People pay a lot of money in fees to their financial institutions. In 2018, Americans paid more than $34 billion on overdraft fees, according to Moebs Services, an economic research firm. But many consumers aren’t aware of how much they pay in fees, and they don’t have the time to read account statements or haggle with customer service representatives to get them refunded.
Recoup is an online solution built to help customers get their bank fees waived and posted back to their accounts without hassle. Here’s how Recoup can help you recover fees, and how to tell if it’s the right solution for you.
What Recoup offers
According to Recoup co-founder Michael Ferguson, most consumers don’t know how much they pay in fees to their banks and credit card providers. Small fees may not seem significant, but over time they add up. Recoup’s customers incur an annual average of $753 in fees per bank account, Ferguson said.
While it’s possible for customers to request waivers and refunds directly from financial institutions, locating the fees and identifying which ones are likely to be recovered can be challenging. Customers may not have time to fill out forms or negotiate with banks.
Recoup takes on that process by monitoring accounts, identifying fees to recover and submitting claims directly to the financial institution, with no work required on the part of the customer.
How Recoup works
Creating your account
Getting started with Recoup takes a few minutes. You create a Recoup account, answer some basic questions and link your existing banks and credit card. Recoup may require information including any hardships you are enduring, your bank and credit card logins, bank account numbers, credit card numbers and expiration dates, your address and your signature. Currently, Recoup supports more than 15,000 financial institutions.
According to Recoup, connecting your accounts is secure and information transmitted to Recoup is encrypted. Your data will not be shared and is deleted permanently if you close your account.
Once your accounts are connected, Recoup’s technology begins reviewing your account to find the fees you have paid. Their artificial intelligence identifies fees that have already been refunded to remove them from the process.
Recoup also looks at account activity and your average daily balance, and will attempt to spot banking errors. This information, along with any economic hardships you mentioned during the onboarding process, will be used to file claims with financial institutions.
The fees Recoup looks for may include overdraft fees, insufficient funds fees, monthly maintenance fees, late payment fees, cash advance fees, ATM fees, international transaction fees, balance transfer fees, stop payment fees, minimum balance fees, excess transaction fees, hard copy statement fees, ATM replacement rush fees, check image fees and inactivity fees.
Because Recoup works with more than 15,000 financial institutions, the process to file a refund claim can vary. However, it generally follows a predetermined format: Once Recoup has identified a fee to recover, it compiles and submits a claim directly to the financial institution, based on your personal information and optimized for the institution’s prior refund history. The information in the claim may include your name, address, the last four digits of your account, the age of your account, information regarding the fee, your signature and any economic hardships you are experiencing.
The refund claim is sent to a decision maker at the financial institution for review. If the financial institution doesn’t issue a refund within 30 days, Recoup may resubmit to a new decision maker.
The decision of whether to waive a fee lies with your bank. Recoup does not guarantee success. Banks typically take anywhere from a few weeks to 30 days to process a refund request. If a refund is posted to your account, Recoup will notify you.
The cost of successful refunds
Ferguson said customers who link their primary bank account and three credit cards see, on average, $225 in refunds within the first 90 days, assuming they have incurred fees, their account is in good standing and they haven’t already received many refunds.
Recoup says customers receive an average of $571 in refunded fees annually.
Recoup collects a commission of 25% of all refunded fees. This rate is in line with other industry competitors.
The advantages & disadvantages of Recoup
Recoup is appealing for its ease of use, automated process and straightforward pricing structure:
- Recoup automatically monitors your account activity for fees to recover
- Recoup communicates with the financial institutions so you don’t have to
- Recoup collects a flat 25% commission only when you receive a refund
It’s a viable solution for someone who pays a lot in bank fees and wants to put money back in their pocket, but who doesn’t have the time or desire to locate fees or deal with financial institutions. (Learn whether credit cards or banks are better for your money.)
However, there are a few potential downsides:
- Technically, any customer can request waived fees directly from their bank or credit card provider. If you have the time to identify fees and attempt to recover them yourself, you can save the 25% commission on any refunds you receive.
- Recoup requires you to link your accounts and provide access to personal information. While there are security measures in place, some people may not feel comfortable sharing detailed financial data with a third party.
- According to Recoup, their services aren’t for chronic overdrafters, people whose bank balances have been negative for more than two weeks, or anyone who fails to make consistent credit card payments.
For those who want to deal with the financial institutions themselves, there is a free Recoup Self-Service option. With this plan, you connect your accounts and use Recoup to identify the fees you’ve paid, but you do the work of submitting claims for refunds.
Recoup provides an affordable and easy way to pay less in fees without the hassle of dealing with financial institutions. For a 25% commission, you can start seeing money land back in your account. If you’re unlikely to pursue refunds on your own, Recoup can help you reduce the financial drain of fees.
But Recoup isn’t doing anything you can’t attempt to do yourself. Make sure to weigh the ease of outsourcing this work against the cost of giving up 25% of your refund.
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