March 16, 2010

Los Angeles Times, "Don't praise BofA for deciding to stop mistreating customers"

Lawmakers and consumer advocates have heaped accolades on Bank of America for its announcement that it will stop hitting customers with $35 overdraft fees any time they don't have enough cash to cover a debit-card purchase. It's understandable that folks who regularly criticize banks would want to hand out milk and cookies when they see something beneficial for consumers. But it seems pretty pathetic to sing a company's praises just because it's decided to stop mistreating customers.

I mean, is that how miserable things have gotten, that we honor businesses just for doing the right thing? That we reward them for saying they'll quit doing something they never should have done in the first place? In this case, BofA said the other day that it would stop imposing hefty overdraft fees for purchases as picayune as a cup of coffee or a candy bar. Instead, it will reject any debit-card transaction that can't be covered by a customer's checking account.

This is, of course, the only sensible way to handle such situations -- unless a customer has asked in advance for overdraft protection, in which case a service fee is clearly justifiable. In fact, consumer advocates have been saying for years that banks should stop reaching into people's pockets with these "gotcha" fees and should instead keep customers from getting into trouble in the first place.

Read the full article on the LA Times website.