison seems a bit, well, medieval for a modern society. Prison does not exactly pay well, either. If the courts want people to pay their fines, locking them away from their income seems like a poor strategy.

Pinched Courts Push to Collect Fees and Fines | NY Times (via AFFIL blog)

(photo: Still Burning)

Overdraft loans drive everyone crazy

Above, watch the trailer for Karney Hatch’s “Overdrawn!”, a documentary which chronicles his fight against absurd overdraft fees.  In his journey, Hatch ends up talking with several AFFIL Partners as well as Ralph Nader. He currently has an action posted on Change.org (a fantastic social network) where you can show your support for H.R. 1456, the Consumer Overdraft Protection Fair Practices Act.  AFFIL supports this bill, and signed on to joint Congressional testimony (PDF link) about it last week with eleven other groups. Keep Reading »

NWA starts charging today for first checked bag

Delta is Ready with New Fees for Frequent Fliers