Bank accounts are intended to be secure places where you can invest your money and not worry about it going missing. Carrying cash around is dangerous, both because you’re vulnerable to theft, but also because if you lose it, you have no recourse. The benefit of entrusting your money to a bank is that you have all kinds of different protection. If your identity is stolen, the bank can assist you with fraudulent charges on your checking account. Certain services are offered, such as alerting you if your balance drops below a certain level. However, unfortunately, there are lots of ways that banks also prey on their own customers, with hidden fees and complicated processes. Not all banks are created equal, of course, but there are many tactics to get you to pay up for penalties that are almost universal amongst financial institutions. Here are four common ways that you get scammed out of money by your bank to watch out for.
ATM fees are the number one money drain on any bank account. If you can’t access an ATM that belongs to your bank, you can get charged anywhere from $2 to $5, depending on what kind of fees are associated. Oftentimes, also, you’ll actually get charged twice, because there’s a fee from your bank, and then an additional fee from the issuing vendor the ATM belongs to. If you can take out money from your own bank at any given time, do so. This is especially important if you’re out or traveling, and you don’t know when you’re going to turn into your bank again. Sometimes, if you belong to a credit union, your bank won’t even exist in a different state or country. Always keep in mind where you’re going and what kind of ATMs will be available. If you’re wondering how much money ATM fees eat out of your budget, look at your bank statement and add up the amount. If you find yourself frequently taking money out of off-brand ATMs, you might be shocked at sum of fees.
Overdraft fees are one of the worst types of penalties you can incur from your bank. These fees are pricey, and add up very quickly over a period of days. See The Chart – Overdraft Fees By Banks. There have actually been recent lawsuits filed against banks that would charge hefty overdraft fees every day that an account was overdrawn. Now, these fees are usually restricted to a single overdraft fee no matter how many days the account is overdrawn, or there’s a maximum amount that the bank can charge you. Nevertheless, if this happens to you frequently, you might as well be burning your money. If you live paycheck to paycheck, sometimes overdraft fees are inevitable, especially if you need a check to clear. However, if you can prevent this from happening, do everything in your power to avoid it because it put a massive dent in your budget. Monitor your balance carefully, and always remember if you have any automatic deductions coming out for bills or other costs. Watch out for other fees, too, like ATM fees dipping your bank balance below $0. All it takes is a random $2 ATM fee when your balance is extremely low to actually cost you far more in an overdraft fee.
Expensive Credit Monitoring Programs
Once upon a time, credit monitoring was a new trend. With the rise of identity theft, consumers became increasingly interested in monitoring their credit report on a more regular basis than just checking it for free once per year. There are lots of special credit monitoring programs that are offered by both banks and credit card companies. However, any program that makes you pay for credit monitoring is a scam. There are many creditors that offer free credit monitoring as a perk for being a customer, and you shouldn’t have to pay for it. Banks also offer this feature with certain account packages. However, if you have a basic checking account and credit monitoring isn’t part of the deal, don’t buy into it. Rather, look at your different credit card companies and see if there are any that offer the service free of charge. This is becoming more and more common.
Fraudulent Charges Paperwork
Although many banks will remove charges you claim are fraudulent and award you a temporary credit, they also require you to fill out a huge amount of paperwork. While this is somewhat expected, they make it as difficult as possible to complete. Many banks will only send the paperwork through the mail, and then will require lots of different documentation, regardless of what the amount actually is. If you’re disputing a $10 charge, you’ll be required to fill out the same amount of paperwork as someone disputing a $100 charge. Just make sure you go through the process, or else you’ll get ripped off.