BofA Debit Fee Plan Led to 20% Jump in Closed Accounts

Source: ABC News

The days of the easy fee grab may be coming to an end. Bank of America’s failed plan to impose a $5 monthly debit card fee led to a 20 percent increase in closed accounts in the last three months of 2011 and a public relations headache, which other companies may be keen to avoid.

... “The BofA fiasco over charging customers a fee just to use their debit cards should be a lesson to other banks that consumers are angry that their practices wrecked the economy and that consumers now realize that they have choices,” said Ed Mierzwinski, director of the consumer program with the U.S. Public Interest Research Group. “Banks will now be careful to only attempt to impose fees that add value, as opposed to nuisance or “gotcha” fees. Unfair fees now result in consumers voting with their feet.”

During an earnings conference call on Thursday, Moynihan revealed the $5 debit card monthly fee, proposed in late September and rescinded just one month later after public outcry from customers, led to an “elevated level of account closings in the quarter”: a 20 percent jump in the fourth quarter of 2011 compared with 2010.

Read more: http://abcnews.go.com/blogs/business/2012/01/bofa-debit-fee-plan-led-to-20-jump-in-closed-accounts/