Bank of America charges exorbitant overdraft fees. I have been charged overdraft fees on transactions as small as $.02. They also:
1. Prey on the most vulnerable, usually the poor, who can least afford to pay these fees;
2. Process the largest transaction first when posting transactions for any given business day so that the consumer ends up paying more overdraft fees. For example, if you had $100 in your account, the bank would first process an $101 charge followed by two smaller charges of $5. So you would get charged 3 overdraft fees in this way. If they processed the 2 $5 charges "first," then you would only receive 1 overdraft charge;
3. The bank has a history of being very strict about waiving these fees. Google Bank of America overdraft fees Boston Globe. You will find a memo corporate sent to branches advising them not to waive fees;
4. The bank does not offer an opt out mechanism for so-called "courtesy" pays on overdraft items. E.g. you cannot tell the bank to just deny any charges that would result in overdraft and thus the overdraft fees;
5. The bank does not disclose its revenues from these fees, but we can surmise that the bank makes huge profits on these fees again typically from the most vulnerable from a financial perspective, e.g. people living on the financial edge paycheck to paycheck.
I would recommend that anyone in the Boston area or beyon openh a Fidelity MySmart Cash Account. They don't charge overdraft fees, they waive fees that any bank charges you for ATM cash withdrawls, no fees for checks, etc. They also pay interest on your deposits, and you may get access to your direct deposit one day earlier than you would with a traditional bank. The only disadvantage, and literally the only one I've found, is they will take 4 days to clear even an in state check that you present for deposit. However, direct deposits clear immediately.
If anyone can suggest another local bank that does not have these overdraft fees, please add a comment. I would like to close my BOA account and open an account with another local bank e.g. for depositing checks, etc. But 95% of the banking is done through Fidelity.
You can also find more about this Fidelity account in the Boston Globe archives.
I would also be very interested in any legislation, class action lawsuits, or public relations campaigns against BOA or other institutions that charge these predatory fees that resemble fees from loan sharks, or payday lenders.
BOA is basically a legalized loan shark in this regard. I have more respect for a traditional loan shark for at least they will admit they will wrip you off. The spin BOA puts on these practices is deplorable and just as bad as any criminal or actually worse than organized crime or a petty street criminal!
South Boston, Massachusetts