When Can We Call Excessive Bank Fees Fraud?

I recently got a very rude awakening about my bank and the fees they charge. This got me wondering why we accept being abused by our banks and their excessive fees? Especially when most of those fees only affect people with lower incomes!

The fee that got me started on this topic was a $42.50 fee for not having money in my account. What's interesting about this is that it has absolutely no bearing on my bank, yet they still charged $42.50. It wasn't that I missed paying my bank or ran out of money to pay my service fees. It was that I forgot to transfer money to my "other" account to pay an automatic withdrawal. I can understand getting an NSF charge from them, as it directly affects them. Having the bank charge me $42.50 on top of any NSF charge from them, that seems like it should be fraud.

What makes this even more fraudulent to my mind is that it would never affect anyone with money. It only affects people who can't maintain a decent amount of money in the bank at all times. This means the bank is punishing us for NOT having money. This made me take a step back and look at the bigger picture - the bank charges me for EVERYTHING. I pay a monthly service fee to use their bank, I pay interest when I use overdraft, I have to pay an additional fee for using overdraft over and above the interest, and then I'm charged a penalty if I don't have money in my account - and a sever penalty at that.

As I said, that penalty didn't even have anything to do with my bank. It doesn't affect them at all if there isn't money to pay other people; yet they still punish me when it happens. What makes this even more disgusting is that they don't provide any notification so you can change it before being charged. They don't have any system to e-mail you or call you and let you know it's happened. To do so would interfere with them collecting that $42.50 fee for being broke. They won't even take the money from my other account which had more than enough to cover the withdrawal.

When you don't pay your bills with the bank itself, they are more than happy to take the money from your other accounts. However, if they were to do that when you owed money between your own accounts, they would lose out on that massive $42.50 NSF charge. What's their alternative - have overdraft protection so that they can charge you other fees instead.

While $5 plus interest is almost assuredly going to be far less than $42.50, what gets me is that (once again) it has nothing to do with my bank in the first place. There is no reason for them to even have an NSF charge unless it reflects their products and services. What's even more interesting is that on my banks credit card they only charge $25 if you go over your limit. $42.50 for my bank account which has no impact on them at all, and $25 on their credit card when it has an actual impact on them - makes you stop and think doesn't it?

To be fair to the banks, they do have a history of making a BILLION dollars or more in profits in a year and they want to keep doing it. After all, if they make $1,000,000,000 in profit one year and then only $800,000,000 the next, it equals a $200,000,000 LOSS (not an $800 million profit). So the next time you hear about the Bank, or any other major company, having a "LOSS", take a moment to look a little deeper - because there is a huge difference between a LOSS and a LOSS when it comes to business.

If you think this kind of thing needs to stop or should be defined as Bank Fee Fraud, get hold of the Ombudsman for Banking Services here in Canada and let them know (http://www.obsi.ca). Only when we stand up and make the Banks accountable for their charges and fees can we hope to change the ridiculous fees that they charge.