Bank’s “Trojan Horse” Sneaky Fee Strategy
by Gina Ragusa
Mounting news reports of massive bank fees and poor customer service would make many believe that banks are losing their stranglehold on the American consumer, however Jim Blaine State Employees Credit Union ($25 billion, Raleigh, NC) President isn’t buying it.
“We’re (credit unions) losing this fight despite the stories on sneaky bank fees and angry consumers,” Blaine says. “Credit unions and consumer advocates are losing the war against financial literacy and consumer advocacy, and the problem with fees is that the consumer can’t get a grip on an apple to apple comparison cost. Fees are the very visible irritant, but the problem is that the consumer cannot make a comparison.”
He uses auto financing as the perfect example of how sneaky fees can easily overtake a vast majority of consumers. “If confronted with two ways to finance your next car which would you choose, manufacturer or bank financing at 0% or financing through your credit union at 2.5%?”
Blaine says that what some consumers may not know is that what you see is not what you get with those 0% offers, whereas at a credit union costs are up front. “We see what appears to be a good deal with the 0% rate and allow ourselves to be sprinkled with the pixie dust and go with what we believe will save us money, when in reality is costs us more in the end.”