Americans in the dark over bank fees

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NEW YORK (CNNMoney.com) -- When you fork over $36 billion, it stands to reason that you should know exactly what you're paying for.

But a government study on bank fees released Monday revealed that consumers are ill-informed about the fees they are paying on their checking and savings accounts.

The report, published by the Government Accountability Office, found that some fees assessed by at banks, thrifts and credit unions have steadily increased in recent years - in some cases by double digits.

Overdraft fees, for example, rose 11% between 2000 and 2007, according to the study. Other charges however, like monthly maintenance fees, have declined in recent years.

All told, consumers paid more than $36 billion in various fees at banks, thrifts and credit unions in 2006, according to the Federal Deposit Insurance Corporation. That's up from $34.5 billion in 2005 and $24.4 billion in 2000.

But staying abreast of all the fees associated with a checking or savings account proved difficult, according to the report.

As part of its study, the GAO had staff members pose as customers looking to obtain fee information at 185 branches of more than 150 different financial institutions. The GAO customers could not obtain detailed fee information, as well as account terms and conditions at more than one fifth of the branches visited.

And that proved even more difficult online, as GAO researchers were unable to locate that same information on half of the financial institutions' Web sites. Under federal law, banks are required to disclose fee information for consumers.

Rep. Carolyn Maloney, D-N.Y., who requested the report and has introduced legislation to crack down on abusive overdraft bank fees, called the findings of the report "troubling."

"You don't have to buy a car before you find out how many miles per gallon it gets, and you don't have to buy a house before you find out what your taxes will be. Why should consumers be forced to walk blindly into the terms and conditions of a bank account?" Maloney said in a statement.

But it wasn't just the banks that were implicated in the report. It also urged the five federal regulatory agencies that oversee the U.S. banking system to do a better job making sure consumers can get information they need.

Ed Mierzwinski, federal consumer program director at U.S. Public Interest Research Group, which conducted a similar study in 2001, agreed saying the fault lies with both groups.

"The banks aren't following the law, and regulators aren't enforcing the law," said Mierzwinski. "One result is that bank fees keep going up and consumers don't know what to do about it."

In a statement, the industry group American Bankers Association, however, argued that bank accounts more affordable than ever before, citing the explosion in free checking accounts, and now provide greater consumer control.

"Overall," Nessa Feddis, ABA's senior federal counsel said, "the GAO report is great news for consumers."

Fees, which are typically considered a cornerstone of a bank's business, have steadily increased in recent years to not only cover the cost of doing business but to prepare for tough times like the current economic cycle.

However, some financial institutions have been quietly ratcheting up fees lately to compensate for business lost as a result of the credit crisis.

Bank of America (BAC, Fortune 500) in August raised the fees it charges non-account holders to access ATMs at their banking centers nationwide to $3 from $2.

JPMorgan Chase (JPM, Fortune 500), which has branches such cities as Chicago, New York as well as Columbus, Ohio, announced in January that it would now charge certain account holders $2 for using non-Chase ATMs, instead of $1.50.