Study Finds 1 in 4 Banks Hide Fee Information from Potential Customers

A consumer group study released on Tuesday revealed that 25 percent of banks hide fee information from consumers interested in obtaining accounts. Hiding this information, the group says, violates an important act and makes it difficult for consumers to appropriately shop around for financial institutions.

Some Banks Fail to Disclose Fees

According to “Big Banks, Bigger Fees: A National Survey of Bank Fees,” conducted by the Public Interest Research Group (PIRG), one in four banks don’t allow consumers to learn the price of doing business because fee schedules are unavailable to them before they sign up.

PIRG conducted a “secret shopper” study by sending staff members to 392 banks and credit unions in 21 states. The group also reviewed online fees at banks over the past six months.

The secret shoppers discovered the following:

• 38 percent of banks produced fee schedules after the first request.
• 55 percent complied after three requests.
• 25 percent provided incorrect information.
• 23 percent never produced fee information.

The study also found that while some smaller establishments were guilty in some cases of not providing the correct information in a timely fashion, for the most part, “local community banks and credit unions are more likely than national banks to provide fee schedules.”

Failure to Disclose Breaks Truth in Savings Act

According to the report, virtually no banks made fee brochures available, but when asked, many tellers could produce the information. This failure to provide the information beforehand is in violation of the Truth in Savings Act, which requires banks to disclose up-front fees before someone opens an account.

What’s interesting is that the study mirrors results from a study conducted by Congress’ Government Accountability Office in 2008, which was responsible for setting the Truth in Savings Act into motion in the first place.

With banks ending free checking left and right, fee disclosure is likely to become more important than ever. Hopefully the release of the PIRG report will encourage more banks to disclose fee information as required by law.