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Ralph Nader > In the Public Interest > Fighting Back Against Outrageous Charges

Carol Hawes of Tacoma, Washington started collecting the letters she received from credit card companies and banks. She read them and then sent them to us with the following comments:

“I think it is about time the consumer got some protection from some of the things these companies are doing. A few years ago, it would have been called “loan sharks.”

Some of the practices include:

-Variable interest rates tied to ‘whatever’—it could go anywhere. Interest rates have been down for almost two years, but these continue to climb.

-You are penalized for paying it off early.

-You are penalized if the balance gets below a certain amount.

-Some of the interest rates are as high as 21%, and can go even higher.

– If your payment is two months late, the interest rate can go to the highest amount they would like to charge.

– Some applications state, they will decide what your interest rate will be after they receive your application.

-I see some real dire credit problems in the future as far as debt goes, for the people of this country, with the flooding of our mailboxes (and phone calls) with these applications. Too many of these people are low income and have a minimum education. Too many people don’t read the fine print.”

Even if they did. Ms. Hawes, what could they do–go across the street to another credit card company that has the same fine print or choose another credit card firm which may have just another diverse way to deplete your monies after it lures and hooks you.

The usury laws were repealed in the Seventies due to the bank lobbies and today state and federal bank regulators care little or not at all about the massive imbalance between customer and company.

The outrageous charges have taken on the characteristic of a corporate taxation system as the ever larger banks move to dominate the banking marketplace.

Jim Hightower, the radio commentator, recites one of the “tariffs” imposed by the giant Ohio Bank One: “Here’s their Account Reconciliation Fee, S25-an-hour, for the bank to correct their errors in your account. Want to put your cash in their bank? It’s a dollar per thousand bucks if you drop it off in the night deposit, a buck-and-a-half if you hand it to them over the counter. If you use a canvas bag to deposit cash, there’s a $2 handling fee: if you use a plastic bag, there’s a different handling fee….” There is even a $15 fee if you close your account. Hightower asks, “Shouldn’t today’s bankers have to wear ski-masks?”

Consider First Union–one of the worst bank chargers (for your letting them use your money to make their profits). First Union now charges customers 50 cents to talk to a computer after five free calls a month and two dollars to talk to a human after two free calls. Once again the banks are using your money and charging you through the nose.

What can you do? Bank at a credit union or at a small bank that is not as fee gouging. When you quit your gouging bank, make a big deal out of it even to the point of picketing the bank with your friends so you can publicize your reasons.

Then there is the organizing of bank customers. A simple law passed at the state or federal level to require all banks to carry an insert, at no cost to them, in their monthly statements, (paid for by a new consumer group under this law), which invites customers to band together into a statewide consumer group with a full time staff of watchdogs.

Residential ratepayers in Illinois began to receive these inserts in their utility company bills fifteen years ago and later in state government mailings. Two hundred thousand customers joined the Illinois Citizens Utility Board which has saved them billions of dollars.

If you want more information about this proposal for a bank customer group, write to Jake Lewis, PO Box 19367, Washington, D.C., 20036.

It is time for collective consumer action against billions of dollars yearly of gouging bank fees and other banking practices like your being required to bail them out when they become speculative or corrupt. Remember the half trillion dollar taxpayer bailout of the S&Ls a few years ago.