Netbank's Hidden Costs

ATM cards give you the ability to get cash almost anywhere, anytime, with the touch of a just few buttons. But Netbank users beware: it can be costly.

While NetBank does not charge fees for any ATM worldwide, the ATM owner generally does, and herein lies the deception. Where your hard-earned money is involved, you do not want to be paying for virtual services, such as ATM fees.

Netbank specifically states on its website there are no ATM charges. Period. Many banks charge convenience fees - sometimes called "surcharges." A surcharge is the fee the owner of the ATM machine assesses to anyone who is not a customer of the institution owning the ATM. Surcharges at most ATMs are typically between $1.50 and $2.50: this may not seem like a lot, but over a period of time, it sure mounts up.

Netbank is one of the biggest internet banks around and currently has 8,300 ATMS nationwide. This may seem like a lot of machines, but depending upon where you live, it may be a long drive to an ATM that Netbank lists as free.

"There used to be a time in Florida when every ATM at Publix [a local grocery store] was free," says Wayne Davis, "but now it seems like every ATM I use to access money from my Netbank account has a fee associated with it.

"I have a long way to drive to save a dollar, so if I need money, there are two choices: pay the ATM fee, or get cash back whenever I purchase anything using my debit card," says Davis. "That means that buying a stick of gum is pretty much the same as using an ATM." As long as you want a stick of gum.

Netbank's website suggests that to eliminate ATM surcharges at other banks, withdraw more cash than you need and visit ATMs less often. Words of wisdom! For some people, walking around with extra cash is a license to spend more money than originally intended and they will usually buy more than a stick of gum.

Service Fees

Janice Blanco was charged a service fee of $50 because she used an ATM to deposit checks. "My balance is over $500 and I have been charged for two checks - one for $190 and the other for $78, all because I used an ATM," she says. "If Netbank wants to keep me as a customer, I would like these fees reversed," says Blanco. That was three months ago, and still no response from Netbank.

Hidden Costs

Most Americans want to be able to reach out and touch their money if they so desire. They also want to deal with a real live teller, especially when it comes to customer complaints. At Netbank, there is virtually no customer service.

As well, Netbank does not offer savings accounts. Instead it has money market accounts which require a minimum balance of $500 and significant fees if you fall below that minimum balance. You also only get six withdrawals per month without getting another large fee. It also states that there are no monthly account fees - unless you read the small print. Although Netbank purports to give better rates than normal banks, the hidden costs far outweigh any redeeming features it may have.

Just ask David Lim from Chico, California.

"I signed up two years ago and recalled no fees mentioned. I put in $250 when I opened an account at Netbank. I am from Singapore and I travel a lot, so I thought an international bank would be easier to use at an ATM. I never got any information regarding fees or change of rules.

I never used this account and no transactions online. About five months ago I saw a Netbank ad on the Internet stating a $50 bonus if you opened an account and kept it active for six months. So I got my wife to join. Then I checked my account and saw that my balance was zero!

I called Netbank and someone said that a fee of $9 per month is automatically charged if you don't have more than $1,000 in your account or you don't make any transactions. I thought Netbank was a savings bank. I would understand if it was a credit card company, making money in transactions.

Then I wrote a letter to the legal department, stating that I didn't know my account was drained to zero, and I hadn't used their services at all. They said too bad. My wife still had an account - upon my recommendation - because they charge a fee if you close it before six months. Even with my wife's account, they wouldn't reimburse me.

I think Netbank is a lost cause. I feel crappy, especially when I recommended it to my wife. If you use the services of an establishment, you expect to pay. But I didn't use any of the services. The thing about Netbank is that, even an online bank should email or mail monthly statements. I received nothing from them, over a period of two years. No email to say my account was closed because there was no money in it.

The only way I found out that my money was gone was when I saw that pop-up ad on the Internet from Netbank. Then I saw that Oh-oh, my money is gone; not a huge amount but this is broad daylight robbery."

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While millions of Americans use online banking, most consumers want multiple channels to do their banking and the concept of banking exclusively on the Internet is not as popular as companies such as Netbank may have thought: statistics show that online banking from July 2004 through July 2005 lost eight percent of its visitors. At the same time, "brick-and-click" banks saw their Internet services increase 110.5 percent, from 6.4 million to 13.4 million users.

If Netbank doesn't change its ATM policies, they may lose more visitors to the old-fashioned brick and mortar institutions.