Are you getting ripped off by pesky bank fees?

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Have you ever felt like your money is slipping away? Well, it’s not your imagination. Every time you make a transaction, use online banking services, withdraw or deposit money into your account, check your balance, get a paper statement and change your pin, banks charge you a fixed fee for these services.

You might not have noticed these fees since you don’t get notified and even if you did, you probably didn’t care too much about it as the amounts are seemingly insignificant. However, on a closer inspection, you will realize that these fees aren’t something to disregard, especially when you add up all of the fees banks have been charging you over the years.

For instance, banks impose fees for services such as cash withdrawal, SMS alert, transfers and checking balance. These services cost 50 MNT to 500 MNT depending on the bank. If we say that a person uses any of these services three times a day, he or she would be paying 150 MNT to 1,500 MNT a day – 4,500 MNT to 45,000 MNT a month and up to 54,000 MNT a year. Of course, this expense could decrease or increase depending on a person’s spending.

I was fine with banks charging fees for these services, but when I looked through my bank statements, I was appalled by the fact that some banks pulled out a percentage of my account balance each month as “deposit book keeping fee” and/ or “dormant account fee”.

This amount is deducted even when no transactions have been made. Had I not paid 10,000 MNT to get a paper statement from the bank, I wouldn’t have known that these “deposit book keeping fee” and “dormant account fee” existed because I was not told about it when I first opened an account. Most banks do not detail on these schemes even on their websites.

To avoid these unnecessary costs automatically withdrawn each month from my account, I tried to close my account but the bank charged me 3,000 MNT. This felt like a sophisticated rip off to me. First, the bank charges me 10,000 MNT to open a one-year current account, it automatically withdraws 200 MNT a month as dormant account fee, deducts one to three percent of my bank balance annually, charges me for getting notifications which was misleadingly introduced as if they were free, and then, charges me for trying to get rid of these costs. To be honest, I wouldn’t have been bothered by these pesky fees if the bank had told me about it in advance because I would have either complied with it or not opened the account at all. However, I only found out about all of these fees when I noticed my money slowly drip away.

It seems I wasn’t the only one who noticed these fees. Countless people had already complained about it on social media. A young man in his early 20s wrote about banks “ripping him off” by charging 200 MNT when he withdrew only 5,000 MNT from an ATM. One woman complained banks were charging her 50 MNT to 200 MNT when she hadn’t made any transactions and even posted her bank statement to prove it.

Another point these people brought up was the cost of online banking services and notification alerts. In the past, banks charged a bulk amount of around 10,000 MNT a year but now, they charge 50 MNT per notification and at least 100 MNT per non-cash transaction. This means that customers will pay the original 10,000 MNT for online banking services in just 10 transactions. Social media is full of these types of complaints.

Commercial banks refused to clarify about these fees. Their customer service agents simply replied that they need to charge for services provided. One of them explained that ATMs require a hefty sum to operate, starting from paying off their customs tax to fixing their damages to daily maintenance services.

“Online banking services is purely based on technology but requires costs for things like database, software, network expansion, and employee wages. With these services (online banking system and ATM), customers save their time and money, and so, we charge these fees,” an operators explained.

Apparently, Mongol Bank doesn’t regulate banking service fees and only supervises to ensure stable banking system. The 2018 revision of the Procedure on Maintaining Transparency on Method of Determining Interest Rates and Services Fees of Banks states, “The types of fees to be charged from customers and their amount will be set by banks”. The Banking Law also allows banks to determine their own fee rates.

In most European countries, banks dropped fees for services such as using ATMs, making online transactions and getting notifications. Even so, I’m not demanding banks to drop these fees immediately. I understand that as service providers, banks need to charge for their services as it costs on their part as well. However, it’s not only manners but also their obligation to notify about these fees when a customer is opening an account. This way, they will not be caught off guard like most bank customers, including myself. Another thing I’d like to suggest is moderating these fees to attract more customers and avoiding this type of complaints. Let’s think about it – would it cost 100 to 500 MNT for monthly maintenance of a single bank account?

On the other hand, customers need to become more aware about these fees banks charge them to keep an accurate track of their expenses and avoid getting overcharged. There are a few tips to avoid these fees.

For example, when you’re opening a new account, make sure to ask prices of additional services bank tellers offer you. You’re not obligated to sign up for such services. Also, see if any of your services overlap. For instance, you could be getting transaction notifications via both SMS and email, which have separate costs. If this is the case, it’s best to cancel one of them or both and just check via online services, which usually costs less.

The bottom line is that you need to keep an eye on these fees as a customer, especially when switching banks. You should look past the branding and marketing of the institution as much as you can and look at the factors that affect you.

Dulguun Bayarsaikhan