When I use a word... Posted by mitcka at 06/06/07 03:07 PM

When I read about Bank of America's new ad campaign...

Bank of America Corp., which collected more than $22.4 billion from customers last year for everything from using a competitor's ATM to paying a credit card bill late, is launching an effort today ostensibly to help customers avoid the pesky fees.

It's an ironic campaign for the bank because more than half its annual revenue comes from noninterest income that includes such fees. In the recently completed first quarter, growth in fees and other non-interest revenue sources helped the Charlotte-based company post a 5 percent earnings increase.

It's not clear if the bank thinks its online and in-branch advertising campaign — called "A little knowledge is a powerful thing" — will actually cut back on that source of income, and the company declined to disclose how much it's spending on the effort.

...I couldn't help but think of Humpty Dumpty, that cynical but prescient mentor of children everywhere.

'When I use a word,' Humpty Dumpty said, in a rather scornful tone,' it means just what I choose it to mean, neither more nor less.' 'The question is,' said Alice, 'whether you can make words mean so many different things.' 'The question is,' said Humpty Dumpty, 'which is to be master - that's all.'

So what does Bank of America choose to mean by "A little knowledge can be a powerful thing"?

Well, let's start with "A little": That probably means "not much." Bank of America may tell you that you can avoid bounced check fees by not bouncing checks. But Bank of America will probably NOT tell you that its bounced check fees have skyrocketed in recent years. Bank of America’s posted fee schedules say that you will pay $20 per check, up to $100, the first day in any 12 month period that a check is bounced, but then $35 for each additional bounced check, up to $175 per day. Wow! Better keep that checkbook balanced! Just ten years ago the average large bank charged a one time fee of $21.29 for a bounced check fee and $20.04 for an overdraft on a checking account, according to an old government report, the Annual Report to the Congress on Retail Fees and Services at Depository Institutions (June 1998, Table B.4.1).

Then there's "knowledge": Bank of America might mean "acquaintance with facts" as opposed to the other common meaning "the body of truths." So for example, Bank of America might tell you to avoid bounced check fees by making your deposits earlier, since Bank of America might hold your deposit for several days before the money is there to cover the checks. Will they tell you that, in the age of electronic money, there's absolutely no reason for them to use long "check holds" any more--and your money could be available a lot sooner if they changed their own policies? Perhaps that's not what they choose to mean by "knowledge."

Of course "can" might take its simplest meaning: "may" but not "will." Your power will be entirely at your descretion, not theirs.

And then what could they mean by "a powerful thing": This could be one of those miracle moments when words actually mean their opposite. You will not, in fact, have power because Bank of America is merely offering to give you a brochure explaining in plain language all the ways the bank can nickle and dime you to death.

What could Bank of America offer to do instead of issuing brochures? Well, they could change some of their fee policies:
• Adopt a bank policy to apply regular hold times and not the allowable extra-long check hold times to checks of $10,000 or less and count Saturdays towards the check hold waiting period;
• Don’t charge a fee for checks that bounce or are covered by an overdraft policy only because of the bank decides to process the biggest checks first; and
• Don’t charge a bounce or overdraft fee for checks that would have been good if not for a check hold on a prior deposit.

If Bank of America made it easier for you to avoid absurdly high bounced check fees when you actually have the money to cover the checks--that would be some powerful information. But they haven't promised that. So when you read your brochure, remember Humpty Dumpty's final words "Impenetrability! That's what I say!"

comments (9)

1 Posted by Susan Shew at 06/06/07 08:09 PM

Regarding finance charges: My husband has a mortgage that is serviced by Countrywide Financial. In August 2006 the company returned our badly mutilated August mortgage check to us because it could not be processed. I sent the check on August 1st then we left on a two-week vacation. When we returned we found a letter from Countrywide informing us that we had not replaced the mutilated check in a timely manner and would have to pay a finance fee of approx. $125.00. In May of this year Countrywide left about four automated messages on our answering machine asking us to call an '800' number. Since the 'caller' did not give a reason for the call, we assumed they were marketing calls and did not answer them. On May 30th the 'caller' mentioned for the first time that the call was not related to marketing. The next day I called the '800' number and was informed that Countrywide had not received our May 1st mortgage payment. I immediately went to our local Countrywide office and paid both the May and June mortgage payments. With regard to the original check, I had sent it to Countrywide's bill processing department in Van Nuys, which is close to where I live, between May 1st and May 4th. The bill is not overdue until after the 11th of the month. It should have arrived in Van Nuys by May 8th at the latest. The check was sent in the envelope and with the coupon Countrywide sends us each month. The envelope contained our return address and was mailed at our local post office so the postal service could have returned it if there had been a problem with the postage or the visibility of the address. Two other checks that were mailed at the same time as the Countrywide check have cleared my bank. We received no letter from Countrywide informing us that our May mortgage payment had not been received. Countrywide normally sends us a bill in the middle of the month for next month's mortgage payment. In May I received no bill for the June 1st mortgage payment. Yesterday (June 5th) I received a bill from Countrywide dated May 30th. The bill was for our May mortgage payment plus a $125.91 late charge. The bill stated that if we did not pay it by June 11th (I received it on the 5th) we would be charged a late fee of $251.82. The bill was confusing because the payment due date was June 1st, so it appeared to be the bill we had not received for our June mortgage payment. In very small lettering the bill stated, "We have not received your home loan payment that was due on 5/1/2007...Avoid mail delays. We have two convenient methods of making your mortgage payments electronically MortgagePay on the Web and Mortgage Pay on the Phone. MortgagePay...is free before or during the first third of your grace period. However, if allowed by applicable law, a $3.00 service charge will apply, if your online mortgage payment is made during the second third of your grace period and a $6.00 service charge will apply during the last third of your grace period....There is a service fee for MortgagePay on the Phone.." No mention is made of the size of the fee for the MortgagePay on the Phone service. Since the current grace period extends from the first of the month to the 11th of the month and there is no service fee as long as the check arrives by the 11th, it would be in Countrywide's interest to 'persuade' as many customers as possible to begin using its MortgagePay on the Web and MortgagePay on the Phone services since both of these services increase the probability that customers will incur service fees.

Has anyone else had a similar experience with Countrywide?

Befuddled

2 Posted by mitcka at 06/08/07 07:20 AM

Wow, you are really getting hammered with the late fees! I did a quick look elsewhere on the Internet for people with similar experiences. Here's one.

3 Posted by John Murphy at 06/12/07 10:09 AM

Hardly a month went by that Bank of America didn't enclose a lengthy notice, all in small print, of a change in their "agreement with the customer" I have solved the problem by simply transferring my accounts to another bank.

4 Posted by Gail at 06/12/07 03:17 PM

If you'd like to complain to a government agency about how you have been treated by your lender, you can find a list on where to complain at our Consumers Union website, consumersunion.org, under the Money toolbar, or go directly to it here. (http://www.consumersunion.org/pub/core_financial_services/001370.html)

5 Posted by John at 06/18/07 07:18 PM

Dear Susan Shew,

I’ve had the exact problems with Countrywide. I pay each month on time and each month they send me my bill after it is due. For example, On May 3rd, I called Countrywide and informed them I had not yet received my May 1st due bill in the mail yet. I asked them to put a note in the computer that I had not received it yet. They told me the bill due May 1st was not scheduled to be mailed to me until May 7th. I asked the teller why and she had no explanation. I then called countrywide again on May 13th to tell them I had still not received my bill that was due on May 1st and I told them I would not pay a late fee since I hadn't received the bill yet. Finally, on May 14th at 7:00 PM I finally received my bill. At that point, I received the bill 14 days after it was due and just a few hours prior to a late fee assessment. So, again, I called countrywide customer service and told them the situation and they said I would be forced to pay the late fee unless I paid by phone or online. I told them I didn't feel comfortable paying by those two options since I had been a former victim of identity theft. In the end, I was forced to pay a late fee of $300. I finally went to a countrywide branch and got the situation taken care of. However, I never got my $300 back. If this is common practice with Countrywide, they sure are making a lot of money off their corrupt billing practices.

6 Posted by Julie at 08/03/07 10:05 AM

I'm dealing with this at BofA right now. I have banked with them since 1996 and lately (starting about 3 months ago), for no apparent reason, they began putting holds on deposits I would make to the ATM. The first time it happened, I had no idea. I deposited a monthly paycheck which I always receive through the ATM. I get paid once a month so the check went in a few days before month-end because my mortgage payment is automatically deducted on the 1st of each month.

Well, this month BofA decided to put a hold on in, reason? The check was over $5,000. Hmm, I've been depositing this check every month for the past three years. Well, I don't know there is a hold on the account until I start receiving NSF notices in the mail. Within the first three days of the month, I've racked up $210 in NSF fees. My mortgage company is trying to draft the funds for the mortgage payment -- bam, $19, the little trip to McDonalds for $5.25? Paid by the nice bank -- with compliments of another $19 NSF fee so much the NSF fees grew to $35 for each item due to "more than six items being returned in the last month."

Okay, I go to the branch, I show them the same check has been deposited every month for the past three years, I show them proof the check cleared the day after the deposit was made in the ATM. They begrudgingly release the hold, and, as a "courtesy" reversed half of the $210 in fees they charged while they held my money.

Next month, same thing. The reason for the hold this time? I was overdrawn more than three days in the past so many months. HELLO??!!!! I WAS OVERDRAWN BECAUSE OF THEIR STUPID NSF FEES.

I HATE BANK OF AMERICA. For the past two months, no holds, now, with my July paycheck, a hold. Already racked up $70 in NSF fees. Went to the bank yesterday with proof the check cleared. Answer, "we don't have to release the hold until the hold period is up, I'm sorry, it gets released on Saturday, August 4 -- isn't that wonderful?" Yeah, wonderful. I made the deposit on Monday, July 30, the check cleared Wednesday, August 1. I still have no money available to me until Saturday, in the meantime, I get to pay $35/day as the mortgage company will continue to try to auto deduct my mortgage and BofA will charge a $35 NSF fee. So, let's see, I get to pay another $105 ($35 from August 1 to August 3 -- each day my mortgage company tries to deduct the payment) -- just for holding my money for which funds are good, cleared and sitting in BofA's billions of coffers.

This is it BofA. I'm through with you. I HATE YOU. You have ruined my days one too many times.

Advice to others? When you make a deposit at BofA, go into the branch. That is the only way you are going to find out they put a hold on your check and then you can talk directly to the bank manager. They will probably charge you $3.00 just for letting you talk to a "live" person (they did this me once about two years ago when I made a deposit in the branch). But at least then you can convince them to look at your account history to show you do indeed deposit good checks on a consistent basis.

Me? I'm doomed now with BofA. I show I've been overdrawn on my account now for XXX days in the past XXX months because of their holds. Time to close the account and go to either WaMu or Wells Fargo. Can't decide which to choose, really don't want either but I need to choose a new banking relationship.

And, as far as trying to have great credit and pay my mortgage on the day it's due, oh well. I'll need to change the date to the 5th of each month -- just to be sure these greedy banks get their use of my money free of charge for five days before my creditors.

PLEASE PLEASE CHANGE THE LAW. This has created an unbelievable financial hardship for me these past four months.

7 Posted by Melody at 08/15/07 01:47 AM

You're in Gloved Hands with Allstate...

It has been 9 months since the $102,000 burglary of my home and Allstate still has not paid a dime, not even an advance check to get me through the financial hardship. I am $50k in credit card debt and took out an additional $35k in home equity to replace items stolen, trusting that Allstate would pay. They are not researching the information I have given them and last week told me flat out that I would "get nowhere." Please help!

8 Posted by Greg at 09/25/07 11:55 AM

Speaking of BofA, I just opened my credit card statement I received yesterday. Low and behold BofA decided to change the terms of my agreement. I had borrowed 4K from them a few months ago (April), through a promotion for a fixed rate of 2.99% until the balance was paid off. Suddenly this month the APR jumped to 19.98%, even though I was never late. I called them and it was a complete hassle to get an operator, but did after about 5 minutes. She informed me that they just decided to change it and there was nothing I could do.
Their Privacy Policy statement for 2007, states "Trust.Respect.Integrity. Ha Ha, what crap. Thanks Congress for giving away the kitchen sink to the banking industry. and enabling them to do whatever the hell they want. I don't know who to call first, my attorney or my congressman.

9 Posted by Peg S at 12/04/07 09:54 AM

I symapthize with all of you. You are all being robbed without the (known) perpetrator(s) subject to arrest or conviction.
The people who approved these changes need to be voted out of office, AS SOON AS POSSIBLE.
They do not care about their constituents. Their main objective is to stay in office, increase their own paychecks, take their extended vacations and pass self serving, tacked on bills that in one way or another line their pockets.

Anyway, have you ever considered joining a Credit Union?
The people are friendly, knowledgeable and more than willing to help with any question or problem whether online, on the phone or in person.
I've dealt with quite a few banks over the years and can honestly say that joining a credit union has been the best (financial)decision ever.
Look into it, what have you got to lose beside all those fees?