Hefty bank fees waylay soldiers

[Steadfast]

Banks that market to US military personnel are among the top collectors of fees.

Fort Hood National Bank lets soldiers overdraw their accounts by hundreds of dollars at its seven branches on the Fort Hood U.S. Army base in Texas. It charges them up to $35 for each overdraft.

Not long after Samantha Smith started her customer-service job at the bank in 2010, she noticed she spent most of her time on soldiers struggling with those fees.

The bank disclosed the fees, she says, but many soldiers didn't understand it would charge them $35 repeatedly, even for small debit-card transactions. When their Army paychecks arrived, the bank withheld overdrawn sums and fees, often leaving them short of funds and vulnerable to more overdraft charges, she says.

"They could never catch up. It was awful," says Ms. Smith, who left the bank a year later. "These guys are 18 years old and they never really managed money. The bank knows that." Fort Hood National officials didn't respond to inquiries.

Story on MSN Money

[centermass]

The solution to this I believe could be solved with a 2 prong approach.

Bank

1. The bank automatically limits (Through a default setting) that once a member has 2 overdrafts, the account is suspended until either the member acknowledges that further withdrawals will result in more and higher over draft fees and the suspension lifted with a cap say at 400-500.00

2. The account is suspended (IAW the above) and the suspension lifted once funds are deposited and available for withdrawal

Chain of Command

1. Tm Leaders on up should be teaching those newly arrived (Especially younger soldiers and those already with families) in addition to Leadership Counseling, money management and lessons of How Not To Do Things. IE: Stay away from High Interest Loans, don't run out and immediately by a vehicle, be careful of those who offer you credit and try to lure you in with big ticket items like TV's, stereos with ungodly interest rates, etc. Avoid Pawn Shops, payday loans and how to balance a checkbook and learn how to live on a budget without resorting to credit.

2. Learn to live within your means, stick to your budget and protect one thing that is extremely sensitive: Your credit rating.

[Jim]

Agree with CM. To me, this is one of my pet peeves. I had a MAJ, Military Academy grad, who was spending a lot of time TDY. his bank kept hitting him with overdraft fees right and left. The real trouble-maker was the finance office as they would take three or four weeks to process his TDY, then cut him a check, which he had to endorse and mail to his bank in New York. It took me several calls to the branch manager (who I got to know all too well), explaining the real problem and working out a solution. But it took a lot of time and effort. You have to take care of your people.