Large Banks Taken To Task For Bank Fees

Large banks are feeling the venom after recent moves to charge for use of debit cards. Fact is, the ire that banks feel, — as well as other companies like airlines who charge for bags — is not too soon. A litany of companies have devised ways that quite literally nickel and dime consumers.

Such practices are certainly legal. And as Bank of America CEO put it: (those) companies have the right to make
money. The understated part of the story is that they risk damage or further damage to the brands that they hold dear, while competitors/detractors point out the dubious value of the businesses when their practices are held up to the light.

Bank of America was already taking heat as one of the institutions that took part in the bailout of late 2008. The bank has been hard-pressed for profit but the newest fee amounts to a gotcha fee more than a revenue generator. This, in lieu of the recent work by Congress to simplify credit statements is viewed dubiously at the very least.

While B of A and others certainly have the right to make money, and market-wise, B of A has a significant marketing presence, one has to question if they are focusing on the right kind of customers if they have to wage a fee war with some of the customers that they currently have. And what does that say about their brand when these types of tactics seem okay to these companies?

More importantly, what opening does it leave for competitors? Southwest Airlines has been lighting up airlines for bag fees with a multitude of media buys focused on making an issue out of bag fees. Plenty of airline travel is a commodity. As an industry, people begin to question the value of brands that compete at value price points but they tack on fees in what ends up being perceived as not understood at the least and pernicious at the worst. There are movers and shakers within the banking industry that could take of advantage of the banking relationship that some banks are willing to gamble away.

Quite possibly, these companies risk losing touch with current customers and changing or confirming what those customers suspect is most important. I mean, its not as if people wont pay top-dollar for some goods and services willingly, but making them perceive themselves as targets never seems like a good strategy.