Rep. Weiner Survey, Banks Charging Fees to Bad Check Recipients

New York—According to a recent survey by Rep. Anthony Weiner (D-Queens & Brooklyn), many banks are charging high fees of up to $40 to victims who have received bad checks.

If one writes a bad check it is understandable that they would be charged a fee for the inconvenince caused, but those who are receiving a bad check, are being punished as well, and according to Weiner, banks are making a bundle charging the recipients of bad checks high fees, especially in New York.

HIGHLIGHTS OF THE WEINER BANK FEE SURVEY:

• Banks in New York City charge an average of $16.94 to the recipients of bad checks, an increase of nearly 27 percent over what the same banks charged in 2003 when the average fee was $13.34.
• Brooklyn Federal Savings bank charges recipients of bad checks a whopping $40 per check.
• Six other banks that charge over $35: Bank of America, Hudson Valley Bank, Sterling National Bank, Apple Bank, New York National Bank, and Flushing Savings Bank.
• Victory State Bank in Staten Island and Metropolitan National Bank were the only banks to not charge a fee for trying to deposit a bad check.
• Major New York City banks like Chase, Citibank, and HSBC charge $10 for every bad check received by a customer.

Weiner claims that banks have turned bounced checks into a cash cow by also charging fees to people who, through no fault of their own, receive bad checks. Called deposit items returned (DIR) fees, they put New Yorkers in potential double jeopardy every time they cash a check. If New Yorkers cash a bad check, they lose out on money from the bounced check, and the bank slams them with a high fee, even if it’s not their fault.

Rep. Weiner’s Innocent Check Depositor Protection Act will prohibit banks from unfairly profiting at the public’s expense by prohibiting them from charging DIR fees.

“Every time a New Yorker cashes or deposits a check that bounces, he or she is hit by a real double whammy,” said Rep. Weiner. “You don’t get the money you were counting on and the bank piles on with a high fee, even though it’s not your fault. It’s time for banks to stop charging DIR fees and cashing in on their customer’s misfortune.”

"So-called deposit item returned fees are among the most frustrating of the hundreds of stealth charges that banks use to punish consumers and fatten their profits," said Russ Haven, legislative counsel for the New York Public Interest Research Group (NYPIRG). "When a consumer or a businessperson innocently deposits a check they have every reason to believe is good, they shouldn't get whacked with a big fee if it bounces. The reality is that the processing costs to the bank are minuscule."