Man beats bank
Who among us doesn't hate bank fees? Who among us doesn't think we're getting ripped off by some bank computer somewhere that is constantly reaching into our pocket? It took eight long years, but 77-year-old Peter Gossels is one persistent bank customer who fought the bank and won.
Once upon a time, bank fees were mostly about punishing bad behavior for things like bounced checks. Now, fees are at the heart of the banking industry's business model. Bank fee income has more than doubled to $36.3 billion in 10 years, according to the Federal Deposit Insurance Corp. Bank profits are fine; sneaky bank fees aren't. And the rules, buried in the fine print, just keep changing.
Not many of us have the tenacity of a Peter Gossels.
In 1999, the Boston lawyer walked into his regular Fleet Bank branch on State Street across from his office to deposit a large check drawn on a German bank. Unlike most institutions that are in the currency-exchange business, Fleet did not post the exchange rate for the transactions. The bank charged him a fee and then took another 4 percent for the check, the difference between the retail exchange rate and the interbank "spot rate" for foreign currency.
Gossels says he was charged $10,000 for a transaction that should have cost him $30. Last month, eight years after he went to the bank, a three-judge panel on the Massachusetts Appeals Court agreed, saying Fleet (now owned by Bank of America Corp.) had failed to properly disclose the differential in the rates.
The smoking gun in the case was what the court called "a secret rate sheet" that bank employees were given daily and told not to disclose to customers. Gossels, a lawyer for 50 years who handled much of his case himself, said the rate sheet had been inadvertently attached to a deposition from a bank officer during the long discovery process.
"The failure to disclose this rate differential was not mere negligence or oversight," the court wrote. "The rate sheet was published internally with instructions that it was not to be revealed to the public."
Says Gossels: "This is the only way banks will learn not to cheat its customers."
In a statement, Bank of America said the case was "wrongly decided" and said it was seeking further review. "Beyond that, it would be inappropriate to comment further," the bank said.
Gossels, Wayland's town moderator for 26 years, took his complaint to state and federal regulators with no result. He couldn't even get a call back from consumer reporters. So he fought the fight himself. He says he spent far more than he will ever recover, but thinks it was a battle worth fighting. He believes hundreds or even thousands of other Fleet customers were also overcharged.
Despite it all, Gossels still banks at the same State Street branch he has always used, which is now operated by Sovereign Bank. Old habits die hard, making bank money incredibly sticky. Banks count on that.
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Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902.
