Sandra Hoboy wrote to us after many months of disenchantment with Bank of America. A longtime customer frustrated over a fee dispute, her relationship with her bank was on the verge of a break-up. How could a banking relationship once so right go so wrong?
It all started with a large purchase on her Bank of America Visa card — a $20,000 transaction — paid to a timeshare company with an office in Texas. Her payment was made in dollars, and the paperwork associated with her purchase, including her credit card information, was mailed to a post office box in Houston.
When Hoboy reviewed her bank statement, she saw the $20,000 charge, along with a little something extra. Bank of America had assessed a foreign transaction fee, because the merchant processed the payment with its bank, which happens to be in Mexico. That additional fee, a 3 percent charge, added up quickly — to the tune of $601.
Bank of America’s cards are among the vast majority of credit cards which assess foreign transaction fees for any charge made in a foreign currency and converted to dollars. Bank of America explains that this fee applies even when the transaction is in dollars but is made or processed outside the United States.
That’s where Hoboy’s case got a little tricky. The timeshare company sells properties in Mexico, but from Hoboy’s perspective, the transaction took place in the United States and was made in dollars.
Hoboy called the timeshare company, which assured her that the charge originated with Bank of America, and that it would never impose such a fee on its customers. She then argued to Bank of America that the assessment of the fee was improper, because she had no way of knowing that the company would use a foreign bank.
In response, Bank of America did what retail banks do best — it recited the policy, and insisted that upon review, “the fee was charged correctly.”
Frustrated with Bank of America, Hoboy dug in her heels and refused to pay the fee. She continued to plead her case, writing to the bank each month to insist the fee, including all associated late fees, be removed. That’s right — Bank of America was determined to get its pound of flesh, and then some.
The foreign transaction fee is one of the many ways a retail bank like Bank of America pads its bottom line. There is no real service being performed in exchange for the fee. It’s simply one of those things banks do because they can. And sometimes, it seems that’s the only reason they do it.
Hoboy wrote to her bank no less than a half dozen times over a half year, questioning the bank’s logic and standing her ground. In her last letter to the bank, she told the bank that its position was “infuriating,” and rounded it out by saying she that would stop using her card and take her banking business elsewhere.
And then she wrote to us. Hoboy was ready to break up with Bank of America. But she really didn’t want to pay that fee.
On Hoboy’s behalf, I wrote to Bank of America, which certainly didn’t make my advocacy job easy. I emailed one of the bank’s top executives. That email generated a series of automated messages to Hoboy, asking her to call a toll-free number. Hoboy wasn’t impressed, but we encouraged her to give it a try. After all, as a consumer with a particular objective in mind, you have to play the game a little.
After a phone call and a couple of emails, Bank of America sent Hoboy a FedEx package containing a letter. Perhaps it was turning over a new leaf. Or maybe it was an attempt at reconciliation. But whatever you call it, Bank of America announced in the letter that it was refunding the $601 foreign transaction fee, labeling it a “bank error.”
A few emails and nearly a month later, Hoboy informed me that all associated late fees were refunded by check. Why a check? By then, Hoboy had already ended her relationship with Bank of America.
And she hasn’t looked back since.