Banks // Current TV

Tax Loans Can Hurt

Tax Refund Anticipation Loans - huge help or huge farce?

karney
added this
4 years ago
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2 comments

A similar thing happened to me about a month ago. My husband and I have three accounts with our bank, two personal and one business. I've have a relationship with our bank for over ten years, and during that time none of the accounts I've managed had ever gone into the red. With a longtime track record of being a model customer, I was therefore very upset when the bank chose to penalize me when a snafu occurred.

One of our checks was accidentally deposited into the wrong account, which caused it to go overdrawn when checks we had written cleared. Even though we had more than enough money to cover the checks over the three accounts we had with the bank, the bank decided to return three checks, which, if they had cleared would have created an overdraft of less than $250. The bank then charged us $36 per check for the privilege of refusing to honor them. In addition, we faced check return and late payment fees from our car insurance, phone and credit card companies because of the bank's actions.

I was particularly upset that the bank hadn't bothered to call me (which they did regularly to confirm other transactions), or taken my highly responsible banking record into account before they decided to bounce the checks. Had they called, the situation could have been resolved instantly with a transfer between accounts. Instead, it seems to me, the bank saw an opportunity to make a quick buck ($108 actually) and took it, charging me fees, and putting my good credit, and car insurance policy, at risk in the process.

My initial complaints fell on officious and intransigent ears. The bank refused to refund the charges, insisting that they "couldn't" rather then "wouldn't" do it. Luckily for me, they'd erroneously mailed someone else's overdraft notice in the same envelope as mine, so with this as leverage, I agreed to do the right thing and hand over "John Doe's" letter on condition that the bank did the right thing and rescinded my fees.

But the episode left a very bitter taste in my mouth, and got me thinking about those less fortunate than myself, for whom the system is particularly unfair. Just one of the three fees the bank had taken from my account, without my permission, was the equivalent to the best part of a day's pay for someone on minimum wage. Put the three together and it's well over half a week's salary for the hard working poor. How can that be fair?

With such sharp practices these banks are no better than loan sharks. And with the economy in crisis, such money generating policies are likely to increase as the banks desperately try to claw back the funds they've been forced to write off due to the mortgage fiasco we're in the midst of right now. Once again the consumer is paying (dearly) for the mistakes fat cat, big business has made.

So what can we do? Certainly it's all our responsibilities to refuse to take such treatment lying down. The banks are only able to charge such outrageous fees because on some level we allow them to get away with it. Next time you get an unfair charge, call the bank on it. You may be able to afford to eat it, but the person standing in line behind you might not, and, as a society, we stand or fall together. If one employee refuses to help, refuse to be brushed off. Ask to see their superior, and if they can't help, ask to see theirs. Threaten to close your account down and take your business elsewhere, and DO IT if they fail to offer an acceptable resolution.

If all else fails, take a leaf out of Hatch's playbook, and take your bank to small claims court. As Ralph Nader says, "If a million consumers filed a million small claims court actions a year against the banks, the banks would either try to abolish the small claims court or try to improve their performance." Perhaps it's our responsibility to put that theory to the test. Once we've knocked the banks into shape, my next raison d'être will be local councils and the parking fines they charge. Try paying those on a minimum wage!A similar thing happened to me about a month ago. My husband and I have three accounts... more

AndreaKnoll
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4 years ago
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4 comments

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resolute
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4 years ago
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0 comments

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uroborus8
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4 years ago
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4 comments

How legal is having the Federal Reserve print U.S. money? Why not have the U.S. Treasury do that!

What do we do about the Fed showering the US with an ocean of currency?
*Dow Theory Letters, by Richard Russell, February 27, 2008:
"I want to be honest about this. I have always objected to the very existence of the Federal Reserve. The Fed was sneaked into the system during 1913. The Fed was organized by a secretive group of bankers, and it was steered through Congress under very suspicious circumstances. The Fed, in effect, is a private banking monopoly. The original idea of the Federal Reserve, following close on the Panic of 1907, was to allow for an elastic monetary system. The Federal Reserve act turned over to certain banks control of the monetary system of the United States. Its legality was never placed before the Supreme Court. Nor was the Federal Reserve even presented to the American people as a Constitutional amendment.

Under the Federal Reserve system, monetary discipline is exercised via a group of bankers and advisors. Before the advent of the Fed, monetary discipline was brought about by gold. In 1971 Richard Nixon took the US off the gold standard. Now "we're all Keynesians," he said. Once having removed the discipline of gold, inflation in the US accelerated and the dollar lost purchasing power year after year.

Let me be blunt -- if it was up to me, I'd get rid of the Fed and have the US Treasury issue its own money. Had we stuck to this process in 1913 and thereafter, we'd have much less inflation, we might have had the same number of recessions, the nation would be on a much more stable basis, and there'd be little need for an income tax. Finally, the US would not be pressured by a national debt that has now reached the absurd total of over $9 trillion.

But the reality is that we do have a central bank that we call the Federal Reserve. And the Fed is charged with two duties -- guarding the purchasing power of the dollar. And insuring that the nation is prosperous. The Fed is entrusted with those two tasks.

Ben S. Bernanke, the latest Fed Chief, has moved into the Fed Chairmanship at a difficult time. The previous Fed Chairman, Alan Greenspan, left the nation in a precarious state. Greenspan left his job with housing and the big banks in arguably their worst condition in US history.

Bernanke, a former Princeton professor, is an expert on the Great Depression of the 1930s. He is also an expert on the long Japanese recession of the 1990s. Bernanke is well aware of the danger of deflation. Bernanke knows that once deflation holds the economy in its grip, it is difficult and close to impossible to turn the situation around. The Fed can create inflation, the Fed can dampen inflation, but it is far from certain that the Fed can turn deflation around, once deflation is well-established in the economy.

The fact is that Bernanke does not want to find out whether the Fed can turn deflation around. So what's the best defense against deflation. In a word -- it's inflation. You inflate in order to forestall deflation.

Question -- Is Ben S. Bernanke doing the right thing?

Russell answer -- Under the current system, which is the only system we have, yes, Bernanke is doing what he's being paid for. He's charged with keeping the nation prosperous, and he's trying to do that. He's also charged with guarding the purchasing power of the dollar -- well, right now it's not possible to do that -- so he'll have the various Fed governors telling anyone who will listen that "inflation isn't that bad."

OK, fine -- but what should you and I do? We will deal with reality and try to protect ourselves from the loss of purchasing power due to inflation. To protect ourselves we buy gold and we buy silver."
What do we do about the Fed showering the US with an ocean of currency? *Dow Theory... more

resolute
added this
4 years ago
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7 comments

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pressrecord
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4 years ago
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8 comments

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jubal
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4 years ago
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0 comments

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abbym0308
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4 years ago
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4 comments

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lib
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4 years ago
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0 comments

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abbym0308
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4 years ago
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5 comments

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