The Fee Strategy banks use

I was on the phone with Chase at lunch (big surprise) because I continue to find that our banking system is more and more reliant on fees to drive profits. And, they customer service surpervisors take no issue being blatant about this. In the supervisor's words "When Chase charges you a fee, in this instance being an overdrawn account, we pay the fee first, then the vendor where you used the card". She went on to explain that I should learn how to keep a balanced check book. All this because it took them 10 days to process a check that I sent to my sister and by the time it cleared it bounced - and then took 2 days to show up on my account online when Chase charged me $32 for the instance and drove my account into the red.

Let's consider banks. You call them, and have to punch in 3 numbers now to talk to anyone. An account number, soc security # and a "password". Then, when one of the numbers is entered wrong you have to do it all over again. This is what I compare to conquering a castle - not only do I have to get through the woods, and cross the moat, but then I have to take out the huge gate - all while fighting with time and frustration of the arrows...can you tell I am frustrated? Then you get to talk to a customer servce rep that cannot do anything, and once you talk to the supervisor, you become a 2 yr old. They use child-like tactics to express their position and then I have to finally ask if I am going to get a refund...Not an industry that has a lot of upside to me.

In curiousity I took a look at Chase's annual report, to understand the "fee strategy" in place
- Lending and Deposit related fees in 2005 were $3.38 billion, up 27% from 2004. Wow!

What do others say on the subject of "consumer banking"?
- The average bounced-check fee is now $27.40, a record high, according to the
fall checking study by consumer finance Web site Bankrate.com.

What's interesting is that Wal-Mart could totally revolutionize the industry. If they applied their low-cost structure to banking, I can only imagine the uproar, and hopefully peer pressure it would have on other large banks to drop their fees. I mean, $36 charge for insufficient funds per transaction along with $10 a day?! That is practically robbery. And a Wal-Mart atm at every location - why would you need to bank anywhere else?

Its hard anymore to know who to trust. When a bank has control of your finances, and can just add and subtract fees, deposits, etc from a call station in the phillipines, there is certainly not enough control left in the customer's hands.