Gephardt: Study Shows Banks Earn Billions From Avoidable Fees

Jun 4, 2021, 6:15 PM | Updated: 11:21 pm

SALT LAKE CITY — If you are paying anything more than zero dollars towards bank fees, experts warned you have already paid too much. This, as a new study finds banks are earning more from those fees than they are paying in interest to their customers. But as the KSL Investigators discovered, bank fees are avoidable.   

The MagnifyMoney study painted a greedy picture of banks: “Banks Collected $114 Billion More in Fees Than They Paid in Interest Over the Past Decade.” 

The man who conducted the research said it was not that sinister because fees are completely in our control.  

“Consumers have to be on their feet,” said Ken Tumin, founder of DepositAccounts, a bank account comparison website.

Tumin said he hopes his research will serve as a wake-up call to consumers who are paying bank fees when they really do not have to be.  

Ken Tumin, founder of DepositAccounts. (KSL TV)

Banks make a lot of money on the fees their customers pay for, things like bouncing checks, continuing to receive paper statements, or in some cases, even just for the privilege of having an account.

The average bank fees per deposit account is $60.75, which added up netted banks close to $350 billion in the past decade.  

“You definitely want to avoid those fees,” Tumin cautioned.  

Howard Headlee, president of the Utah Bankers Association, weighed in on Tumin’s study.

The KSL Investigators asked him if it makes banks look greedy.  

“Yeah, but if you look at the numbers, you will see that the fees have been incredibly flat the last ten years,” Headlee responded.  

That is true. In fact, fees actually ticked down a bit in 2020, with banks cutting customers some slack during the pandemic. Still, Headlee agreed: bank customers should be able to avoid paying bank fees.  

“If you’re paying a fee, you’re doing something wrong, and you need to acknowledge that and work with your bank,” said Headlee. “Say, ‘What do you want me to do? What product is there for me that can help me avoid this fee?’ They’ll tell you.” 

If all else fails, here is some advice you might be surprised to hear from a guy who speaks for banks: don’t be afraid to fire your bank and take your business to the bank across the street.  

“Listen to the fees. React to the fees. Find something that works for you,” Headlee advised.  

One important note about fees: banks say they do not need them to keep the doors open. The lion’s share of their money is made on loans.

Banks argue fees are a good thing because they punish just the person who incurred the fee for doing something wrong. For example, if I over-drafted my account – that costs the bank money, and if the bank declined to slap me with the fee, it means everybody who banks there would end up having to pay for it.  

The American Bankers Association does have some tips on how you can avoid fees

The big one here is simply not spending more money than you have. The ABA said keeping track of transactions and account balances will help you avoid sending your account into negative territory and then paying overdraft fees. It’s always a good idea to keep a cushion of money in your account to help avoid accidental overdrafts.

Other tips include using only your bank’s ATMs or those affiliated with your bank, as well as sign up for an automatic text alert when your balance falls below a certain amount. 

KSL 5 TV Live

Top Stories

KSL Investigates

A bus driver fills up at a gas station in Brooklyn on August 11, 2022 in New York City. While fuel ...
Matt Gephardt

Gephardt Busts Inflation: Ways you can save money at the gas pump

Inflation remains high for several reasons and one of the biggest is tied to gas prices. But you can bring down the price you pay with some relatively simple changes in your driving habits.
2 days ago
KSL’s Matt Gephardt fuels up his minivan to determine how much gas Google Maps’ eco-friendly ro...
Matt Gephardt & Sloan Schrage

Gephardt Busts Inflation: Can Google’s eco-friendly routes really save you gas money?

Gas prices have edged down from their record highs, but they are still a far cry from being affordable for many Utah families. So, when Google rolled out a new feature for its Maps navigation app that says it can save you money on gas by using suggested eco-friendly routes, the KSL Investigators decided to put it to the test.
3 days ago
FILE: Back-to-school shopping (Photo by Justin Sullivan/Getty Images)...
Matt Gephardt & Sloan Schrage

Gephardt Busts Inflation: Saving $ on back-to-school supplies with inflation

With inflation running amok this year, parents are tackling big price hikes on top of the stress. Fortunately, there are ways they can still save money.
6 days ago
Matt Gephardt & Sloan Schrage, KSL TV

KSL Investigators help bank customer regain access to his money after fraud incident

KSL Investigators help a fraud victim gain access to his bank account after nearly a year of being locked out.
9 days ago
Matt Gephardt & Sloan Schrage, KSL TV

What are the rules for airline travel credits?

After canceling a beach vacation to Hawaii, a Utah woman believes she has $1,400 in flight credits. Ongoing flight cancellations have plagued the summer travel season, and a lot of travelers are being made whole with flight credits rather than refunds.
10 days ago
FILE PHOTO - Shown are a smartphone and computer....
Matt Gephardt

Can a company pull the rebate runaround?

When a West Valley City woman took up Verizon on a rebate offer to upgrade but could not get the rebate, she contacted the KSL Investigators for help.
16 days ago

Sponsored Articles

tips how to quit smoking...

7 Tips How to Quit Smoking | Quitting Smoking Might be One of the Hardest Things You Ever Do but Here’s Where You Can Start

Quitting smoking cigarettes can be incredibly difficult. Here are 7 tips how to quit smoking to help you on your quitting journey.
Photo: Storyblocks...
Blue Stakes of Utah 811

Blue Stakes of Utah 811: 5 Reasons To Call 811 Before You Dig When Working in Your Yard

Call before you dig. Even at home, you could end up with serious injuries or broken utilities just because you didn't call Blue Stakes of Utah 811.
Days of...
Days of '47 Rodeo

TRIVIA: How well do you know your rodeo? Take this quiz before you go to the Days of ’47!

The Utah Days of ’47 Rodeo presented by Zions Bank is a one-of-a-kind Gold Medal Rodeo being held July 20-23, 25 at 7:30 PM. The Days of ’47 Rodeo How well do you know your rodeo trivia? Take the quiz to test your know-all before heading out to the Days of ’47 Rodeo at the […]
cyber security through multi factor authentication setup...
Les Olson IT

How multi factor authentication setup helps companies stay safe

Multi factor authentication (MFA) setup is an important security measure that every company should implement for their workers. It’s also wise to install it for your personal and home accounts.
Lighting Design

Check out these stunning lamps with stained glass shades

Lamps with stained glass shades are statement pieces that are more than simply aesthetic. They also meet a functional requirement: to light up a room.
Address Bar of internet browser shows internet access...

Utah voters 50+ support increased access to Internet

The AARP surveyed Utah voters aged 50 plus about internet access and if they support the expansion of broadband, especially in rural areas currently lacking it.
Gephardt: Study Shows Banks Earn Billions From Avoidable Fees