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Home Industry Banking & Finance 5 Ways Your Bank is Ripping You Off
Banking & Finance - August 11, 2022

5 Ways Your Bank is Ripping You Off

The majority of individuals deposit their money in banks because they believe doing so is safe, secure, and in some circumstances profitable. However, they fail to realise that every bank is in business to generate as much profit as possible, thereby ripping you off in the process.

Therefore, whether you go to a bank to save your money or go there to get a loan, you are giving them the chance to make more money, and it will undoubtedly come from you.

The truth is every bank makes an extra effort to rip off their customers by using legal techniques whenever possible.

Some banks even use unlawful methods to steal their customers’ money, especially when they are convinced that the customer won’t catch them red-handed.

Here are five ways your bank is ripping you off.

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1. They give out carefree information about bank fees and hidden charges

Banks are in business to make money, and they prey on gullible customers in an effort to do so.

One method used by banks to defraud you of your money is to treat information concerning bank fees and hidden costs lightly purposefully.

Bank-affiliated marketers have received particular training in how to persuade customers to accept loans, pay off overdrafts, open special accounts, and sign other special contracts without emphasising the fees and other costs involved.

Make sure to ask all the questions that will help you have a solid understanding of all the bank costs and any other hidden charges in order to avoid this from occurring to you. You can back out of the deal if you don’t feel comfortable with it. Only when you have access to information can you do that.

2. Encourage the use of predatory payday loans (Cash Advance Programs)

Source: WIRED

Banks have trained their marketers to pressure consumers into taking out loans even though they know they have the ability to pay them back because the interest from loans is one of the ways banks generate revenue. 

In fact, banks encourage staff members with pay accounts to use them to obtain cash advances. 

Most of these employees will believe that the bank is helping them when, in reality, it is out to take advantage of them. You must make sure to steer clear of cash advance programmes as much as possible in order to prevent this, and then make an effort to live within your means.

3. Intentionally handle mortgage paperwork incorrectly

Banks also intentionally mismanage mortgage paperwork by allowing needless red tape to be added to the application review process.

Additionally, banks make sure that they pay property taxes later than they should, put off cancelling private mortgage insurance, and even purposefully put off communicating about the progress of loan modifications.

To avoid this from occurring to you, be sure to keep a close eye on every step of the mortgage process and regularly check your bank statements to make sure everything is going according to plan.

4. Opening a new account    

Source: Fidelity Bank Plc

The problem that most bank customers face is that they don’t care to read all of the terms and conditions that are provided to them when they wish to conduct a transaction with a bank. A bank may defraud you without carefully taking this into account.

Therefore, it is crucial that you take the time to read through the terms and conditions of any bank before opening a new account. Make sure you comprehend how the system operates, the interest rate, any subcharges, and any other hidden fees that you may not be aware of.

5.  Encourages the use of financial instruments that have costs, such as ATM cards and chequebooks

Most bank products, including ATM cards, chequebooks, and other items, have hidden fees associated with them. Therefore, banks do their best to get customers to use these items. This is one of the ways banks defraud customers. 

For instance, some banks charge a fixed SMS rate to their customers in addition to additional fees when they use their ATM cards or request chequebooks.

Make sure to use online banking; it is more cost-effective because there are fewer fees than ATM and check transactions. This will help you avoid all the hidden fees that you are unaware of.

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