June 5, 2007. In a press release today, Bank of America Corp., which collected more than $22.4 billion in customer fee income last year for everything from using a competitor's ATM to
paying a credit card bill late, is launching a new effort Wednesday
ostensibly to help customers avoid those pesky fees.
It's an ironic campaign for the nation's second-largest bank since
more than half its annual revenue comes from non-interest income that
includes such fees. In the recently completed first quarter, growth in
fees and other non-interest revenue sources helped the Charlotte-based
company post a 5 percent earnings increase.
It's not clear if the bank thinks its online and in-branch
advertising campaign, called A little knowledge is a powerful thing,
will actually reduce income.
The bank said the campaign will complement online banking offerings,
which include e-mail alerts and mobile banking on cell phones. Similar
services are available at a number of banks, including New York-based
Citibank and Wells Fargo & Co. in San Francisco. But Bank of
America said its program accentuates how customers can use these online
tools to watch over their money and avoid fees.
"Customers told us they want simple ways to manage their money and
track their accounts when, where, and how they want," said Liam McGee,
president of the bank's global consumer and small business banking.
"We're encouraging customers to take control through a variety of
industry-leading tools and resources, all of which are free to them."
Nearly 60 percent of the $38.4 billion in non-interest income Bank
of America posted in 2006 came from service charges and credit cards
fees. In the bank's first quarter, about 30 percent of the its $18.1
billion in overall revenue came from service charges and credit card
fees.
Some consumer advocates argue that bank fees in general have become so widespread
and so high and simply educating consumers about how to avoid them
isn't enough.
"Education will not solve the fundamental problem that banks,
encouraged by their regulators, have a series of unfair and deceptive
practices designed to squeeze money out of people's bank accounts,"
said Ed Mierzwinski, consumer program director for the U.S. Public
Interest Research Group. "Banks are in the business of making money
hand over fist, anyway they can."
The Boston Globe reported in an article published on August 28, 2005, the contents of a BofA memo sent nationally to employees directing that overdraft fees not be waived, "under most circumstances, especially for people who rack up fees more than once per year." The memo was entitled, A Call to Action.
