Consumer Protection News

Oregonians often sign up for so-called “free” or “low-cost” bank accounts, only to discover numerous hidden fees that can cost consumers hundreds of dollars a year, according to a new report by the Oregon State Public Interest Research Group (OSPIRG).

 

The report comes as Oregonians continue to endure the worst financial crisis since the great depression, and as the U.S. Congress begins deliberations on creating a new federal agency to protect consumers from deceptive financial practices.

"For too long, we have permitted unfair and deceptive practices that strip wealth from working Americans," said U.S. Senator Jeff Merkley, who joined OSPIRG today to release the report, entitled: Tricks and Traps: The Hidden Cost of Banking in Oregon. “I am committed to creating a new federal watchdog that can rein in these practices and ensure that someone is looking out for consumers, twenty four hours a day, seven days a week.”

OSPIRG staff and volunteers analyzed 64 checking accounts offered by ten banks and eight credit unions in Portland, Eugene and Ashland.  Findings include:

• Disclosure of bank fees is poor.  30% of the banks surveyed failed to provide a written account fee schedule – in apparent violation of the 1991 Truth in Savings Act.  89% of the banks and credit unions surveyed failed to provide detailed written information on bank policies.

• Once consumers sign up for the accounts surveyed - including so-called “free checking accounts” - they pay fees estimated at an average of $166.24 annually, including:

Overdraft Protection Fees.  Virtually every bank and credit union surveyed automatically enrolled their customers into these involuntary lending programs, charging consumers fees that averaged $29.92 for each overdraft. 66% of banks surveyed said they did not allow customers the ability to opt-out of these programs.

ATM “double-dip” fees.  Virtually every institution surveyed charged their customers fees averaging $1.53 for using an “out-of-network” ATM.  Banks already receive a share of the fees charged by ATM owners to out-of-network customers.   

Deposit Item Return Fees.  Virtually every institution surveyed charged fees averaging $9.79 when their customers, through no fault of their own, deposit somebody else’s bad check.

Stop Payment Fees.  Virtually every institution surveyed charged fees averaging $26.52 to stop a payment. 

 
OSPIRG’s report called on Congress to establish a Consumer Financial Protection Agency, which would have the authority to protect consumers from dangerous and deceptive financial products. 

“The Consumer Financial Protection Agency would give consumers what they’ve needed for many years – a full time watchdog looking out for consumers in the financial market.  Congress should ensure that the Consumer Financial Protection Agency has the authority to regulate all financial products, and also allows our states to go even further to protect consumers,” said Matt Wallace, OSPIRG Consumer Advocate.

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OSPIRG is a non-profit, non-partisan public interest advocacy organization.  For the full report, go to: www.ospirg.org/reports