Once upon a time, if you received a check as payment you could take it to the bank on which the check was drawn and receive your money. It was a pretty straightforward transaction.
But these days banks are looking for new sources of fee income and one place they've identified is non-customers. And for many reasons, there are a lot more non-customers these days, as consumers are fleeing the banking system because of fees.
While a check-cashing fee might be understandable if they were providing a totally unrelated service for a non customer, Melody, who operates a paper route in Lowell, Mass., simply wants the banks to honor the checks issued by her customers without her having to pay a hefty fee.
A big bite
"I went to the bank with checks that were made out to me from my newspaper customers and most of them were for $20 or less," Melody wrote in a ConsumerAffairs post. "Because I don't have an account with their bank, Bank of America takes $6 and TD Bank takes $5 from each check as a processing fee!"
Linda, of Boonton, N.J., reports her husband encountered the same problem when he cashed his paycheck, drawn on a Wells Fargo account, at a nearby Wells Fargo branch.
"He was told that if he didn't open an account with them, he would be charged $5.00 every time he cashed a check," Linda wrote.
It is indeed policy now at most major banks.
"A payee presenting a check that you issued may be assessed a fee if the payee is not a Bank of America customer," according to a posting on Bank of America's website. "Business Checking account holders can agree to assume the responsibility for this fee on behalf of their payee(s) - an analyzed account is required to do so. Please visit your banking center or call the number on the front of your deposit statement to learn more about alternatives."
Melody could refuse to accept checks from her customers but that might not be the wisest business decision. Linda's husband has even fewer options. He can't very well require his employer to pay him in cash.
While a "check-cashing" store also charges a fee for cashing a check, Melody and Linda point to one big difference; the bank is simply being asked to honor its customer's check. They say it's only right.
In the meantime, both Melody and Linda's husband need some type of bank account. Their best bet is at credit union, where there are fewer fees. They can then deposit checks into their accounts without being assessed a fee.