The BS Starts Here
Remember that great ad campaign Washington Mutual ran when they went fee-free on their ATMs? I thought it was quite clever - "The buck fity stops here."
Looks like they fired that ad agency this week - starting 11/17 they will charge fees on all their ATMs for users from other banks.
I find it pretty hypocritical to pull a stunt like that and reneg on it. The "we're different" message was strong. Of course I'm most annoyed because WaMu is the closest bank to work and I always got my money there. I use my Fidelity Brokerage as my checking account so it's rare that I get to a branch.
You can read the MSNBC article here.
Money quote: "Like most rivals, Washington Mutual does not break out ATM fee revenue. In the third quarter, depositor and other retail banking fees totaled $578 million, about 18 percent of the banks $3.29 billion of lending and fee income combined."
18% of their lending and fee income WITHOUT the ATM fees. No wonder "Bankrate.com estimates that U.S. consumers pay nearly $4 billion a year in ATM fees, with an average $1.40 surcharge."
I'm sorry, but this is a scam, always has been, and always will be. There is no way in hell that maintaining those machines costs nearly this much per customer.
My advice - take out at least $200.00 at a time and keep the money in a safe box at home until you need it. I know a lot of people who take out $60.00 at a time and pay the fee. That's a difference of $91.00 per year on fees. Make that mistake every year from 28 to 65 and you shortchange your retirement by $20,000*. Think it matters now?
* 8% average annual return from age 28 - 65 adding $91.00 each year to the total.
Busy pre-holiday week has kept me out of the blogosphere but I have gotten some interesting comments this weeks. One of them came from "Guest" regarding my personal policy of holding all of my money at Fidelity for simplicity of record keeping. Read
I was pleased to receive the first paycheck from my new promotion today. I'm bringing home about $250 more per pay period (2-weeks) which represents a nice increase. Beyond that I will receive a quarterly incentive package as well assuming our company makes revenue targets. Read
I'm often wary of the major credit agencies. They haven't won many points with me with all the lobbying they do to hold your personal information hostage and then charge you for access to "protection services". To me that's a bit like paying a cover ... Read
Fans of Keyes will remember the famous quote. I was reminded of it while reading the most recent Selected American Shares Update that arrived in the mail. More on the Selected American Shares fund here. Read
It is perfectly legal and ethical to charge non-revenue customers ATM fees. Your comment on doubting that the cost to maintain the ATM is less than $1.40 is moot. Where is it written that a for-profit company should only charge their costs? Why is bottles water so expensive? Because the market demands the product. Same with ATMs.
If you don't like the fees, go to your own bank's ATM.
JP - Thanks for the comment. I agree, I'm a capitalist to the grave. I still think it's a scam, but that doesn't mean they can't and shouldn't do it. Personally, I can't go to my own bank because I don't have one. I run all my money through my Fidelity brokerage account.
Regardless, I would likely give the same (your) answer if queried on any other day. The hypocrisy of the ad campaign and the subsequent removal of the campaign is what irked me the most about the WaMu case. The utter transparency of the whole thing is what makes it more scam-like to me. However, I'm also the guy who says oil companies can and should charge whatever they can get. So, I agree, and I'll call it a draw.
My main point should have been how to make sure the fees don't impact your savings as I mentioned at the end of the post. Point taken. Thanks for reading.
Take a look at E*Trade Coach--they'll credit your sweep asst for all ATM fees so you can run all your money through your brokerage and never pay a dime in fees (except commissions and expense ratios of course). However, you can't get into Fidelity Advisor Funds without paying a load.
Deep - Thanks for the tip. I realized a few years back that I wasn't reaching my full potential with managing my money because I had accounts all over the place, so I decided I was just going to pick Fidelity as my shop of choice and stick with them. Sure, I give up some points here and there ("Why don't you use Emigrant rather than Money Market?") and I have to deal with little headaches like this. But, overall, I think the value of all money in one house is higher than what I give up.
Thanks for reading!
Be very, very careful with putting all your eggs in one basket. All you need is one big scandal at Fidelity and there will be a "run" on the institution and you may be left out.
I just experienced it with Refco.
To summarize for you:
1. CEO hid debt and possibly lied about it.
2. Stock crashes
3. Everyone wants out, pulls money out of their trading accounts.
4. Refco loses liquidity, freezes accounts and bounces checks.
The big suprise: Refco does not have enough liquidity to pay people back. It now seems that Refco is claiming that customers accounts that had "real" money were in fact part of Refco's Debt that should be handled under their bankruptcy (i.e. wiped out).
Bottom line: People got royally screwed.
And this from one of the oldest and most "reputable" firms in the currency trading and futures business.
