Most people put their monies in banks because they feel it is safe, secured and in some cases profitable to do so ignoring the fact that all banks are in business to make profits and more profits as long as they have the opportunities to do so. So if you go to a bank to save your money or visit a bank to obtain loan, you will be providing them with the opportunities to make more money and definitely it is going to be from you.
The truth is that all the banks try as much as possible to make use of legal means to rip people off their monies; some banks even adopt illegal means to rip their customers off their money especially when they know of a certainty that the customer will never suspect them to do so. The challenge most people who make use of banks make is that they care less when it comes to reading all the terms and conditions presented to them when they want to carry out a transaction with a bank.
So before you open a new account with any bank, it is important that you take your time to go through their terms and conditions; ensure that you understand how their system work, their interest rate, sub charges and all other hidden charges that you might not be aware off.
Now let us quickly look through the 5 ways bank rip people off and how to prevent it;
5 Ways Banks Steal your Money and How to Prevent It
1. Handle the Information about Bank Fees and Hidden Charges with Levity
Banks are in business to make profits and they take advantage of ignorant customers in the bid of making profits. One of the ways banks rib you off your money is by deliberately handling the information about bank fees and hidden charges with levity. Marketers that work with banks have been trained to sweet talk their customers into collecting loans, collecting overdrafts (cash advance), opening special accounts and signing other special package without emphasizing on the fees and hidden charges it will attract.
In other to prevent this from happening to you, ensure that you ask all the questions that will enable you have good understanding of all the bank charges and any other hidden charges. If you are not comfortable with it, you can pull out from the deal. That is only when you can make informed decisions.
2. Increase the Costs of Maintaining Your Bank Accounts
In the bid to market their products to you, banks ensure that they step down their account maintenance charges (bank fees) so that they can attract customers. But the truth is that most people don’t even bother to check the percentage increase in the cost of maintaining their bank accounts after a year or more. Banks take advantage of this to increase these charges to as high as 300 % after a year or more in order to rip their customers off.
In other to prevent this from happening to you, ensure that you request for the modalities for increasing the cost of maintaining your accounts and if you are not satisfied, threaten to close your account with them. For example, a bank might increase the COT on your account without informing you that is why it is important to always request for your account statements at regular interval. It will enable you to see all the discrepancies in your accounts. Beside, you can negotiate your COT with your bank.
3. Encourage Consumer – Gouging Payday Loans (Cash Advance Programs)
One of the ways banks make money is through the interest they get from loans so they trained their marketers to force loans on their customers; those who they know have the capacity to pay back the loans. As a matter of fact, banks encourage workers who have salary accounts with them to collect cash advance. Most of these employees will feel that the bank is doing them a favor when in the real sense the bank is trying to rip them off. In other to prevent this, you must ensure that you avoid cash advance programs as much as you can and then try to live within your means.
4. Encourages Bank Instruments (ATM card, check book et al) with Cost Implications
There are some hidden charges attached to most bank instruments like ATM card and check books et al so banks try as much as possible to encourage people to make use of this instruments; it is one of the ways bank rip people off. For example some banks have fix sms rate they deduct from their customers, and also some charges when they make use of their ATM cards or when they request for check books.
In other to prevent all this hidden charges that you are not clear about, ensure that you make use of online bank transaction it is cost effective because the charges are very minimal compare to ATM and Check.
5. Deliberately Mismanage Mortgage Paperwork
Lastly, another way bank rip people off their money is by deliberately mismanaging mortgage paper works; they allow unnecessary bureaucracy in reviewing applications. Banks also ensures that they spend longer time in paying property tax; they delay in canceling private mortgage insurance and even deliberately delay communications on the status of loan modifications. In other to prevent this from happening to you ensure that you keep an open eye on all the process involved in your mortgage and also ensure that you review your bank statements every month to be sure that everything is working as planned.
Over and above, most banks will continue to take advantage of people who are ignorant or lazy to read through all the necessary bank documents. Even if you are not presented with any document that clearly state their terms and conditions, ensure that you request for it.
There you have it; the 5 ways bank rips people off their money and how it can be prevented.