What the USAA ad didn't mention
"pfblog reader" left a few comments and questions on an earlier post ("Bait and Switch: USAA Federal Savings Bank"). Despite the fact that USAA is raising fees as much as 400%, he or she seems to be supportive of USAA. He/she suggests there may be a very good reason for raising the photocopying fee from $1 to $5:
Does USAA offer electronic access to scanned checks and past statements? If so, then maybe the copying fee is sort of a discouragement to prevent people from asking USAA to do something that the customer could just print off the webpage? In that way, I can see why the statement copy and photocopying fees are that high. I would imagine that it is not because photocoying something costs $5, but that they have to hire someone to do this [obsolete?] job ...Interesting, but that doesn't make much sense, as customers are sent printouts of their statements and cashed checks every month, and they are free, at least for the type of checking account I have. Of course, there must be some reason behind USAA doubling and quadrupling fees, but they did not explain it in any of the documentation I was sent.
The comment by pfblog reader brings up another point, about the marketing material that highlighted the features of the accounts:
I didn't see any of the adverts that touted the low fee checking accounts--did they publish the old fees (for statement copies, etc.--the ones you listed in the post) as examples of these low fees? If so, then that does seem like bait and switch. Most of the "low fee" checking account adverts I've seen, though, tout the low fees associated with minimium balances, electronic bill pay, and stuff like that. If they didn't cite these as specific examples, then I'm not so sure the bait and switch argument is as strong. If someone didn't even know what the cost was before, then maybe they don't care about it or at least it didn't "bait" them into signing up for the checking account. Right? If you don't see the bait, then how can it bait you?Hmmm. What exactly did the advertisements say about low fees, back when I signed up? I went into my basement, and dug out last year's bank paperwork to examine the marketing material that USAA used to lure me and other USAA members to register for Federal Savings Bank accounts.
And you know what? It turns out the advertisement didn't say anything about low fees.
It said "no fees".
That's right, no fees. Not "no fees" with an asterisk, or "no fees, except for certain types of bank services." No fees, period. Here's the text of the advertisement, which is featured on page 4 of a little booklet entitled "Your Guide To Banking at USAA":
Put your money to workThere are then nine bullet points describing some of the features of the account, and urging people to sign up. Only one of them mentions fees:Checking. Pay no fees, optimize cash flow.
You'll never need to change accounts again. Our no-fee checking account will follow you no matter where you live or travel. Enjoy no monthly service fees, no minimum balance requirements and unlimited check writing privileges.
Automatic refunds every month on fees other banks charge for using their ATMs.This bullet also refers to some fine print at the bottom of the page, which says "No charge for the first 10 ATM withdrawals at non-USAA ATMs per monthly statement cycle; additional withdrawals are $1 each. USAA Federal Savings Bank will refund up to $15 for ATM surcharges incurred per account, per statement cycle."
Still, there is no fine print talking about photocopying fees or any other fees. I am sure a lot of people read that and said -- "Sounds great, sign me up!"
But wait. On page 16 of the booklet there is a "Service Fee Schedule". Are these applicable to the checking account? It's not clear. There is no reference to these fees on the page 4 advertisement, nor is there any indication on page 16 about which accounts the service fee schedule applies to -- there is USAA savings account, CDs, and IRAs described in the booklet.
So, pfblog reader, there's the bait: A bank account that's described as "no-fee checking", but actually has fees, which seem to rise very significantly every once and a while.
Notably, the USAA Web site still describes this account as "No Fee Checking," and the fine print on that page does not mention the service fee schedule. If I were USAA, I'd think about changing the name of this account, making the presence of fees very clear to prospective customers, and taking a hard look at how new services are marketed to members. Customers don't like being misled. Deceptive advertising, and unexplained major fee increases are resented by customers. If repeated, they could erode USAA's status as one of America's most trusted companies.
Caveat emptor!
Related Posts:
Bait and Switch: USAA Federal Savings Bank
USAA responds to Fidelity Observer with a playground insult
A corporate partnership that's useless for consumers
BOA customers beware: More nickel-and-diming ahead!
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