We all remember last fall when Bank of America and other big banks backed off from plans to charge customers a monthly fee for using a debit card to access their own money from their checking account. Even BoA admits that consumers deserve the credit for this victory (although they don’t use those words). Massive outrage by banking consumers led to an unprecedented willingness to speak out against these fees and even close accounts at these big banks. Evidently bad PR and loss of business are the two things that make banks listen.

But as everyone anticipated, this debit fee is not the end of big banks nickel and diming consumers.  Oftentimes fees increase or new practices are adopted stealthily to keep consumers unaware. And without knowledge consumers cannot organize their anger en masse to communicate dissatisfaction with the banks.

For this reason the Defend Your Dollars team is embarking on a monthly alert to let you know about new fees or bank practices that make your accounts more expensive. This month we’re going to highlight a fee that really flew under the radar. Chase has started charging a $5 fee for each withdrawal from a savings account after 6 have been made in a month.

A little background: there is a law (Regulation D) that prohibits more than 6 ACH transfers from a savings account. I won’t get into why the law does that but you can read about it here. Banks have used this law as an excuse to charge a fee when a consumer makes more than a prescribed number of ACH withdrawals. But Chase recently upped the ante by expanding the fee to apply beyond those identified in the law. The $5 fee is now charged on ALL withdrawals in excess of 6 each month for customers with a “Chase Savings” account. (Note: “Chase Savings Plus” account holders can avoid the fee if they maintain $15,000 in their account. Lucky them.)

Bill from New York notified us about this fee after he saw it post to his account.

 “While monitoring my accounts online on December 21, 2011, I saw that I had been charged a $5 “Savings Withdrawal Limit Fee” on a routine ATM withdrawal the day before, but had no idea why. So I called Chase telephone customer service, and was informed by two different service representatives that the fee applied to all withdrawals in excess of six each month. When I disagreed and said that the charge they were describing applied only to Regulation D transactions (I try to monitor and limit those transactions), one of the service representatives stated that the new charge had been implemented by Chase beginning in mid November, but that the December 20, 2011 withdrawal was the first during my monthly statement period exceeding the prescribed withdrawal limit.”

He went on to get more information about the fee which was disclosed on the fifth page of a seven page disclosure document that is not available online.

 “I asked what contract provisions allowed Chase to impose this new fee and where I could read the contract on the website, but I was told that I had to go to the branch to get a copy of the Account Agreement if I didn’t already have it. When I asked what disclosures Chase had provided advising its customers of the change, I was told by one of the service representatives that I would be sent a copy of the relevant Chase disclosures.”(See Exhibit B of this document)

Bill’s closing really sums it up:

 “There can be no legitimate justification for charging customers for routine personal savings account withdrawals, let alone charging a fee without telling the customer that a particular transaction is going to be subject to the fee. The fact that the withdrawal is from a savings account rather than a checking account is irrelevant: the computer processing is identical whether the money comes from a checking account or savings account, and to Chase it’s just a bookkeeping entry. Furthermore, the charge is exorbitant – a $20 withdrawal effectively costs a customer 25% to obtain his or her own cash. By comparison, Chase pays less than 1% annual interest on most of its interest bearing savings accounts…

…Being a banking customer these days is truly “death by a thousand cuts.”

If you’ve encountered a new fee or bank practice that has made things more expensive for you, please send a note to money@consumer.org.