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Hello? That will be $2, please. Banks charge customers who call

May 14, 1997

NEW YORK (AP) _ Hello, thank you for calling ABC Bank. That will be $2, please.

Some of the nation’s largest banks are charging customers who call in for information about their accounts, even if they only ``talk″ to a computer.

The fees, which range from 50 cents a call to $2, are levied in most cases only after a customer exceeds a maximum number of free calls per month. Banks, which have been steadily increasing the number of services they charge for, say the fees are necessary to stop too-frequent calling by some customers.

A spot check of nation’s 15 largest banks showed that five charge some customers to phone in.

For now, the charges are appearing at large regional banks and not at the big New York-based banks. Spokesmen at Chase Manhattan Corp. and Citicorp, the two biggest, said they don’t charge for calls and don’t plan to do so.

In some other parts of the country, charging for phone calls isn’t new. San Francisco-based Wells Fargo & Co. has been doing it for four years. Crosstown rival BankAmerica Corp. has charged for three years. NationsBank Corp. and First Union Corp., both based in Charlotte, N.C, have charged for calls for about two years.

But when First Union expanded its charges last month into Washington D.C., Virginia and Maryland, some other banks began to copy them, said Ed Mierzwinski of the U.S. Public Interest Research Group. Cleveland-based KeyCorp began charging in certain areas last month and will charge everywhere by June 1.

``The fact that the big banks are ahead of the curve on it means that many consumers will face it,″ Mierzwinski said.

NationsBank, the nation’s fourth-largest bank, charges 50 cents per call to the bank’s computer and $2 to talk to a person, after eight free calls per month. First Union levies the same charges after five free calls to a computer and two to a person.

KeyCorp, after fielding calls from Florida customers inquiring about the weather, gives its customers 10 free computerized calls a month, then charges 50 cents for calling a computer. The 14th-largest bank gives four free calls a month to a person and charges $1 for each call after that.

Some banks only charge customers who fail to keep a minimum balance in their accounts. Some have streamlined accounts that offer limited services but have limited or no fees.

Bank spokesmen said that because there are so many exceptions, only a small number of their customers end up paying the fees. They have been levied only to discourage overuse of telephone services, they said.

``These are individuals who use the services to a high degree, some four to five times a day,″ said David Scanzoni, a spokesman for First Union.

``Four calls a month is not abuse,″ countered Mierzwinski, who is conducting a study on bank fees to be released this July. ``Because banks are holding our checks for so long (before crediting accounts), and because they’re forcing so many people to use direct deposit ... you can’t keep track of your bank account without making these calls.″

An increasing number of banks are charging customers for individual services like ATM transactions, bounced checks and teller services. There are more than 200 types of bank fees, Mierzwinski said, up from a handful just five years ago.

Consumer groups have argued that the banks are not just covering their costs or discouraging customers from using expensive services; they are using fees to boost profits.

Harvey Radin, spokesman for BankAmerica, said tough competition among banks is a partial explanation. But he defended the practice of charging fees for service, saying bank customers get many more services for their money than they used to.

What’s next? Most banks don’t charge their customers to use the bank’s own ATM machines. But it’s coming, predicted Mierzwinski.

``That is the big gravy train, and when the banks feel that they’ve got enough market power and people have gotten used to ATMs, they’ll begin to look at the potential profits from charging their own customers to use ATMs.″

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