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  • ATM fee for getting nothing

    QUOTE
    In denial: ATM fee for getting nothing
    Posted: Friday, October 28 at 06:30 am CT by Bob Sullivan

    We all know it often costs money to get your own money at an ATM machine; but now, you might have to pay up when you don’t get money. Let me introduce you to a fee you've probably never heard of -- the "ATM denial fee." Rejection, it turns out, can be costly.

    Some banks are sneaky; their ability to slip itsy-bitsy fees onto your monthly statement proves their creativity knows no end. The death-by-a-thousand-cuts draining of our bank accounts happens relentlessly -- $3.00 check enclosure charge; $2 out-of-network withdrawal fee; $10 for dipping below a minimum $1,000 balance for an afternoon; $13 for new checks. One of those fancy free checking accounts can easily cost $50-$100 a year.

    But the denial fee is a new entrant into this game, or at least, it is new to me and many industry insiders. Bank of America, on the other hand, says it's old hat. Either way, here's how $1.50 leaked out of my checking account for money I didn't get, and how it might be leaking out of your account too.

    Quick: What's your daily ATM withdrawal limit? If you said $400, you might be wrong. At Bank of America, for example, the limit is $300. The price of making that mistake is $1.50. That's what I found out last month when I tried to grab as much cash as I could before I hopped a plane to cover Hurricane Rita in Texas. Given other reporters’ experiences after Katrina, I decided to bring as much cash as possible. The ATM nearest the plane gate wasn't Bank of America, but I decided to pay the $4 or so in fees for using another bank’s machine.

    My first attempt to get $400 was denied and my transaction canceled. That's all I knew. I took my card bank.

    Moments later, I tried to withdrew $300, and was warned I'd face fees both from the machine owner and my bank for using the wrong ATM. Duly censured, I accepted the fee. And that, I thought, was that.

    It was, until I spied my bank statement a month later. I found that I was charged $2 for the cash I did get, and another $1.50 for the cash I didn't get. ATM Denial Fee, my statement read.

    "What is this?" I asked Bank of America's customer service telephone representative. I did not tell him I was a reporter. I was calling as a customer.

    The rep calmly explained that it was, in fact, an ATM Denial Fee. I must not have read the latest disclosure statement from the bank, he said. He then explained that Bank of America is charged fees by other banks when a withdrawal is attempted, whether it is successful or not. This bank-to-bank fee can be $5, $7, or even more, he said. He then explained to me that the bank actually eats close to 90 percent of these fees and is just trying to recoup some of the costs.

    To be fair, he agreed to wipe away the $1.50 fee when I told him the circumstances of the failed withdrawal. Still, I hung up wondering just how many people have been unknowingly paying these denial fees. I set out to learn more about them.

    'A new one on me'
    I called Tony Hayes of Dove Consulting, an ATM expert. He'd never heard of ATM denial fees, and he was skeptical that Bank of America would have to pay the $5-$7 that its customer rep quoted me for a failed withdrawal.

    Then I tried Greg McBride of BankRate.com, who studies ATM fees. His oft-cited reports are among the most comprehensive in the industry.

    "That's a new one on me," he said.

    But Betty Reese of Bank of America knew all about denial fees. In fact, she said, there's nothing new about them. The bank had been charging them "for some time." There was no updated notice earlier this year, she said. She also wouldn't discuss the intra-bank fees my customer service agent mentioned, but she did say she had no idea where he got his facts.

    Denial fees are spelled out on Bank of America's Web site.

    "The denial fee applies to each request to withdraw funds at a non-Bank of America ATM that is denied because the request exceeds either your available balance or your daily cash limit," the site says. I hadn't read it.

    It's unclear how many other banks charge such a fee. Washington Mutual’s Mary Kelley said her bank didn't charge denial fees; A spokesman for Citibank said the bank doesn't charge a denial fee. An Internet search revealed some smaller banks do have denial fees published on their Web sites. Bank of America's $1.50 was the steepest I found, however.

    'Wrong ATM' charges cost $4 billion a year
    McBride, from BankRate, was surprised to learn of this denial fee, but he did say something that is probably obvious to all of us -- bank ATM fees are at the highest rate ever. In fact, in a report he issued earlier this year, McBride said consumers pay $4 billion each year as a penalty for using the wrong bank's ATM. That's up 44 percent from 1999 levels, his report said.

    That's a lot of $1.50 charges. Revenue by 1,000 cuts.

    But we’re just trying to run a business, banks protest. In the past, I have heard the following arguments from banks: Consumers have more access to their money than ever before, and should pay a little for that. ATM machines are actually expensive to operate, and most banks lose money on them (see "Are there too many ATMs). And banks face fees from each other, so consumers should expect to cover some of that cost when they use the "wrong ATM."

    It all makes some sense, except that last point, which is hard to swallow. Banks may well be charging each other indiscriminate fees, but does that mean they should pass those fees on to us?

    'Gotcha' capitalism
    This is not a fair market. Consumers paying the fees often don’t have a choice. Often, they are forced to pay the fees when facing some crisis or time crunch, like I was leaving for the hurricane. That’s no time to change banks.

    This is the first example of a phenomenon we’ll discuss a lot in Red Tape Chronicles, something I call “gotcha” capitalism. You’re in a hurry to catch a plane, you don’t have time to refill that rental car tank – “Gotcha!” Suddenly, a gallon of gas costs $6. Oh, and that ATM transaction will cost you $5.50 -- $2 to the machine, $2 to your bank, and another $1.50 for a typo that made you ask for $400 withdrawal instead of $300.

    That’s not to say ATM fees are entirely unfair. Consumers shouldn’t expect to receive something for nothing. The convenience of getting cash from any bank’s machines is worth something. But when banks are charging something for nothing, then we know something is wrong.

    http://redtape.msnbc.com/2005/10/now_even_atm_de.html
    [/b][/quote]

    "Can't buy what I want because it's free...
    Can't buy what I want because it's free..."
    -- Pearl Jam, from the single Corduroy

  • #2
    Join a credit union.
    Damn these electric sex pants!

    26+31+34+42+44+46+64+67+82+06 = 10

    Bring back the death penalty for corporations!

    Comment


    • #3
      I sometimes see an amount on my reciept that says I can take out so much (I bank with Commerce) but never thought that if I take out over that I would be charged some other fee.
      Sponsor of:
      Brian Elliott
      Kolten Wong & the arch in the outfield grass at Busch Stadium
      5-29-14-House77 turns down offer of free beer from me

      Comment


      • #4
        I read before in Fotune magazine that ATMs are an unprofitable business for banks and they lose something like $250,000,000 per year on them (which isn't much, considering everything) but it isn't a money-making business, apparently, but one they have to engage in for customer retention.

        In Europe, you can do a lot more with an ATM, since their cards all have smart chips in them. You can add minutes to your mobile phone, pay certain bills, and do a few other things, all through an ATM. And you don't get charged out-of-network fees, which rocks!

        Official Lounge Sponsor of Erik Johnson

        Comment


        • #5
          QUOTE(*007* @ Oct 29 2005, 02:54 AM) Quoted post

          QUOTE
          In denial: ATM fee for getting nothing
          Posted: Friday, October 28 at 06:30 am CT by Bob Sullivan

          We all know it often costs money to get your own money at an ATM machine; but now, you might have to pay up when you don’t get money. Let me introduce you to a fee you've probably never heard of -- the "ATM denial fee." Rejection, it turns out, can be costly.

          Some banks are sneaky; their ability to slip itsy-bitsy fees onto your monthly statement proves their creativity knows no end. The death-by-a-thousand-cuts draining of our bank accounts happens relentlessly -- $3.00 check enclosure charge; $2 out-of-network withdrawal fee; $10 for dipping below a minimum $1,000 balance for an afternoon; $13 for new checks. One of those fancy free checking accounts can easily cost $50-$100 a year.

          But the denial fee is a new entrant into this game, or at least, it is new to me and many industry insiders. Bank of America, on the other hand, says it's old hat. Either way, here's how $1.50 leaked out of my checking account for money I didn't get, and how it might be leaking out of your account too.

          Quick: What's your daily ATM withdrawal limit? If you said $400, you might be wrong. At Bank of America, for example, the limit is $300. The price of making that mistake is $1.50. That's what I found out last month when I tried to grab as much cash as I could before I hopped a plane to cover Hurricane Rita in Texas. Given other reporters’ experiences after Katrina, I decided to bring as much cash as possible. The ATM nearest the plane gate wasn't Bank of America, but I decided to pay the $4 or so in fees for using another bank’s machine.

          My first attempt to get $400 was denied and my transaction canceled. That's all I knew. I took my card bank.

          Moments later, I tried to withdrew $300, and was warned I'd face fees both from the machine owner and my bank for using the wrong ATM. Duly censured, I accepted the fee. And that, I thought, was that.

          It was, until I spied my bank statement a month later. I found that I was charged $2 for the cash I did get, and another $1.50 for the cash I didn't get. ATM Denial Fee, my statement read.

          "What is this?" I asked Bank of America's customer service telephone representative. I did not tell him I was a reporter. I was calling as a customer.

          The rep calmly explained that it was, in fact, an ATM Denial Fee. I must not have read the latest disclosure statement from the bank, he said. He then explained that Bank of America is charged fees by other banks when a withdrawal is attempted, whether it is successful or not. This bank-to-bank fee can be $5, $7, or even more, he said. He then explained to me that the bank actually eats close to 90 percent of these fees and is just trying to recoup some of the costs.

          To be fair, he agreed to wipe away the $1.50 fee when I told him the circumstances of the failed withdrawal. Still, I hung up wondering just how many people have been unknowingly paying these denial fees. I set out to learn more about them.

          'A new one on me'
          I called Tony Hayes of Dove Consulting, an ATM expert. He'd never heard of ATM denial fees, and he was skeptical that Bank of America would have to pay the $5-$7 that its customer rep quoted me for a failed withdrawal.

          Then I tried Greg McBride of BankRate.com, who studies ATM fees. His oft-cited reports are among the most comprehensive in the industry.

          "That's a new one on me," he said.

          But Betty Reese of Bank of America knew all about denial fees. In fact, she said, there's nothing new about them. The bank had been charging them "for some time." There was no updated notice earlier this year, she said. She also wouldn't discuss the intra-bank fees my customer service agent mentioned, but she did say she had no idea where he got his facts.

          Denial fees are spelled out on Bank of America's Web site.

          "The denial fee applies to each request to withdraw funds at a non-Bank of America ATM that is denied because the request exceeds either your available balance or your daily cash limit," the site says. I hadn't read it.

          It's unclear how many other banks charge such a fee. Washington Mutual’s Mary Kelley said her bank didn't charge denial fees; A spokesman for Citibank said the bank doesn't charge a denial fee. An Internet search revealed some smaller banks do have denial fees published on their Web sites. Bank of America's $1.50 was the steepest I found, however.

          'Wrong ATM' charges cost $4 billion a year
          McBride, from BankRate, was surprised to learn of this denial fee, but he did say something that is probably obvious to all of us -- bank ATM fees are at the highest rate ever. In fact, in a report he issued earlier this year, McBride said consumers pay $4 billion each year as a penalty for using the wrong bank's ATM. That's up 44 percent from 1999 levels, his report said.

          That's a lot of $1.50 charges. Revenue by 1,000 cuts.

          But we’re just trying to run a business, banks protest. In the past, I have heard the following arguments from banks: Consumers have more access to their money than ever before, and should pay a little for that. ATM machines are actually expensive to operate, and most banks lose money on them (see "Are there too many ATMs). And banks face fees from each other, so consumers should expect to cover some of that cost when they use the "wrong ATM."

          It all makes some sense, except that last point, which is hard to swallow. Banks may well be charging each other indiscriminate fees, but does that mean they should pass those fees on to us?

          'Gotcha' capitalism
          This is not a fair market. Consumers paying the fees often don’t have a choice. Often, they are forced to pay the fees when facing some crisis or time crunch, like I was leaving for the hurricane. That’s no time to change banks.

          This is the first example of a phenomenon we’ll discuss a lot in Red Tape Chronicles, something I call “gotcha” capitalism. You’re in a hurry to catch a plane, you don’t have time to refill that rental car tank – “Gotcha!” Suddenly, a gallon of gas costs $6. Oh, and that ATM transaction will cost you $5.50 -- $2 to the machine, $2 to your bank, and another $1.50 for a typo that made you ask for $400 withdrawal instead of $300.

          That’s not to say ATM fees are entirely unfair. Consumers shouldn’t expect to receive something for nothing. The convenience of getting cash from any bank’s machines is worth something. But when banks are charging something for nothing, then we know something is wrong.

          http://redtape.msnbc.com/2005/10/now_even_atm_de.html
          [/b][/quote]
          [/b][/quote]
          Dude needs to proofread.

          Comment


          • #6
            QUOTE(gosha83 @ Oct 29 2005, 02:30 AM) Quoted post

            I read before in Fotune magazine that ATMs are an unprofitable business for banks and they lose something like $250,000,000 per year on them (which isn't much, considering everything) but it isn't a money-making business, apparently, but one they have to engage in for customer retention.

            [/b][/quote]

            How exactly can a bank lose money on an ATM?

            Comment


            • #7
              QUOTE(210 @ Oct 29 2005, 09:11 AM) Quoted post
              QUOTE(gosha83 @ Oct 29 2005, 02:30 AM) Quoted post

              I read before in Fotune magazine that ATMs are an unprofitable business for banks and they lose something like $250,000,000 per year on them (which isn't much, considering everything) but it isn't a money-making business, apparently, but one they have to engage in for customer retention.

              [/b][/quote]

              How exactly can a bank lose money on an ATM?
              [/b][/quote]



              Because they cost money to buy and service, and how much to they recover through those charges. (I guess)
              Be passionate about what you believe in, or why bother.

              Comment


              • #8
                QUOTE(madyaks @ Oct 29 2005, 10:19 AM) Quoted post

                QUOTE(210 @ Oct 29 2005, 09:11 AM) Quoted post
                QUOTE(gosha83 @ Oct 29 2005, 02:30 AM) Quoted post

                I read before in Fotune magazine that ATMs are an unprofitable business for banks and they lose something like $250,000,000 per year on them (which isn't much, considering everything) but it isn't a money-making business, apparently, but one they have to engage in for customer retention.

                [/b][/quote]

                How exactly can a bank lose money on an ATM?
                [/b][/quote]



                Because they cost money to buy and service, and how much to they recover through those charges. (I guess)
                [/b][/quote]

                I'm sure banks don't figure the savings of having less branches and tellers into those figures either...

                Comment


                • #9
                  When I banked with Mercantile in St. Louis, they charged me a transaction fee just for checking my balance at the ATM.
                  " Look, forget the myths the media's created about the White House--the truth is, these are not very bright guys, and things got out of hand."

                  Comment


                  • #10
                    QUOTE(210 @ Oct 29 2005, 09:23 AM) Quoted post

                    QUOTE(madyaks @ Oct 29 2005, 10:19 AM) Quoted post

                    QUOTE(210 @ Oct 29 2005, 09:11 AM) Quoted post
                    QUOTE(gosha83 @ Oct 29 2005, 02:30 AM) Quoted post

                    I read before in Fotune magazine that ATMs are an unprofitable business for banks and they lose something like $250,000,000 per year on them (which isn't much, considering everything) but it isn't a money-making business, apparently, but one they have to engage in for customer retention.

                    [/b][/quote]

                    How exactly can a bank lose money on an ATM?
                    [/b][/quote]



                    Because they cost money to buy and service, and how much to they recover through those charges. (I guess)
                    [/b][/quote]

                    I'm sure banks don't figure the savings of having less branches and tellers into those figures either...
                    [/b][/quote]

                    They absolutely don't count those figures into the equation; convenient of them.

                    Comment


                    • #11
                      You banks are all the same with your hidden fees and your service charges. Oh, no no no...no more banks. I'm keeping my blood in my freezer with...my money!

                      Comment

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