In an effort to reduce processing costs, Citicorp has increased the fee it charges for bounced checks to $25 from $15.
Susan Weeks, a Citicorp spokeswoman, said the move on bounced-check fees does not run counter to the company's announcement earlier this year that it would eliminate many fees.
The charges eliminated, she said, were "nuisance fees, the kinds of services customers don't need on a regular basis."
Raising the fee for bounced checks, she said, would force customers to monitor their accounts more closely and "improve efficiency" at the bank.
The higher bounced-check fee took effect May 1.
Customers have a range of free options available for avoiding bounced checks, Ms. Weeks noted, such as linking their checking accounts to their savings or money market accounts as a backup.
Ms. Weeks did not respond to a request for information on how many bounced checks Citicorp processes annually or whether the total has been increasing.
Last year, Citicorp dropped transaction fees for using its automated teller machines. It also waived fees for electronic bill payment and for banking via personal computer. These moves were part of an aggressive drive to convince customers to make their retail transactions electronically.
In January, the bank also dropped another group of fees, including those for stopped payments, certified checks, notary stamps, and bond coupon redemptions.
However, the New York-based bank continues to charge $15 whenever customers order new checks, as part of a broader effort to reduce check usage.
"Banks are trying to discourage checks because they have to be handled manually and increase costs," said Cynthia Glassman, managing director of Washington-based Furash & Co., a consulting firm.
"Increasing fees for bounced checks is kind of like a parking ticket - it's a deterrent," she said.
The analyst noted that the two main reasons for bounced checks are carelessness and fraud. She added that most banks do not disclose information on bounced checks.
"It's not something banks want to share with the public," Ms. Glassman said.
