Annual Piggy Bank Awards: Big porkers include ATM fees, credit cards

Last Updated: December 27. 2010 1:00AM
Brian J. O'Connor
Piggy Bank Awards: Big porkers include ATM fees, credit cards

Banks are hogging capital, lenders are squealing about being forced to play fair, mortgage firms are wallowing in fraud and credit card companies are STILL inventing new ways to steal your bacon.

Yup, sounds like it's time for the annual Piggy Bank Awards—or "Piggies" — the honors I annually hand out for dishonorable behavior by banksters and other scum. It's been a year of financial "services" firms going hog-wild with excuses and rip-offs, so let's pig out on this year's winners.

When pigs fly … : Bank fees took an extra hit of helium in 2010, soaring to new heights in several categories. According to the Bankrate 2010 Checking Study, ATM fees leapt 5percent from 2009 to a new high of $2.33. And the charge from your bank for using another institution's teller machine increased nearly 7 percent to an average of $1.41. Overdraft fees likewise hit a new record of $30.47, and the charge for not maintaining a minimum balance on an interest checking account increased almost 4 percent to an average of $13.04 a month.\The good news is that, by year's end, new banking rules limiting some fees had already gone into effect, the Federal Reserve was limiting some (but not all) other bank and credit-card fees and the nascent Bureau of Consumer Financial Protection should be able to protect us from others. The bad news is that banks will continue to invent and increase fees to make up the millions they used to rake in from ripping us off.

Example: New rules limit late fees on credit cards to $25 or the minimum payment, whichever is lower. To eliminate the option of "lower," some card issuers are raising their minimum payment amounts. This means low-balance customers who are late will pay more, boosting fee income. The higher payment also could prompt customers who are short of cash to pay late, generating more late fees. Oink!… and boars soar: Speaking of the Bureau of Consumer Financial Protection, the bought-and-paid-for mostly Republican lawmakers who stuff their campaign coffers with "donations" from banks and other financial services squealed their heads off about who should run the agency. Anyone with consumers' best interest in mind knew it should be Harvard bankruptcy professor Elizabeth Warren, who suggested the idea for the bureau in the first place. (Hint: If the lobbyists don't like you, you're probably on the right track.) Facing an uphill fight in the Senate, President Obama ran past these swine like a greased pig and installed Warren as a "special adviser" who needed no confirmation. By this time next year, she'll have the banksters squealing.

Quote: "I believe in personal responsibility, but it only works when prices and risks are clear up front and not buried in pages and pages of incomprehensible fine print. But, I also believe in American families. When they have better information they will make good decisions and those good decisions will … ultimately will make the entire economy stronger."

When can I buy pig protection? The newest credit-card racket being foisted on the American consumer? Payment-protection-insurance programs. These policies, added to your monthly credit card bill, promise to suspend interest and minimum payment requirements if you get sick or lose a job. According to The Wall Street Journal, policies cost 80cents to 90 cents per every $100 of debt, so a $5,000 balance means a protection premium of up to $45 per month. It's a bad deal and the money is better spent paying down your balance, or paying for a balance transfer to a card with a lower interest rate. But just because you don't sign up for it doesn't mean you aren't getting charged. Media reports find that just as in the past, the new fee is sneaking onto bills without consumers even requesting them. David Paris, an attorney based in New York, sued Discover Card in federal court, saying thousands of people had been pushed into the program without their knowledge. A class action suit over similar problems has been filed against HSBC in Illinois.

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From The Detroit News: http://detnews.com/article/20101227/OPINION03/12270315/Piggy-Bank-Awards--Big-porkers-include-ATM-fees--credit-cards#ixzz19LMVCQV9