Photo: kris krüg / flickr
A new study by Pew Charitable Trusts shows exactly why so many consumers have trouble figuring out what they’ve signed up for at their bank. The median length of the disclosure for a bank was 69 pages compared to just 31 by the more consumer-friendly credit unions.
In addition to the sheer paperwork, it also was found that different banks organised documents in drastically different ways, making it next to impossible for consumers to comparison shop between banks.
Policies are so tangled that people often sign away their legal right to sue banks without every knowing it. Of the 12 banks Pew investigated, six bind customers to an mandatory arbitration clause, which isn’t exactly the best option for consumers.
“The arbitrator is often chosen by the industry, there is no requirement that the rule of law be applied, and there is little opportunity for appeal,” the report says.
To make matters worse, one-third of banks require the customer to reimburse them for any legal costs incurred by the dispute – even if the consumer comes out on top.
Leaving banks isn’t easier either, a recent report showed, with charges for transferring funds between accounts and a slew of related fees.
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