Checking Accounts Still Too Confusing, Study Finds
Los Angeles Times (CA)
June 8, 2012
New research by the Pew Charitable Trusts shows that checking accounts are still too confusing for many consumers, even though some of the largest U.S. banks have made recent improvements. The study indicates that disclosures for checking accounts are too long, some overdraft fees have risen, and disputes with banks drive many consumers into binding arbitration. The findings were released June 8 by Pew's Safe Checking in the Electronic Age Project. "Consumers must have understandable, transparent information that enables them to make educated choices when comparing one checking account's costs and benefits to another," said Susan Weinstock, the project's director. Compared to data from 2010, the report noted improvements but found them to be minimal. For example, the median length of checking account disclosures decreased from 111 pages to 69 pages. However, most information still is not conveyed in concise, easy-to-understand language. With overdraft fees, financial institutions largely failed to provide clear and detailed information about consumers' options for overdraft protection. The median overdraft fee for large banks was steady at $35, but an increasing number of checking accounts now have an extended overdraft penalty fee.
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