Tuesday, November 1, 2011
Episode Demonstrates Consumers Have Power to Shape the Marketplace
Following weeks of consumer protest, Bank of America announced today that it is dropping its plan to begin charging consumers a monthly $5 debit card fee. Bank of America’s decision demonstrates that consumers can have a big impact on banking industry practices by joining together and making their voices heard, according to Consumers Union, the advocacy arm of Consumer Reports.
“Consumers have the power to make the big banks back down from unfair practices if they raise their voices and vote with their feet and their dollars,” said Norma Garcia, manager of Consumers Union’s financial services program. “In the end, Bank of America understood that it risked losing too many valuable customers by charging an unfair debit card fee.”
Bank of America’s announcement in September that it planned to charge most of its customers a monthly debit card fee beginning in 2012 sparked a huge public outcry. The public protest added significant momentum to a growing movement among consumers to transfer their accounts from big banks to credit unions and smaller community banks.
Over the past week, JP Morgan Chase, Wells Fargo, SunTrust Bank, and Regions Financial Corp. have all backed away from plans to charge monthly fees for debit card purchases. Bank of America was the only major bank left with plans to charge a debit card fee until it caved to public pressure today.
“The public backlash over debit card fees should serve as a big wake up call to banks that they can’t take their customers for granted,” said Pamela Banks, senior policy counsel for Consumers Union. “While banks may come back with other fees in the future, they’ll be gauging public reaction carefully. Consumers should be on the lookout for new fees and remember that if they’re not happy with how they are being treated, they should shop around for a bank or credit union for a better deal.”
Consumers Union has developed a set of tips to help guide consumers interested in switching their accounts to a new financial institution. The tips along with a “How-To Change Banks” video is available at www.DefendYourDollars.org
Contact: Michael McCauley, 415-431-6747, ext 126 (office) or 415-902-9537 (cell) or David Butler or Kara Kelber, 202-462-6262