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From our president: Bank accountable

Consumer Reports magazine: August 2012

Isn’t banking easy now? Money goes in automatically, money comes out automatically, and—oops—fees get slapped on automatically.

Yeah, those fees—for a low balance, a transfer, using a teller, and everything else. You may opt to take your money elsewhere, but be aware that once a bank has you, it’s loath to let you go.

Apparently, consumers’ frustration doesn’t indicate that they’ll actually make the move; only about 3 percent of consumers changed their primary financial institution in the last few months of 2011.

Consumers Union sent 16 secret shoppers to branches of the 10 largest retail banks around the country to ask how to close an account. We also reviewed online fee schedules and account disclosures, collected consumer stories, and asked the banks’ public-relations departments to explain their policies.

It takes money to move money. Some banks charge $25 to close an account that has been open fewer than 90 or 180 days. You’ll pay up to $10 for a certified check and up to $30 for a wire transfer to move your funds. Rerouting automatic payments and deposits can take up to six weeks.

Closed but not forgotten. Some banks reopen a closed account if a belated debit or credit comes in. Then you may get socked with an account-opening fee, a low-balance fee (of course, there was supposed to be no balance in there), and an overdraft fee. (Read “Attack of the ‘Zombie’ Bank Account.”)

It’s not even in the fine print. The written account disclosures and websites we looked at lacked clear account-closing policies, and some customer-service representatives at the same bank gave conflicting advice to consumers.

Consumers Union believes that banks have a responsibility to ease the transfer process by speeding it up, transferring funds free, and making their policies clear and understandable. For our full report and tips on easing the move, go to DefendYourDollars.org.

Jim Guest

President

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