Banks have to make money to stay in business. I was an economics major, so I get that.

What I don't get is why so many consumers do nothing as banks get bolder and bolder about picking their pockets. It's no longer nickel-and-diming -- we're losing $10, $20 and $30 a pop as banks come up with ever-more-creative ways to "fee" us to death.

The banking industry collects more than $50 billion a year in various service charges, more than twice the total of a decade ago. It's time we pushed back.

Sometimes just shining the light of scrutiny on these policies is enough to get banks to back down; read below about what happened recently with ING Direct bank. Other times, we need to protest, involve our lawmakers or even move our money elsewhere.

Here are some of the most egregious practices, and what you can do about them:

Checks clear almost immediately; deposits take days

The Fed is required by law to reduce maximum deposit hold times as check-processing gets faster, but it recently decided against requiring banks to make deposits available sooner. Essentially, regulators concluded that even though money disappears from your account a lot quicker these days, it still doesn't disappear fast enough to warrant the extra costs banks might face from crediting you with your deposits more quickly. So: Heads you lose, tails the banks win.

What you can do: Kick up a fuss with your lawmakers. Banks make billions from consumer accounts; they should be required to invest some of that in speeding up deposits. (You can locate your U.S. representative here and your senators here. You'll find telephone numbers, addresses and e-mail addresses on their individual pages.)

Stacking the deck against you

Most big banks, and many smaller ones, process checks that arrive the same day in order of their size, with the largest check processed first. Banks say they do this to increase the odds that consumers' most important checks, such as mortgage and car payments, get paid. Consumer advocates say it's simply a way to jack up overdraft fees, which make up the majority of account service charges that banks collect. Here's how it works: Let's say you have $500 in your account, and you write checks for $10, $55 and $450. If the bank processed from smallest to largest, only one overdraft fee would be generated. By processing them from largest to smallest, two bounce fees can be collected.

What you can do: Obviously, you should try to avoid writing checks when there's not enough money in your account to cover them. But even the most conscientious consumer can get tripped up now and then (especially if there's a hold on your deposits, or if the bank messes up -- as mine did recently by processing a $403.50 transaction as $4,035.00). So sign up for overdraft protection that links your checking account to a savings account or line of credit; the fees and other costs involved are generally much lower than when you bounce a check. If you do get hit with an overdraft free, ask your bank to waive it as a one-time courtesy.

Charging for 'potential' overdrafts

(Note to readers: This section has been rewritten to clarify how Wachovia Bank assesses bounced-check fees.) A poster named haberschmidt recently alerted the blogosphere to the way Wachovia Bank increases bounced check fees. Some of the poster’s charges are incorrect, according to bank spokeswoman Mary Beth Navarro, including his assertion that Wachovia deducts bounce fees before processing transactions that overdraw an account. Each night, Navarro said, Wachovia first credits deposits, then deducts all transactions that have posted, and then finally assesses bounced-check fees.

But Navarro confirmed that the bank does assess bounced-check fees when transactions exceed an account’s “available” balance, even if the real balance in the account is actually high enough to prevent an overdraft.

Here's how it works: You use your debit card like a credit card at a store, signing your name to the transaction instead of entering a personal identification number (PIN). Because this is a signature-based transaction, the money is processed through the credit card payments system, which means the cash takes a few days to actually leave your account.

Banks typically don't wait, however, to deduct the transaction from your so-called "available balance" -- the money that's available for other spending. Where Wachovia differs from many of its banking brethren is what happens when other transactions are processed that exceed this "available balance." With many banks, you won't get a bounced-check fee unless you exceed the actual balance in your account. With Wachovia, you can wind up with a fee if you exceed the "available balance" -- even if you actually have enough money in your account to cover the transactions.

What you can do: As above, it's important to closely monitor your accounts and to keep a pad of cash in them (read "Why you need $500 in the bank" for more details). That said, banks shouldn't be allowed to charge for overdrafts before they happen. If you're a Wachovia customer, raise hell, contact your lawmakers and consider moving to another bank.

The oxymoronic 'courtesy overdraft'

Courtesy overdraft, also known as bounced-check protection, is a far cry from true overdraft protection. Instead of tapping into one of your own accounts, you're borrowing the bank's money and being charged hefty fees for the privilege. What's more, banks often sign you up for this "service" without your consent, and the sneakiest ones even add the amount of the "protection" to the balance you see when you check your account at an ATM. In other words, you're being told you have more money in your account than you actually do, which can lead you to overdraft your account and create more fees for the bank. (For more details, read "Don't be duped by bounced-check 'protection.' ")

What you can do: Call your bank and ask if you have "courtesy overdraft" or "bounced-check protection;" if so, try to get it removed from your account and replace it instead with real overdraft protection.

Fat fees for using personal-finance software

One of the best ways to track your accounts and prevent problems like overdrafts is by using personal-finance software such as Money or Quicken. These programs not only allow you to easily download your recent transactions, but help you forecast your cash flow in the future so you can predict when you might need to get extra cash into your checking account. So naturally, some banks ding you for $6 to $10 a month for using the software to automatically download your transactions.

Do I have a dog in this fight? You bet I do. I'm a longtime user of this software, and I write for MSN Money, which is owned by Microsoft, maker of Money. Even if neither of those things were true, however, I'd find it awfully suspicious that the majority of financial institutions find a way to provide automatic downloads for free, yet a handful of large banks -- Bank of America, Citibank and Wells Fargo among them -- find it necessary to charge over $100 a year for the same service.

What you can do: You may be able to get around the charges by using a more manual download process that involves going to the institution's Web site and clicking a few buttons, but that's a hassle. A better solution if you like the more automated download feature may be switching financial institutions. Washington Mutual, Charles Schwab, ING Direct and others support the automatic downloads without charging for the privilege.

Closing accounts because of bad credit

ING Direct, an online bank, says it was all a mistake. But some 5,300 customers were recently sent e-mails telling them their checking accounts would be closed because of their low credit scores. Many of these customers were understandably disturbed, since there are plenty of ways your credit scores can plummet that have nothing to do with your ability to manage a checking account.

When I called ING Direct USA CEO Arkadi Kuhlmann to ask about this seemingly unprecedented move, he couldn't apologize fast enough. "That was obviously an error," he said of the mass e-mailing. "The letter was worded wrong. . . . We do not give or deny one of our accounts" based solely on credit scores. The bank does use credit scores, he said, to help determine the size of a customer's overdraft line of credit. Within hours of my phone call, ING Direct customers who received the original e-mails reported receiving e-mails from the bank's chief operating officer, Jim Kelly, apologizing for the mess and assuring them their accounts would be restored.

What you can do: If you run across an obviously unfair bank practice, don't keep it to yourself. Someone who received the original ING Direct e-mail posted a message about it on the Consumerist Web site; Wachovia's practice of "potential" overdrafts was highlighted on Wesabe.com. Shout about what you see on those sites, or on MSN Money's own Your Money message board. Draw enough attention, and perhaps we can head off some of the worst policies before they become "industry standards."

Published May 21, 2007

Network left the low-rated ‘Apprentice’ off its fall schedule

	Donald Trump won’t be firing anyone on ‘The Apprentice’ next year. NBC left the show off its fall schedule.
Chris Haston / NBC file

LOS ANGELES - Donald Trump, whose low-rated reality show “The Apprentice” was left off the new prime-time schedule unveiled this week by NBC, says the network can’t fire him — he quits.

The real estate mogul issued a statement on Friday saying he has informed the U.S. television network he is “moving on from ‘The Apprentice’ to a major new TV venture,” though he declined to elaborate.

There was no immediate comment from NBC.

(MSNBC is a joint venture between NBC and Microsoft.)

But his announcement appeared to end any lingering doubt that “The Apprentice,” which turned the self-styled tycoon into a television star and popularized the catch phrase, “You’re fired,” would be banished from NBC’s airwaves next season.

The corporate-themed reality show, which aired in dozens of countries around the world, featured young, aggressive entrepreneurs in a weekly game of elimination as they competed for a real-life job in Trump’s business empire.

“The Apprentice” debuted as a hit in 2004, averaging nearly 21 million viewers and ranking as the top-rated new TV show its first season. But the series dropped steadily in the ratings in successive years, losing nearly two-thirds of its original audience by the time it wrapped up its sixth installment last month.The show’s future was cast into further doubt on Monday when the network announced a 2007-08 programming lineup that made no mention of Trump. But NBC executives refused then to absolutely rule out a reprieve once rival networks ABC, CBS and Fox had laid out their schedules for next season.

The statement from Trump’s organization seemed to spell a definitive end to the series.

“It looks like viewers will have to wait to see what Mr. Trump plans for the future,” the statement said. “But if Mr. Trump’s past TV success is any indication of the future, then one can anticipate that millions of ‘Apprentice’ fans will be migrating to his new venture.”

Trump and NBC still remain in the beauty pageant business together. The two announced in March a renewed deal to keep annual broadcasts of the Miss USA and Miss Universe pageants, which Trump co-owns, on the General Electric Co.-controlled network through 2010.

Power-One writes it off as a coincidence, explained away by the Internet stock crash at the time. "I think everyone understands that in the 2001 time frame the whole market corrected because of the Internet bubble, and Power-One is one of the stocks that got hit hard," says Dave Hage, who handles investor relations for Power-One. "I think they were stretching in their research, but so be it."

But this indicator doesn't just work with busted dot-coms. You could have made as much as a 45% gain by shorting Hilton Hotels (HLT, news, msgs) in the late 1990s after Hilton's chief executive, Stephen Bollenbach, purchased a 12,854-square-foot house on 2.9 acres in Los Angeles. (By going short, investors sell a stock they do not own, hoping it declines so they can buy it back and replace it at a lower price in the future.)

David Perdue took the reins at retailer Dollar General (DG, news, msgs) in April 2003. By 2004 he was building a 9,890-square-foot, six-bedroom, seven-bath dream home in Nashville, near the company's Goodlettsville, Tenn., headquarters. The home was recently valued at $2 million and is nestled on $829,000 worth of land, according to Intelius, an online database.

The year Perdue's house was built, his company's shares traded in the high teens and low $20s, and finished the year at $20.27. The stock started off strong in 2005 but then went into a steady slide, falling to $12 a share by Aug. 30, 2006.

The opposite indicator applies as well, according to the study. There may be no better example than Warren Buffett, the chief of Berkshire Hathaway (BRK.A, news, msgs), who still lives in a house he bought for $31,500 in 1958 in an ordinary neighborhood of Omaha, Neb. Berkshire Hathaway's share price has advanced 34,820% since the start of 1980.

Fat, happy and well-housed

"It gives you some insight into the CEO's mindset," Yermack says. "An entrenched CEO perceives himself as immune from discipline by his board and is uninterested in maintaining or improving his performance to attract outside offers."

Yermack and Liu define a CEO home as extravagant if it is 10,000 square feet or bigger, or if it is on an estate of 10 acres or more. The two, looking back at 35 years' worth of data, sold stocks short when companies' CEOs bought mansions and bought stocks of companies whose CEOs bought humbler abodes. Over time, they simulated shorting 23 stocks and purchasing 141 stocks. On average, positions they added beat the S&P 500 Index ($INX) by 15% in the six months after the stocks were shorted or purchased, by 29.2% after one year and by 46% after three years.

"There aren't many investment strategies that do that well," says Yermack. "It is shockingly large in terms of what you see in financial research."

Stocks also tend to do poorly when CEOs finance a home purchase partly by selling the company's stock, even if the selling is relatively small. Yermack speculates that CEOs may be using the home purchase as an alibi for selling stock, when they are really selling because they see bad news ahead for the company.

Heavy lifting

Though online databases such as Intelius and HomeInfoMax have extensive national records of real estate transactions -- all part of the public record -- it's not always easy to find the CEO home purchases. Yermack and Liu found home purchases for CEOs at most of the S&P 500 companies. But they had to do extensive sleuthing in voter registration records, employment contracts and political-contribution databases to nail down many transactions with certainty.

One thing to consider: The CEO Home Purchase Indicator could keep you out of stocks that do phenomenally well over the long term. FedEx (FDX, news, msgs) Chief Executive Frederick Smith purchased a 10,320-square-foot home on 11.75 acres in Memphis, Tenn., in August 1986. The home and land were recently assessed at $3.4 million, according to Intelius. FedEx stock traded for around $15 at the time, adjusted for splits and dividends. But then it slipped below $9 by early 1988, a significant fall. It didn't close above $15 again until September 1993. So far, so good. But since then, the stock has taken off, advancing eightfold to close above $120 earlier this year -- all on Smith's watch.

At the time of publication, Michael Brush did not own or control shares of any companies mentioned in this column.

Hello everyone!

This is one of the most sick and disturbing stories that I have ever read. It's from Canada so you will note the different English. Any comments out there?

VICTORIA (CP) - The diapers hold nine cups of fluid, are made of six layers of cotton and micro-fibre, dry in an hour, are reusable and come stylishly in white or burgundy with Velcro closures.

A company in Kitchener, Ont., is advertising them on the Internet for $35 each - two for $60 - and say they are a perfect fit for "gamblers at all-night casinos," among other people. It alarms Prof. Tim Pelton, of the University of Victoria's Centres for Addiction Research.

"That's very troubling that there are people like that who are struggling that much," he said.

Pelton is working at trying to measure problem gambling among Canadian youth and he took particular notice of a survey conducted by the B.C. Lottery Corp. and released recently through an Access to Information request.

The survey of casino workers found many workers polled said they regularly see problem gambling up close, including people wearing diapers so they don't have to leave the machines to use the washroom.

Many of the employees who responded to the survey three years ago admitted to being uncomfortable with what they saw.

Paul Smith, the lottery corporation's director of public affairs and corporate social responsibility, said the organization is constantly attempting to give its employees more tools to spot and potentially help problem gamblers.

But he added: "We're not really interested in having card dealers become problem-gambling counsellors, but the protocol in the casinos is if they spot problem behaviour they alert a supervisor or a floor manager or someone senior."

"They will then interact with the patron, hopefully encourage them to take some time out and talk about some of the behaviours they are seeing and hopefully guide them into a discussion about problem gambling."

It's not like a bartender who almost always knows when a customer has had too much to drink and must be cut off, said Smith.

Identifying a problem gambler is a subjective exercise as some of the behaviours associated with problem gambling could also be related to other behaviours, some as common as disputes with a spouse or other patron, he said.

"We think a lot of our approach at the casino level is all about making sure that the player is well-informed, that they understand what are the things that I can do to gambling responsibly, like setting a budget and putting a time-limit on your self," he said.

Pelton said finding out what triggers problem gambling is a relatively new area of research, but it deserves more attention because gambling isn't going away as governments can't seem to resist the lure of the gambling dollars that fill their revenue coffers.

The B.C. government reported revenues of more than $980 million last year from the Crown-owned B.C. Lottery Corp.

"We just don't know enough about it (problem gambling)," said Pelton.

"That's the main problem. We're enjoying the fruits of the system that makes money for the government, but we haven't necessarily pondered or reflected upon or done research on the impacts to society."

People who wear diapers to casinos are not increasing their chances of winning, he said, and it indicates their level of delusion about playing the machines.

"Those machines are entirely random in their behaviours."

A spokesman with B.C.'s Gaming Policy and Enforcement Branch said the numbers of addictions counsellors are increasing and so are the budgets.

The government is increasing the number of addictions counsellors this year to 37 from 31. The counselling budget is rising to $7 million next year from $4 million this year.

The budget will be $8 million in 2008-2009.

There are currently two people in the province who have the right to conduct direct interventions with problem gamblers at B.C. casinos, the spokesman said. The number is set to grow to seven in July.

The government's goal is to have one direct intervention counsellor in every casino in the near future, the spokesman said.

There are 17 casinos in British Columbia.

Smith said recent surveys indicate B.C. casino employees are more attuned to spotting potential problem gamblers and are more comfortable with offering them help.

He would not directly discuss the issue of people wearing diapers into casinos other than say it is a scenario that has been mentioned in at least one employee questionnaire.