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Bank practices drawing ire of customers

Some consumer-law experts are accusing big banks of unfair business practices, contending the financial institutions are making it too hard for consumers in Detroit and around the U.S. to sever their relationships with their banks.

Consumers angry about fees the banks charge for checking accounts and other bank policies have tried to leave their banks. But a consumers' group, in a newly issued report, said that banks have instituted obstacles that are making it tough for consumers to move accounts. It is possible that angry consumers could file a class-action lawsuit if banks do not voluntarily change some of their practices regarding account closures.

Bank customers who want to close their accounts first should open new accounts at their chosen bank, then transfer any direct deposits or automatic debits. Once that is done, old accounts should be closed.

The consumer group, however, said it has encountered these problems in trying to do so:

  • Banks offer new products to try to keep customers.
  • Banks charge fees to close accounts or transfer balances to other institutions if accounts have been open less than a specified period of time.
  • Some banks will reopen closed accounts. That means customers could owe penalties or monthly maintenance fees.

To try to put an end to such practices, the consumer group wants Congress to consider new laws to give customers better banking options. Those include:

  • Requiring banks to transfer any direct deposits or debits to a new account within 14 days.
  • Forcing banks to transfer funds electronically to other accounts on the same day as requested with no fee.
  • Prohibiting banks from charging fees to close accounts or reopening old ones.
  • Examining the possible of making bank account numbers transferable from an old bank to a new one.

Source: The Consumerist, "Report: Banks Make It Really Difficult To Take Your Business Elsewhere," Mary Beth Quirk, May 30, 2012

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