Tuesday, January 30, 2007

Oh The Humanity

Jack Layton of the NDP is taking on banks for their service fees. "Why me?" cry the bank owners, essential monopolists in today's electronic transaction world, who were only able to scrape by with $14 billion in profits last year.

Of course, the banks have their useful idiots to defend them. One such is the Sun's Tom Brodbeck (one wonders how long you have to bow and scrape on what Sun pays its reporters before you get to cash in on the Tory big bucks and land a cushy job at a fake research agency).

Brodbeck writes, "I don’t know what kind of glue this guy is sniffing. Consumers have all kinds of choice on where to bank and how to withdraw money. And just like 20 years ago, you can still do it for free."

This is simply not true. If Brodbeck is banking for free, then he's either paying a monthly service charge, or he's keeping some significant minimum balance in his (non-interest paying) account. Of course, on a Sun salary, Brodbeck shouldn't know anything about high income banking.

The bank charges are a recent invention. I remember when there was no charge at all for withdrawing from the teller (and I think it was something like 14 cents to write a cheque). Along came bank machines, and they were at first free to use as well. Great stuff; none of us liked waiting in line for the teller. But then not so long ago - it's really only five years or so ago - banks started charging fees. First to other banks' customers. Then their own customers.

The strategy is of course to blame the customer for running up their banking costs. This is, of course, a con game. When customers doing what they have always been doing suddenly start getting much increased charges, it's not the customers' fault. No, it's the $14 billion industry that's gouging them. Again. And making up bank fairy tales isn't going to change that fact.

Brodbeck says, "Everybody likes a little bank bashing." There's a reason for that. Banks, almost uniquely, deserve to be bashed.