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A bank fee that's so insulting, it's unbelievable

If you sue your bank, you may be required to pay the bank's legal fees -- even if you win.

By MSN Money Partner Apr 15, 2014 1:36PM

This post comes from Krystal Steinmetz at partner site Money Talks News.


Money Talks News on MSN MoneyLooking to settle a dispute with your bank? Your options are likely limited.


Chances are your bank has a so-called mandatory binding arbitration agreement in its checking contract -- the voluminous, 40-plus-page document that you signed and probably didn't read. (You're not alone. Ninety percent of consumers don't read all of it, according to MarketWatch.)


Bank sign © John Foxx, Stockbyte, Getty ImagesA recent study by the Pew Charitable Trusts found that 70 percent of banks, up from 58 percent in 2013, have verbiage in their contracts that prevents customers from suing the bank on their own or as part of a class-action lawsuit.


As if that's not bad enough, some banks require that consumers who bring suit against the bank will have to pay the bank’s expenses, no matter who wins the case, MarketWatch said.


You read that correctly: If you take your bank to court to settle a claim and you win, you may have to pay your bank's legal expenses. The "loss, costs and expenses" clause is included in the fine print of about 1 in 4 banks' checking account contracts.


According to the Consumerist, most large banks include the arbitration clause in their checking agreements, while smaller banks don't.


Check out Pew's ratings of the best and worst banks based on key consumer protections, including dispute resolution verbiage. Click here (.pdf file)  to access Pew’s Check and Balances Report for 2014.


How does your bank rate for consumer protections in Pew's report?


More from Money Talks News

6Comments
Apr 15, 2014 3:13PM
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What fool still has any dealings with a bank other than a small community bank? And who has no access to a credit union?
Apr 16, 2014 7:48PM
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Banks will always rip you off if they can. On overdraft fees, on account fees and commissions, and my horror story is on life insurance. I got charged $300 a month for a policy from the bank. After realizing that I only need to pay about $25 a month from a place like Life Ant or genworth I finally got rid of them...after 4 years. As a result of all my experiences with big banks I don't have a lot of faith in them. I use a small bank near my house now, I have personal relationship with the customer service people and the management, and I have never been happier.
Apr 15, 2014 4:24PM
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Just as insulting as condo associations... they send you the lawyer bill from them to file the legal paperwork to collect condo fees.
Apr 16, 2014 12:38PM
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There's no such thing as an unbelievable bank fee any more.
Apr 16, 2014 12:31PM
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Lets consider how this works.  If you win the suit against your bank, you are awarded damages.  Now part of the damages should be all the economic costs, which would include fees assessed by the bank.   The most important thing is to remember to include the bank's fees in your damage request.
Apr 15, 2014 2:38PM
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That's what happens when the courts fail to stop frivolous lawsuits.
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