Mirror, mirror on the wall, who's gouging consumers most of all?
Surely it's the airlines, whose fees for baggage are now legendary.
Or is it our major electricity provider, Progress Energy Florida, for monthly fees to pay in advance for a new nuclear power plant the utility may, or may not, decide to build and operate a decade from now?
It's a close contest. But today's Gouging Award goes to the banks, courtesy of Bank of America's decision Thursday to start charging $5 a month in 2012 to customers who use debit cards to make purchases. (ATM use will remain free.)
That adds up to a $60 annual fee. It's a miserable idea, a miserable fee and miserable economic timing.
If banks really followed truth in advertising rules, B of A's crack marketing team would have to pitch this charge to consumers as the new Hit 'Em When They're Down fee.
The financial news website TheStreet.com asked its readers if the new $5 debit card fee would prompt B of A customers to leave the bank. It's not a scientific poll, but we can get the drift from the results as of late Friday.
Among thousands of respondents to the survey, more than 84 percent picked this choice:
Yes, I am sick of being nickeled and dimed.
Actually, we need to update that cliche. Nickels and dimes are so yesterday. Consumers these days are getting zapped by fees typically 100 times that size.
Even before this debit card charge, Bank of America hovered low on the popularity meter. Don't forget, this is also a bank that received a $45 billion federal bailout in 2008.
On TV's Fox Business Network on Thursday, consumer finance anchor Gerri Willis grabbed a pair of scissors to cut up her own B of A debit card, saying: "I'm going to show Bank of America what I think of their fees."
B of A's stock price has been pummeled by investors who see the bank's past purchase of the toxic Countrywide Mortgage business as a major blunder. It also faces numerous high-profile lawsuits and bad publicity from ham-handed dealings with customers in foreclosure. The bank's recent plan to cut 30,000 employees in the coming years only adds to the perception that management is out of touch.
B of A's stock closed Friday just over $6. That's down more than 50 percent for the year.
It probably does not help that Bank of America's well-heeled customers — those who leave enough money in their checking accounts to avoid most, if not all, of the bank's fees — won't even be affected by the new $5 debit card charge. Only the working stiffs must pay.
While Bank of America takes the heat on the $5 fee, a handful of other banks with smaller profiles are already testing debit card fees or have announced $3 and $4 monthly fees that will take effect later this year.
The banks claim such charges would not be necessary if the government stopped taking away other sources of bank revenue. Part of the federal Dodd-Frank Act caps (at about 24 cents, down from an average 44 cents) the amount of money banks can charge merchants for debit card transactions. That cut helps retailers but hurts banks, driving them to look for other ways to make up those lost revenues.
This brouhaha comes shortly after banking rules trimmed another gold mine for banks: charging big-buck overdraft fees to customers who spend more money than they have in their accounts. Defending rampant overdrafts, banks once argued that they gave customers the "courtesy" of covering payments even if customer accounts held insufficient funds. Then the banks hit customers with whopping overdraft fees, now averaging nearly $31 apiece.
Among pinched consumers, B of A's debit card fee has produced an angry backlash. But banking analysts are split on the real impact. Some, like Greg McBride of Bankrate.com, predict many bank customers will stop using debit cards for purchases, switch to credit cards or find other financial institutions that do not charge a fee. A recent BankRate survey found that 64 percent of Americans would consider switching banks if their fees increased.
Other analysts suggest people "considering" a switch to another bank is a far cry from making a switch. Untangling bank accounts, especially those layered with a direct deposit of a paycheck or automated loan payments, is time consuming. Bank of America's smart enough to recognize the greatest tendency of most of its customers — inertia — will probably minimize its financial damage.
"Bank of America may get the last laugh" reads one recent story from CNN/Money magazine.
The debit card fee isn't the only charge going up at banks. A BankRate survey released last week finds only 45 percent of noninterest bank checking accounts are free, down from 65 percent in 2010 and 76 percent two years ago. Also, the average monthly fee for a noninterest account is $4.37, up 75 percent from a year ago.
Compounding the fee frenzy at banks is the astonishingly low interest rates financial institutions now pay customers on savings accounts. It's common at both banks and credit unions to find regular savings and money market accounts paying interest rates as low as 0.1 or 0.05 percent. CD rates are barely higher.
There's a sad joke here.
Banks went bonkers years ago introducing debit cards as an electronic wonder and productivity leap over the old paper checks used by generations of Americans. Debit card usage has climbed steadily, with cardholders swiping their cards an average of 16 times a month.
Now it looks like banks want at least some of their customers to go back to the old ways to pay for things. Or, perhaps, banks want some customers to just go away.
Robert Trigaux can be reached at email@example.com.