“Basically if you’re an average person, you’re left to fend for yourself in this complex, constantly changing landscape,” says Paul Kesserwani (Cushion founder and CEO) of the U.S. banking industry. Considering the vast majority of American citizens would be considered “average” by ordinary standards, Kesserwani decided years ago that this consumer-banking dynamic didn’t sit well with him.
Having graduated with a computer engineering degree from Cal Poly San Luis Obispo in 2008, Kesserwani was thrown into the workforce amidst one of the most severe economic downturns in modern U.S. history. It was then that he realized the financial system was not designed in favor of consumers. Years later, that realization only became more personal when he found himself in a string of confrontations with the banks, attempting to negotiate fees on both his and his parents’ accounts.
Bank and credit card fees are a $200 billion industry in the U.S. Eager to alleviate one of the more common financial strains faced by American households today, Kesserwani launched Cushion—a web app designed to automatically negotiate bank and credit card fees on consumers’ behalf—in 2016.
Cushion leverages artificial intelligence, advanced fee-detection technology, and bank-level encryption to put people’s hard-earned money back into their accounts. To date, the web app has reclaimed more than $3 million for its users.
It supports all 15,000 U.S. banks and credit unions, and handles a wide variety of bank penalties on credit cards, checking accounts, and savings accounts, including overdraft fees, ATM fees, monthly service fees, credit card interest charges, late fees, wire transfer fees, foreign transaction fees, and more.
Consumers can choose between three subscription plans ranging in price and number of negotiations per month. Each plan is billed annually and allows users to keep 100% of their refunds. After signing up and linking a bank account or credit card, the user hands the hard part over to Cushion.
The web app will scan accounts for previous charges and launch negotiations for the fees it determines have the highest likelihood of being refunded. Cushion has analyzed more than $13 billion worth of transactions, so it’s complex algorithm has determined which fees are worth negotiating and exactly what arguments to use when contacting the banks. It will then continue monitoring consumers’ accounts for future fees and launch negotiations on those when the time is right.
Unfortunately for consumers, many banking issues have remained the same since the great recession hit about a decade ago. Finances still weigh heavily on American households, and financial institutions largely have not changed their strategies on how they penalize consumers for certain transactions, such as overdrafting. In fact, fees have increased.
According to a recent Cushion report, bank fees have risen, spurred by another recession, this time pandemic-related. Since the onset of COVID-19, the average combined bank fees and interest charges per person per month decreased from $106.70 in March to $90.60 in April, but has since risen to $130.60 in August—the highest average that Cushion has seen since launching in 2018. For overdraft fees alone, the average fees more than doubled, from $34 per person per month in April to $71 in August.
Jobless and desperate, many consumers have turned to Cushion during these financially trying times to reclaim some of the money that went to overdraft and non-sufficient funds fees, money that would’ve been better spent on groceries, rent, and utility bills.
Although financial institutions implemented certain relief efforts to aid struggling Americans during the pandemic, some efforts missed the mark.
“Banks are trying, but they can’t react fast enough,” Kesserwani says. “Banks are like massive ships and can’t turn on a dime, so it takes time for those changes to propagate through the institutions and get applied—which is why customers need to be extra vigilant and stay on top of things themselves.”
As an intermediary between consumers and their financial institutions, Cushion helps users stay on top of things by facilitating negotiations. Handling personal finances can be a time-consuming and exhausting process; Cushion takes on that burden for users by freeing up their time and energy.
Cushion’s ultimate goal is to help consumers waste less money, save more, and live a financially healthier life by building out a digital CFO of sorts to manage users’ money for them better than they can. For now, consumers can use the web app as a resource to reach their banks (through no effort of their own) and take back control of their finances—one refund at a time.