Banks Can Manipulate Your Transactions, Then Charge You 1750% Overdraft Fee

By Will Chen. Last updated 5 July 2011. 186 comments

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When Jeff Ledford overdrew $10 from his checking account, Bank of America charged him five separate overdraft fees totaling $175.

That's a 1750% interest for going over $10. (Jeff is unemployed, by the way.)

Your Bank's Dirty Trick

Jeff got screwed because his bank dealt with his charges out of order, processing the largest transaction first.

This common practice allows banks to deplete your account faster, thus making it easier for them to charge you unnecessary penalties.

This was not a one-time mistake or the stupid policy of a single bank. This is the industry standard. No wonder banks are set to make a record $38.5 billion in overdraft fees this year. (See also: Debit Cards vs. Credit Cards: Fees and Fraud Protection)

Your Accounting vs. Your Bank's Accounting

Most customers expect banks to take out money in chronological order like this:

Date Description Debit Fee Balance
10/1 Smoothies $5.00   $185.00
10/2 Gas Station $29.00   $156.00
10/3 Coffee Cafe $8.00   $148.00
10/4 Electronics $90.00   $ 58.00
10/5 Supermarket $105.00 $35 -$47.00

 

Since the overdraft happens on the last day, you would expect only one overdraft fee.

But that's not how your bank sees it. They've decided to process the largest transaction first:

Date Description Debit Fee Balance
10/5 Supermarket $105.00   $85.00
10/4 Electronics $90.00 $35 -$ 5.00
10/2 Gas Station $29.00 $35 -$39.00
10/1 Smoothies $5.00 $35 -$44.00
10/3 Coffee Cafe $8.00 $35 -$52.00

 

Thanks to your bank's creative accounting they can now charge you four extra overdraft fees!

This Could Happen To You

This is a very common practice, reports CBS 13 News which broke this story.

When CBS asked bankers to respond, they justified this as a service they provide to their customers!

Rod Brown with the California Bankers Association says it's normal practice for banks to process charges from the largest to smallest.

 

He's quick to point out, there's no law that says they can't. When Kurtis asked him if he could see how the public would think the banking industry is manipulating charges to make the most profit, he said, "No I can't."

 

"Consumer research indicates that those larger transactions are of greater importance to the consumer," Brown said. "It might be a car payment. It might be a mortgage payment."

 

CBS asked Brown, "Shouldn't I, as a consumer, be able to determine which payments are most important first?"

 

Brown replied, "As a consumer what you can control is the fact you either have money in your account or you don't."

That's not entirely correct. We also have control over other things. We can take our money elsewhere, stop bailing out the banking industry, or support legislation that will reform overdraft policies.

I personally agree with CBS that the consumer, and not the banks, should decide which transactions are the most important.

What do you think readers? Are the banks acting in your best interest with their accounting rules?  Do you have an overdraft horror story?

If you're not familiar with all the traps your bank has set for you, check out Philip's excellent guide to avoiding unfair banking fees.

(Chart credit: BruinKid of Daily Kos and CBS 13.)

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Guest's picture
Guest

Very Eloquent!

Guest's picture
Guest

Good for you Vanessa for closing your account when you found that out. Banks can't get away with this.

Guest's picture
Seth

While I've been careful about not incurring overdraft fee's, the one thing I have had my bank do is when I had someone elses check bounce (that I was depositing into my account) my bank charged me a fee for their check bouncing and told me I should get the money from the person who's check bounced... I was thinking: Umm, if the check bounced, what money are they supposed to pay the fee with?

Guest's picture
Gaillynn

I was going to withdrawl money from a Dollar Bank ATM and I decided to cancel the transaction and was then charged a fee of .50 for canceling it. Since when it banks start charging someone for NOT withdrawling money from their machines?

Gail

Guest's picture
Dave

My credit cards now have two rates. My regular contracted rate and the rate they will switch to if I am ever late. This is usually around 30% and applies to my entire balance, which in some cases may exceed $5000. I find that payday loans, although extremely expensive themselves in terms of APR are preferable to having the lender boost my credit card rate to 30%. The same applies to bounced check fees.

Guest's picture
David in Newnan

BOA has done this to me a couple of time. I will be shopping for a different bank. Yes I will accept the first charge as MY FAULT and yes I should keep my accounting in check, but I am human and make mistakes sometimes, So I will accept the one charge I cause but not the other four from their creative posting!

Guest's picture
Guest

Thanks to Wells Fargo and Walmart, I have been screwed out of $494.

A few days ago, I made Christmas gift purchases from Walmart. Totaling $156.00. They immediately withdrew it from my account, as expected. Three days later, I checked my account to find that I had a balance of $144 on it. Now, I had been expecting a bonus from work from the prior month before (November) because I was paid time and a half for both Thanksgiving and Black Friday. Now, being suspicious I waited a day.. The money still remained in the account, so I went and purchased a few more gifts and treated my fiance and myself to lunch. A few days later, I made a startling discovery of -327 on my account. Confused as to why this happened, and seeing all of the over draft fees, I called Wells Fargo. They told me that Walmart had taken the money out of my account, put it back IN my account, and then had TAKEN it out again. Thus, leaving me with a "negative" balance. I explained to the banker that my account was not in the negatives when I made these purchases, and they went on to transfer me to a Supervisor who told me that it was legit.

Now, not being able to argue anymore, I accepted my fate, blaming only myself.. My checks are around $600 every two weeks. And that being half my check, and my fiance and I barely making it as it is put us in devastating mood. We crunched our numbers, and decided we could make do with what we were going to get only to have our hearts shattered when they added MORE over draft fees two days later.. Causing a total of $494 that we owe our bank.. We have just gotten our check direct deposit.. We have a total of $130.

My question is.. Is this legal? Because this doesn't seem legal to me.. And if it is.. How is it possible? I can see them taking out the $144 out of our checks.. But why do we have 10 over draft fees when our bank account was not in a negative.. And is it legal for walmart to take our money out, put it back in and then take it out again?

Someone please respond.

Guest's picture
Ell

While I agree that someone overdrafting themselves 5 times a month may have other issues I find the practice of what most banks do terrible. I spent 1.5 hrs arguing with citizens bank over .19 (yes nineteen cents). I have done really well for awhile but I have an issue with numbers. Sometimes it says 3 but for some reason my brain sees a 9. I had a electronic check sent out but it was supposed to go out the following week, it was sent out a week early and it put me .19 in the red. You guessed it. $39 overdraft fee. The customer service was terrible... I even had provided them with medical documentation of my disorder.... They don't care. They just want their money. For a long time customer... they were willing to lose my business over .19 when I repeatedly told them I did not want overdraft protection. My search for a more human bank continues....

Guest's picture
Guest

I've had a Wells Fargo account since I was 16, and a Bank of America account since I moved to Boston about three years ago. I have never been dinged with an overdraft fee, or any other fee for that matter. Here's my secret:
1) Keep track of how much money you have.
2) Do not spend more than that amount.

I know, I know, that involves something called personal responsibility, something most people don't want to have to deal with nowadays.

The previous comments calling banks immoral made me laugh out loud. The banks are offering a service, and you are voluntarily doing business with them. Unfortunately this means you will have to play by their rules, which may end up hurting if you don't have any of the above mentioned responsibility.

If you hate the banks and their practices so much, close your account. Nobody is forcing you to do business with them. It's that simple.

Guest's picture
Guest

lol! just wait till Wells Fargo does this to you. No really, do you really think that all these people on here are irresponsible with their money? I had a $100 balance in my account. 2 days later i was overdraft for $495! I had an $85 bill and my husband put $12 gas in the car. Should be ok right? but oh, what’s this?! Wells Fargo had erased previous debits made a week before and re-posted them thus incurring a $35 fee for every singe one.
Do you think the bank is being fair when it takes old transactions and pends them for over a week (small ones for amounts like $1.50) and then magically posts them all on the same day thus putting you in deficit?
What a joke.

I understand backs have rules. But when you deliberately are being deceptive that’s where the line has to be drawn.

I’m sorry but when you are on a budget you are ALWAYS careful with your money. I am so tired of all the dirty tricks. and YES they are tricks there has to be ONE set of rules that the bank and the consumer both follow, not the bank can do what it likes when it likes.

Guest's picture
Guest

You know, I agree with you. Banks are not an evil monster and are NOT forcing you to have an account with them. A bank is a for profit industry. And as far as them 'holding' your debit card purchases until you get close to a zero balance, don't flatter yourself. NOBODY at a large banking institution is staring at your account and waiting. The order that a purchase is submitted to a financial institution depends on when the merchants batch their machine. If you really want to complain about it, go to the merchant.

Guest's picture
Doc

Chase is doing this to me right now.

I had $230.04 in my account.
Paid my bill for $112, which left me with 118.04. Then I had debits in this order for $3.95, $10 & $5. Which left me with a balance of $99.09. I WITHDREW $20 from my account and had $79.09 left(Theres no way I can take money from my account if I have a negative balance, The reps at chase swear you can).

Then I knew T-mobile was going to take out $246.20 on friday. Id be in the negative for $167 which would have been paid off the next morning so at most there would have been 1 overdraft fee if i didnt pay that off the next day. They took all of those transactions and re-arranged them. They put $246 first then overdrafted my account by $16. Then the $112,$10 & $5, $3.95. Charged me 5 Overdraft fees of $35 a piece now I owe $361 because of them.

I have mobile banking so I recieve a txt everytime anything happens on my account. I have every txt and reciept showing the order they happened and the amounts i had in my account.

Guest's picture
Robert

I have had similar thing happen to me such as a $35 fee for a $0.05 charge...thats a 70000% interest. Along e\with this were 3 5 other fees totaling about $5 costing me over $150 in charges. Later i was charged $105 for a total of $3 in charges. I thought it couldn't get any worse...then today, i was charged $105, which was the amount of my last check, and when I went to the bank to see what was going on I found that not only had i been charged an $70 fo goin over by under $2 but i had been charged an overdraft fee because i had made a deposit before one came through and that overdraft fee put me in the negative and caused me to incur another fee...i dont see how that can even be legal, because then there is nothing to stop banks from doing that to anyone that they want to. consider this senario; you check you forget to write down a charge for a $1 drink at a store, causing u later to be overdrawn for a less than $1, you get to the bank and make a deposit to correct this, their overdraft puts you back into the negative, they then charge you an overdraft fee for that, now whats to shop them from charging you another fee just for the hell of it, and another, and another, and so on and so fourth, something needs to be done or banks could just keep charging and charging without end.

Guest's picture
Guest

This blog helped me immensely when dealing with overdraft fees. http://livefrugallyordiebroke.com/?p=865.

Guest's picture
Guest

Banks should process payments as they come in, not rearrange everything so they screw you in the end and you wind up with several late fees instead of one. I don't think their practice will ever change unfortunately. They are so money hungry they can do whatever they want.

Guest's picture
Guest

I love the people who say not to spend more than you have or balance your check book. It's like Suzi Orman's advice in order to save money, you have to pay yourself first. Don't ya think we have thought of ways to save, Suzi? Well guess what? You guys who spit shame on us poor wretches...I bet you're all rich and republican and can never outspend your accounts. My account was charged an overdraft fee due to falling below a threshold, even though I could cover my item. Then they charged me an overdraft amount to take money from my savings (MY MONEY) and the fee actually put me into a negative balance so they slammed me with another whopping fee for that. Fair? NO...conflicts of interest! We are now going to be taken to the cleaners by any big corporation who wants to put their dirty stinking hands into our wallets. The wealthy never have to worry their pretty little heads over that. So they should keep their little mouths tight like their wallets. TEA PARTY TIME PEOPLE

Guest's picture
Guest

I think that some of you that are saying, manage your money better, do this, do that, blah blah blah, are probably in a pretty comfortable situation where they don't have to decide between electricity and diapers and food for their children each paycheck.  Yes, I've been SCREWED by Wells Fargo.  I have direct deposit, I know how much money will be going into my account each paycheck, what is due to automatically debit and so on and so forth.  I painstakingly budget my bills and spending money.  However when you do online banking with Wells Fargo, how can I put it.....transactions mysteriously disappear from time to time.  For example, I ate at Buffalo Wild Wings two weeks prior to the incident.  The transaction showed pending for a couple of days as usual then disappeared from the pending area, so I ASSumed (wrongly, of course) that the transaction posted and my balance was as stated on the website.  So I go about my business, checking my balance every couple days as I pay my bills.  Next thing I know, overdraft fees.  Why?  Because that charge from 2 weeks ago suddenly reappears on my account and throws off all of my charges.  Complete BS in my opinion.  And I don't think that people that are living paycheck to paycheck are saying they want to ability to spend willy nilly and have no consequences.  I think what everyone wants here is something that is not so close to getting RAPED by the bank.  Sometimes, when you're not so fortunate, you have tough choices to make, and I might be in a situation where I NEED to make a purchase and in that case, I'll rightfully take the charge for the ONE fee that put me over.  But the BS of the bank reordering transactions is ridiculous and needs to stop.  Wells Fargo is notorious for this practice and I've even done a screen print and showed them the order of the transactions to no avail.    Oh well, such is life.  And for those of you that want to judge because I must live paycheck to paycheck, I hope that you never find yourself in that situation, because quite simply, it sucks.

Guest's picture
Laura Lee

Just this week I was charged $78 for overdrawing my account by .06.  The .06 led to a charge of $34 that caused the next payment that came in to be bounced (although it wouldn't have been without the overdraft charge.) 

Guest's picture
Guest

Yes I have a story just like that it happen to me more than once I am tired of it and looking for a new bank that allows you at less 10 days to get overdraft or pays the things in the order you pay them bank of america held on to my payment for a week until they knew when I make a big payment and it all post on the same day they tellers know it wrong and try to give some back but there managers won't if the call them I might look into a cridet union.

Guest's picture
Guest

The bank is deliberately being deceptive. It has on several occasions re-arranged my transactions, and i have noticed it has the curious habbit of removing a debit made over a week ago and re-posting it as made today thus incurring overdraft fees (even though i made this purchase over a week ago and hade money in the account!). How is this fair when they have the power to deliberately re-arrange my balance to suit them?
Not only that they lie about your real ballance. The bank seems to think its perfectly reasonable for them not to process my deposits in a reasonable time but think its ok for them to take money from me and post debit transactions at a time when it is most proffitable to them.

After 2 years of being with Wells Fargo i have realised it is IMPOSSIBLE to track your transactions. and very hard to budget if money is tight. I am closing my account as of tomorrow.

I have heard that wells fargo is not going to be charging overdraft fees as long as you dont go over negative $5. What good is this if they can simply pend transactions whenever they please they are only going to make sure they re-arrange your account so you go just over the $5.
This practice should be illegle.

Guest's picture
Guest

..scuse spelling..yikes..im tired..lol

Guest's picture
Guest

My bank did this to me one too many times, exactly as outlined in the article above. I was charged overdraft fees for purchases that posted and were more than covered by money I had in my account. I'm making arrangements to move my money elsewhere and in the meantime I'm refraining from using the debit card altogether. Like someone else said earlier, use cash any and everywhere you possibly can. As soon as your direct deposit arrives, withdraw that money and DON'T use the debit card. If you deposit a check, do NOT make ANY purchases or write any check until that check you deposited clears, then when it does, take that money out of your account and leave just enough for minimum balance (about $25 or so), or open an account with a credit union. Another option is to sign up to get one of those reloadable debit cards. You can arrange for your direct deposit to be put there, even for social security payments, unemployment, etc. All you need is an account number and routing number. The reloadable debit card company is all too happy to give you one.

Don't let these banks rob you any longer. They're helping themselves to free money from the consumer and it's time put an end to that.

Guest's picture
Guest

I fucking hate banks! My bullshit bank is pulling this **** on me right now, adding 5.00 fees every day that I'm overdrawn! I can't help if I have to wait a few days to add more money in. If I was made of money, that I can pull some out of my ass every time something like this happens, I'd have no reason to use a bank at all. They are inherently evil. Not that I'm religious or anything, but didn't Jesus warn against "money changers"? And to add to this long winded rant, those trillions given to the evil bankers in "bailout" wasn't enough? They have to fine customers for everything they can? Greed. Simply stated - greed.

Guest's picture
Guest

you shouldnt have overdrafted in the first place. be responsible for once in your life and stop blaming other people.

Guest's picture
Guest

"you shouldnt have overdrafted in the first place. be responsible for once in your life and stop blaming other people." You don't know the back story. Try eating a bowl of dick before spouting off your mouth about me responsible for once in my life. This was the first and only time this has ever happened to me, and I was treated like someone who regularly overdrafts their account.

Guest's picture
Michelle

Oh this subject pisses me off more than anything! I do agree we should all be more responsible with balancing our bank accounts... blah blah blah. But as spending your money becomes more convenient, keeping track of your account isn't as easy. I have about 5 payments that come out of my account automatically and several direct deposits. These all fall on different days of the month depending on holidays and whenever they decide to charge me. The amounts (especially the deposits) also vary so you almost have to be psychic to come up with a balance.

I found that it was easier to print my bank statements online and mark them off as I went through my receipts. Then I would subtract pending and future automatic payments and use the leftover money to pay bills online. I do not use my checkbook anymore. To me this seems old school. So I rely on the balance I see online.

I did notice that some transactions do seem to disappear and reappear days later. Also, if you look at pending transactions they do not account for tips you leave at restaurants and so on. I have also deposited cash that did not show up until the next day. I thought cash was supposed to be instant. There is this one sleazy clerk at the bank that seen my account was pending negative and when I deposited cash he manually applied overdraft fees to my account. He has done this to me twice and so I don't go to that branch anymore. I wonder if he gets a commission?

I have tried several times to be "more responsible". This seems next to impossible. I have also inquired about getting overdraft protection but they charge way too much for this service. I believe the banks should charge us for when we go negative BUT I also believe rearranging our transactions to charge more fees is ridiculous and should be illegal! I can deal with one or two charges but when they pile on the fees by reworking our accounts this makes it impossible to recover from. We make the decisions on which transactions are the "most important" when we pay them in the order we pay them. It is not up to the banks to decide.

Guest's picture
K

I've had this happen to me a few times. When checking my account online, I'd see that something had posted to my account. However, if I later caused an overdraft, the bank manipulated my debits so they could charge me outrageous amounts of $$! I don't mind being dinged for an item when the funds aren't available. Cool, I get that, but changing the order of receipt on items to stick it to me sucks!

HERE'S THE BEST TIP I CAN SHARE: Open a CREDIT UNION account and stop letting the banks rape you. Credit unions still have fees for overdraft, but they are fair in their dealings, since the credit union is owned by it's members.

Guest's picture
Anlmal Chln

I don't see the banks accruing massive fees when they have overextended themselves... The opposite occurs, they are provided billions from the taxpayer so they can 'make ends meet'. The fed forces the taxpayer to show economic compassion for an industry that shows zero economic compassion for their OWN customers. Sad...

Legislation can be passed (and has been) making it illegal for the banks to hand down 1000% in fees and the banks will simply find another means of pilfering their customers (ex: a convenience fee to simply have a checking account is on the horizon).

An individual customer makes bad financial decisions – slaughter them with fees.

A bank makes bad financial decisions – prop them up with tax dollars.

Guest's picture
Ed

I was charged $70 in overdraft fees by Bank of America and my statement balance never went negative. I don't know how they are getting away with this. One of the charges was for $2 at a grocery story. The kicker is I have an Iphone BofA app and it never showed I had a negative balance. One transaction I made at a gas station was showing up at $1 causing me to not have an accurate available balance. Just sneaky.

Guest's picture
Guest

creative accounting? it has more to do with the companies you buy things from and when they send in their batch. the banks hit right away. its not creative accounting. second, just look after you account. there is something called a check register people. i personally have had 1000 dollars of od fees but i havent had one for a while. you know, i have become responsible.

Guest's picture
Guest

Almost all of these scenarios can be avoided by keeping something of a minimum balance in your account, and recording your transactions in an actual register, using your receipts, and not the online bank balances.
So in the hypothetical example given in the article, the person knows on 10/5 that there is $58 unspent in his bank account. It doesn't matter what the online balance says, or what the text message he received from his bank says, because he's been keeping track, using his receipts. These receipts would even be accurate at restaurants, since he's been writing the tip amount on his copy. The money is treated as spent at the moment of purchase, not when it clears the bank. So he would know that he can't spend $105 at the grocery store before he goes.
I used do this kind of detailed record keeping when I'd get down to <$10 in my account as a broke college student. I feel better having a cushion now just in case, but it is possible to simply account for your spending and thus not ever overdraft (except in case of fraud or some kind of error).
I don't understand this mentality of being a victim to the banks. You know how much money you start with, and you know how much each transaction is when you make it. It's not the bank's fault if you choose to not keep track.

Guest's picture
Guest

I love my credit union. I left banks ten years ago because of the constant fees for everything. My credit union NWFCU has never pulled this sort of manipulative practice on me.

Guest's picture

Thanks for the article. Not only can they charge you an astronomical fee, but they can now withdraw money from your savings account to pay for it! They must notify you in adance, but some are just going ahead and making the withdrawal without notice. Beware!

Guest's picture
Brad

I have definitely had this happen a few times. In a perfect world you wouldn't have to but people make mistakes and I am no exception. Usually with me it was a check I wrote at the last minute and simply forgot to account for it when I got home. I have had two times where the bank would post all debits before any incoming credits. Both times I was able to get the fees reimbursed, but it really makes no sense to me that if you are showing a deposit is posting why that wouldn't be the first in the order. One of my transactions bounced over a $20 co-pay and instead of posting the bi-weekly direct deposit first they posted the debits from largest to smallest and instead of one bouncing 4 transactions bounced. The bank man couldn't explain that to me. Not only that, but I could have sworn one of the transactions had cleared the night before.

Definitely a good idea to watch your account very closely, but anyone that expects perfection is being unrealistic. Stuff happens.

Guest's picture
sheldon

Hey, i say make your own buisness of a bank... then dont charge over draft fees >.<

Guest's picture
Guest

This happened to me! I was able to get the bank to agree to waive half of the overdraft fees they charged, but they still came out way ahead.

Guest's picture
Danielle

mr brown's logic doesn't make any sense. hierarchy of importance is a moot point when all of the payments are going to be paid regardless since the individual has OVERDRAFT PROTECTION

Guest's picture
A Cain

Hello,
I went to my online banking system last week and noticed 12
unauthorized NSF charges on my account within the year. I called the
bank and they refunded my account $180.00 but that was only 9 charges
I have emailed them that I am not satisfied with the refund and that
they still owe me 3 NSF refunds equaling $60.00. We will see how this
goes. I admit that I have over withdrawn from time to time but how can
a bank charge NSF to my account when I am not in the negative? This is
what has been going on. Then it causes me to go into the negative
because they have charged me NSF that they should not have. I bank at
a Federal Credit Union. It just seems very fraudulent to me.

Guest's picture
Lisa

Oh my gosh, I've had similar experiences. They just manipulate things to benefit the bank. It pisses me off. The government needs to regulate this so they can't take advantage of customers.

Guest's picture
Guest

Banks make a majority of these fees from about 5% of the people. I haven't had an overdraft for about 20 years. The money is manipulated in the banks favor but people would complain just as much if only one fee were charged and the bank bounced the mortgage payment while clearing the small purchases at the grocery, gas station etc.
The answer to this problem is simple...monitor your account better and no more free checking accounts. There is a cost for provding this service but people believe it should be provided at no cost to the customer. You can't have it both ways folks. New legislation will limit the banks income from this practice and the day of the free checking is coming to an end. Be prepared to start paying for your checking account.

Guest's picture
Guest

PNC bank has some manipulative tactics they show a transaction complete then return the money to my account and the transaction is no longer there. They try to get me into overdraft but I keep a very watchful eye on my money those jerks will never catch me with my guard down. I hate PNC anyway and I will be getting away from them very soon.

Guest's picture
Terri

Oh yes, this has happened to me before. One time, I managed to rack up 10 overdraft charges, that's over $300 in charges. If the bank had processed the transactions in chronological order, I would have only received one overdraft charge. At the time I was a and the charges where almost a month's salary for me. Thank God for the bank reform legislation that allows consumers to opt out of overdrafts!

Guest's picture
jennifer

Wells Fargo just did this to me too! Instead of having one OD, they took out the largest ones first in order from greatest to smallest= 5 OD's. Funny thing is the night prior I checked and it was fine. Went to bed 15 min before midnight, nothing there. Get up and the account is $8 neg, I transferred funds there to cover it. According to the OD services page you have added flexibility where they cover your debit and as long as you replenish your account by the cutoff time you will not be charged. The date was from the night before so it had to come out between 11:45 and midnight. Later there was 4 OD and the $10 I paid to cover the debits was moved up past the OD. I am closing my bank account needless to say

Guest's picture
Guest

jeff should consider banking at a credit union, where this kind of behavior is less likely.

Guest's picture
Guest

Had a similar situation with Chase. The worst part was when the bank claimed my (cash) deposit was not posted on their end. (Huh? What?) If it didn't get posted, then why does my receipt indicate a larger, new balance? Then why did my online bank statement (I logged on 30 minutes after the deposit was made) reflect the new deposit, and it didn't even have the pending status?

In a nutshell, Chase rearranged all my transactions in order to charge an overdraft/insufficient fee (ISF).

You know, the only solution to this heinous practice is to file a class action lawsuit. We should continue commenting on forums and varies websites, but these comments will carry more weight if actions are taken against Chase. Without any actions, banks like Chase will continue on; in fact, even more so during a struggling economy - an ailing economy in which banks contributed to (e.g. subprime loans, 27% APR default rates).

The revenue earned from overdraft fees will be used to pay for their billion dollar jets, million dollar executive pay (including compensation and stock options), and sky-high office renovations. In essence, banks like Chase are robbing us consumers blind and making us pay for their extravagant lifestyles, mismanagement, and investment mishaps. (Let's not forget when executives and board members used the bail out money aka TARP for billion dollar jets and injected millions into executive pay-packages and retirement funds.)

If we want to stop this, we have to press charges; we have to write to Congress and to our local legislatures; we have to write to our state attorney general. We have to act.

Guest's picture

I have no banking horror story, other than the entire banking system in the U.S. If you look at the big picture: How many failures? 500, yet? These companies are in trouble and, at this stage, who knows what they will do?

I would not hold my savings in a U.S. bank or in U.S. dollars, at least not all of it. Foreign banks in business-friendly jurisdictions with a proven track record of little or no corruption is the way to go. There are many places like this in the world and some of my savviest, most well-to-do, baby boomer friends are jumping ship.

Why risk it? If bankrupt banks are gouging like this, what do you think a bankrupt federal government is going to do? Pensions: seeee ya later. Have you heard of the "dead peasant" in insurance? State governments are now pulling a fancy trick where the insurance benefits that would go to the families of deceased state government workers now go to the state coffers! Read that sentence again.

At this stage, my view on certain American ‘lifestyles’ is this: obliviously lounging unaware at the beach or in the café. The average Pole, in the summer of 1939, wasn't concerned that Hitler and the Nazi's had lined up on the border. I use this example only to show you magnitude. As Doug Casey likes to say, and I see all sorts of reasons to heed his warning, "this isn't the biggest recession since the Great Depression, it's the Greatest Depression since the start of the industrial revolution."

Get used to corruption. Make it your friend to put it bluntly. What I mean by this is you better get wise to the new way of things. You had better look at the past and apply your findings to the future. You had better simplify your living, employing thrift and frugal living and common sense, because the game is changing in America.

Get out of U.S. dollars and American banks and hold 30% of your savings in currencies of countries with strong commodity-based economies, low debt, and little involvement in foreign ‘sport wars’ and 30% in gold and silver coins (not collectors’ coins, bullion like gold Buffalos and Maples). And, buy foreign farm land if you can and, if not, domestic farm land - figure out how to produce you own food, cheaply. Sound fanatical? Get your head out of the sand!

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Todd

I have been trying to get a B of A account closed for 6 months!!!!

It started back in October of 2010 when I filled out paperwork to get my checking and assosiated savings accounts closed. The man at the services desk told me that the savings was now closed but the checking required a period of time to assure that no additional charges would come through, and then it would close and I'd be done.

So come January of 2011 I get an email that says my statement is ready for viewing on line??!! What!? So i go on to the site and sure enough I did have an active checking account that, believe it or not, had a balance of -$28 for fees that had accrued sinse OCTOBER!!

I wrote an in-house email and got an appologetic responce within 3 days stating that the fees would be removed and the account would be closed. It's now April and because the account needs to be at an exact $0 balance to close it's still open because (GUESS WHY!!??) they've charged me more fees!! So the basic idea here is to cheat the customer, tell him what he wants to here, and by all means don't explain to him that he actually has to pay to get an account closed.

Needless to say this has caused my undue stress and psychological discomfort, I am now having banking nightmares, and where i need to be trusting in the world I have issues and am not sure how to deal at this point.

Any ideas?

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Coplin USA

I got charged a $35 overdraft fee on $3.60, then I got another overdraft fee on the overdraft, and then once more. 3 overdraft fees of $35 each for 1 $3.60 overdraft. Is it legal to charge overdraft fees on a overdraft fee? Coplin

Guest's picture
Kristeena

my question is, with a debit account, when you use your debit card doesn't it automatically take out the money, whether the bank is closed or not? I have Bank of America and I subscribed to get a text sent to me every day of my available balance. I get a text telling me I have 45 dollars and some odd change, i spend maybe 6 dollars after getting the text message. The next day I spend 8 dollars at a restaurant. So at this time according to the text I had received the previous day I should have had roughly 30 dollars. I get the balance text the next day telling me i have 17. Then I go to my BOA online banking account it says I have $8.60! I go to the bank and the clerk I spoke with prints out my statement which shows two whole pages of DEBIT transactions that all took out on ONE day when they had been made throughout the course of a week! She tells me it was because of the holiday weekend that my account was not up to date. I thought when you use your card as debit it is AUTOMATICALLY taken out. So turns out the text messages they were sending me wasn't right and apparently it's my fault! Maybe it's just me but I just don't think it's fair. Thinking about switching banks but not sure if it is all banks that would do this...

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Fed Up

These methods are the same methods accountants use to embezzle and they go to "Prison" as embezzlement is a "Felony" so I don't see why the law can't put a stop to this practice......Embezzlement is the act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted.[1]

Embezzlement is a kind of financial fraud. For instance, a lawyer could embezzle funds from clients' trust accounts, a financial advisor could embezzle funds from investors, or a spouse could embezzle funds from his or her partner. Embezzlement may range from the very minor in nature, involving only small amounts, to the immense, involving large sums and sophisticated schemes.

More often than not, embezzlement is performed in a manner that is premeditated, systematic and/or methodical, with the explicit intent to conceal the activities from other individuals, usually because it is being done without their knowledge or consent. Often it involves the trusted person embezzling only a small proportion or fraction of the funds received, in an attempt to minimize the risk of detection. If successful, embezzlements can continue for years (or even decades) without detection. It is often only when the funds are needed, or called upon for use, that the victims realize the funds or savings are missing and that they have been duped by the embezzler.Fraudulent: The requirement that the conversion be fraudulent means simply that the defendant wilfully and without claim of right or mistake converted the property to his or her own use.
Conversion: Embezzlement is a crime against ownership; that is, the owner's right to control the disposition and use of the property.[3] The conversion element requires a substantial interference with the true owner's property rights (unlike larceny, where the slightest movement of the property when accompanied by the intent to deprive one of the possession of the property permanently is sufficient)

now lets recap: the gentleman above Jeff Ledford was fine until that last transaction which put him -$10 plus -$35(overdraft fee) = $-45 that he SHOULD pay back people say get a ledger but what good is that if the bank is going to change the order of transactions are going to with the largest transaction ALREADY puts you in the hole and then they add the little transaction which causes to generate more fee's and he is in -$175 plus the original negative really why make a ledger if the banks are going to pull that stunt your numbers would be different that is why they should ban such practices it does not do the costumer's any good they say that it is a service because it could be a car payment or mortgage. However how is rearranging it a service? we would been negative anyways and to get out of it we would have to pay the bank back anyways! plus the $35 which the last transaction(lets say is mortgage or car payment) yes charge me that one fee that is the only transaction that caused me over yes the person should take responsibility paying that fee for that one transaction but don't make it so they to pay fee's for other transactions that they definitely had the money legitimately when they made those transactions.

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Guest

What really sets me off is I'm looking at my bank statement right now. There obviously is a trigger amount where they start holding up withdrawals to see if they can't get that one that bounces -- because I've got debit transactions going back to last week THAT STILL HAVE NOT CLEARED. My paycheck deposits tomorrow and when that happens all of them instantly clear, finally. But it just P*SSES me off to no end. So now there's a lineup of things that conceivably could bounce, all listed out of order but in order of highest to lowest with the highest amount set to be claimed first putting everything else into bounce territory.

Guest's picture
Steph

Am I the only one that doesn't see this as an issue? Don't make a purchase if you won't have the funds to cover it. Balance your checkbook regularly. It seems pretty simple to me.

Guest's picture
Alice

Yeah, Banks are Criminals just as well like our own government. They are the crroks who should be behind bars and jail cells and prison. What ever happend to our Justice System? Us Americans should stick together and boot out all the bad people from Government offices, no matter if your'e republican or democrat, Right is right, Fair is Fair and Honest is Honest, so no matter what you are, you shoudl always do whats right for other as well as yourself. Thats One of the Problems society has today.. self Pride.

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Guest

I was just charged 5 NSF "hold" fees. The funds were not actually NSF. I had made a charge on my card & added a tip. The bank says they saw 2 fees, the original amount & the amount w/ the tip. The amount w/ the tip cleared, along w/ 4 other charges. But I've been charged w/ 5 NSF "hold" fees because if the original charge had gone through all the others would have been NSF. It's very frustrating. They said it takes 10 days to see that original charge doesn't go through. But they said they won't reverse the other charges. Is this illegal???

Guest's picture
fu_bofa

can anyone put a face on these mysterious crooks? I hate how we blame the
Institution and not a hand full of jerks. Id love to catch one of these perverts in an elevator.
Give them a piece of my foot.

Guest's picture
Guest

The example in this article is wrong. How the H is a bank going to know when you wrtote a check? They don't! What they are doing: If "on a specific day" you have a balance of say, 100.00, and checks or withdrawals for clearing are presented against that 100.00 are greater than the 100.00, they will pay debit card withdrawals first, the largest to the smallest, then checks, largest to the smallest' When the amount of the debits exceeds the 100, a fee is charged for each item not covered by your balance. Now, here's my objection: It is simply the practice of paying the largest items first because it does increase the amount of the fees (instances of overdraft). It does not have anything to do with WHEN the checks or withdrawals were initiated or dated by you. Mail your mortgage check and the post office takes an indeterminate amount of time to deliver it, then the mortgage company lockbox takes a day then their bank sends it to your bank for clearing through fed or local clearinghouse (this can all take as much as a week) and by the time it gets there...woops you already took more than the mortgage payment and anything else presented on the day your mortgage (rent) hits and they pay the mortgage first because it is the biggest. Want it returned? Honestly you could look at it either way. But like you, I'd rather deal with one payee than a bunch of them especially if I know the checks will be returned.

Guest's picture
Guest

The problem is not that banks put bigger purchases first so as to look out for the customers. This is the problem. Example: If I have $1000 in my bank on Thursday and I spend $500 of that on that day. I now have a balance of $500. So the next day Friday I make a purchase for $10 and then another purchase for $40. I now have a balance of $450. On Saturday I make a purchase for $300. Then on Sunday I make purchases for $20, $30, $50, and $25. On Monday I should have a balance of $25. But this is not the case with the BIG BANKS. Now you're going to have an overdraft fee. Not only are they going to put the big purchases first, but they will go back even further than Thursday and grab a $400 purchase you made on the Wednesday before and it will look like this
$500
$400
$300
$50
$40
$30
$25
$20
$10
This creates a problem because you only had a $1000 balance on Thursday. So they make you think they did you a favor but in reality by you being poor enough to let your account drop down, you gave them the green light to commit fraud, which they call overdraft protection. Hint..... They only make money off of the poor with overdraft fee's. With banks like this there is no need for payday loans. I myself understand completely what their doing because they got me the same way for years until I got tired of it. DO YOU WANT TO KNOW THE TRICK LADIES AND GENTLEMEN TO NO OVERDRAFT FEE'S? Let all of your purchase clear. When you see your statement say processing/pending. Don't you spend a dime until it clears. When you keep spending while it says processing/pending this is a recipe for them to defraud you. This is how I now stay away from overdraft fees. They can't get away with it if you let your purchases clear. Stop using your card everyday. If you have minimum funds, use your card once a week for all your needs. If you notice BOA takes almost 5 days to clear your purchases. This makes no sense if it's done with a debit card. But it is the biggest cash cow they've got going next to mortgage fraud.

Guest's picture

Its a shame that the same banks that we have all been with for decades feel the need to bring out charges for simple mistakes. In my opinion banks should't let your account go into overdraft unless it is pre-arranged then none of this would happen.

What with the whole PPI scandal going on at the moment too, it does make you wonder which side the banks are on. Whatever happened to 'the customer is always right'!

Guest's picture
Betty

The banking industry has become nothing but legalized fraud and no one is monitoring it. It used to be prudent to put your money into a savings and watch it grow. Now they charge you several dollars each time you transfer money to checking or withdraw from savings. It now costs more to save you money in the banking system. And, as the article stated, all of the bogus fees. I think America is ready for another rapid rush on the banks to withdrawal money. They threaten that this would ruin the economy. However, THEY have ruined the economy by stealing from the very people who can choose whether or not to spend. We need to pull our money and hold the banks hostage to our demands, which would be to get rid of all the fees except bounced checks - which should be lowered, stop charging fees to use our own money or if our account is lower than $300, and all the other bullshit they are doing. Does anyone remember that when ATMs came out they told us it will save money for the consumer since it enabled the banks to lay off employees and replace them with machines? They counted on the public forgetting that and now we are being told we are paying for the convenience. I am in the process of purchased an extremely heavy safe and I am withdrawing my money from the banks.

Guest's picture
Guest

I have expienced all the bank Practices listed in these messages. Here is how I turned my back to the banks. We needed $2400 for car repairs. Rather than using scum sucking bank credit cards, I sold $2400 worth of stock. Then I set up a repayment schedule, paying myself back over an 18 mo term at 5.99% interest. In a nutshell I became my own bank. Making a loan to myself at a reasonable interest rate. By the way, my bank has no late payment fees and will never raise the interest rate.

Guest's picture
Crystal

I think I've had this happen. But I also think my bank holds onto my health insurance check and puts it through when they see I don't have money to cover it. On months I have enough money in my account it takes ten days for them to put the check through, but when I don't have enough money they put it through as soon as they get it. This causes overdraft fees. They do this consistently, so I know it's not my imagination. Has anyone had this problem?

Guest's picture
Scott Pruitt

I've got one that'll blow all of your socks off & to make matters worse I work in this industry & BTW this unreal situation happened to me about 2 years ago. So I recently opened a brand new Chase checking account all for the purpose of setting up my direct deposit from my new employer. It was a part time job as a credit manager & I didn't want to mix my other bank account with this new part time gig. Anyhow 1st thing I need to clarify is that theres only one way to make account changes such as adding on overdraft protection or in my case I purposely opened my account without the overdraft. Why...because as soon as my account hit $0.00 no pending payment transactions still in limbo could possibly process me into the negative due to NOT having overdraft. Its a form of added protection from all those fees, again once my account hit $0.00 there's no way to go into the negative. This is how I purposely opened up my account & yes those bankers were all huffing and grrring at how I choose to open my account.
Now literally 2 days later I received a letter from Chase saying that "due to my recent account changes and/or updates I made, I now have OD protection up to $700." I repeat it didn't say if I'd like to reconsider OD protection option, it said I now have this due to changes I made to my account. I immediately called Chase & what was odd, (remember I work in this industry and ask for borrowers to verify themselves all the time via their SSN, Subject Address, etc. the normal phone process we're all used to right) well none of that happened at all. What they asked me was to provide them w/my 16 digit debit card# & didn't ask for the expiration date on the card nor the 3 digit code off the back, then proceeded onto security questions that only I could answer based on my credit profile. Like did I used to live at this address in the past yes or no, what's my car loans monthly payment if any and so on. I passed w/flying colors & I asked why aren't you verifying my identity by asking the industry standard questions everyone knows & expects to be asked? Well the lady rudely interupted me with this 5 min long speech she was reading straight from a script advising me of all the benefits of OD protection and blah blah blah do I wish to remain with my OD protection? So I layed into her & said that I opened up my account WITHOUT OD protection purposely and I'm calling because I got the letter that I said had made changes to my account recently (of which I had done no such thing but the only way it could be done is by INTERNAL CROOKED EMPLOYEES who had to have changed by keystroke entry my settings in the mainframe known as AS400.) A quick click on generated the change but they couldnt stop the letter from going out to me. Why would they do this you ask? It gets worse, now I finally have the Chase rep hearing me say that I never initiated or made any such changes to my account & thats why Im calling NOT to cancel my OD protection but the fact I never made or requested those changes ever & I know outside of customer made changes the only other way is what I already explained. Chase rep was clearly dumbfounded and was at a loss for words, then regained herself and assured me that the changes made would be undone and revert back to no OD protection. I asked how can you assure me since clearly this has already happened. Well I waited for my letter stating changes have been reverted back to how it was supposed to be & it had been a couple of days since my call. I deceided that I'll just receive my first direct deposit, withdrawl all of it and close out the account. Here's the nightmare...there's obvioulsy a rouge group of employees pulling off these inside jobs & I'm not a conspiracy, dont hold myself accountable, everyone is out to get me ahhhh mental case. Why do I state this claim...because my directly deposited funds of $4800.00 which was my signing bonus for the part time credit manager job I just started working for should not have been a ACCEPT YOUR XFER OF FUNDS PENDING because I had direct deposit people WTF is XFER OF FUNDS when this is payroll. I received a text notification that funds are waiting for me to accept them. Surprised again because I never set those types of notifications up ever but here it is on my phone & it stated XFER FUNDS PENDING & yes I received this notice at 10pm. I called but many of you know that with CHASE unless its a lost or stolen card after 10pm EST there are no live reps. Yes I purposely got the lost/stolen reps on the phone but they couldn't help me out so I waited until 9am the following morning when the branch opens. Before I went there I indeed checked my account online & the entire amount had already cleared and the full amount was available all in less than 12 hours for an account that was barely 4 days old Huh this makes no F'in sense. So I figuered it must be a blessing I'll pull it and close it. Just before I arrive to that branch I get another annoying text notification saying to please login online for account status notice. I was like WTF is this stupidity now...so I login and all of a sudden the message flashes saying PLEASE CALL this 888# & in big red bold writing it said "YOUR ACCOUNT STATUS HAS BEEN LOCKED/SUSPENDED." I floored it to the branch & the weird stuff continues because those branch employees not all of them could possibly remember me from my one time visit but as I turned into the parking lot, parked in the RESERVED FOR BRANCH MGR K. HALL space I could see through the windows everyone seemed to be skirting, shuffling, running around almost looking like they were trying to find a place to hide. Like when the kids throw a party after they thought the parents were gone all weekend only to be surprised when the parents returned the same night and caught them in the act. That was exactly how they were acting & I walked in keeping myself as reserved as possible. When we got to the part of me showing the rep my text notification that I never set up to begin with stating LOCKED/SUSPENDED he played it smart and walked to the back office with my phone in his hand & after about 20-30 min he emerged talking about some gimmick technical difficulty BS. He said he tried to figuere out WTF but not even his superiors in corporate (if he ever called anyone to begin with) were also confused at all that has transpired because...are you ready here's the F'd up part I arrived at that branch literally as the doors were opening. The rep continued to tell me, (BTW the rep was full of BS, remember how could the rep know so much of this detail I'm about to tell you but couldn't explain some of the simpler things) that somehow in some out of this world manner someone physically walked into another branch some 7mi away, posing as guess who...yep posing as me with ID and everything accessed my account and withdrew all $4800.00 in cash. You'd think hey in this day and age CCTV caught the thief right??? Wrong remember before I got to the branch (meaning Chase wasn't opened yet) I recevied the LOCKED/SUSPENDED notice via text so how in Gods green world could a person posing as me walk into a branch before it opened, took all my money, walked out & convienantly their was no CCTV recorded footage at all for review.
I've worked Global Risk Management & this fiasco was a definate INSIDE JOB bar none. In closing this wasn't the end of it, I obviously filed all the fraud reports you can imagine and then some. That made no matter to Chase & here's how you'll see it being internal F'd up Pieces of Sh...a few days later are you ready...rememeber I had no OD protection so I couldn't go into the negative right. Those MuthaF'ers over turned the already deposited payroll that somehow became a XFER OF FUNDS that CLEARED $4800 FULL AMOUNT AVAILABLE IN LESS THAN 12HRS ON AN ACCOUNT THAT WAS ONLY 4DAYS OLD nullfying the deposit that somehow breaks all sanity and now places me IN THE F'IN NEGATIVE FOR $4800.00 since some shadow entered a branch not yet open, withdrew my funds on an account that was LOCKED/SUSPENDED, walked out with nothing being captured on CCTV AAAAAAAAAAAAAAAAAAHHHHHHHHAAAHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I give you my word and yes thats my real name & I am still dealing with this horrible expereince that just takes years of my life daily not to mention the part time gig, all they had to hear was fraud, LOCKED/SUSPENDED account, now check systems when I was hired to be their Credit Manager & this is taking place to their new employee. Nope no longer bye bye new employee no with no job as the final blow.

Guest's picture
N

Oh yes Chase do this to my account all the time, under that trick i had paid hundred of dollars in the last years. They are dirty...

Guest's picture
Guest

When I argued this point with my bank back in 2011 (after getting hit with 5 overdrafts as opposed to 1), their excuse was that "The largest transactions are usually things like rent and your car payment. We charge those first just to make sure they go through because they're the most important." What I never understood was, all of the transactions *still* went through, so how could the order have mattered, if not to maximize fees?

Guest's picture
max

In the old days a bank person would have to personally handle the overdraft and thus there was a cost to the bank due to the transaction. Today, a computer does all the work, there is no person involved and thus a $35 charge is totally unjustifiable.

Guest's picture
Maura Jenkins

Do you think it makes it any more criminal when you make a cash deposit to cover an overdraft, you receive a receipt that shows you are in the positive, and then when you check your account the next day, another transaction seems to have processed and your online account shows they re-arranged ALL the transactions, and that you were never IN the positive. THAT seems like more than manipulation. How can a bank undo what the system does in your account with a deposit to make your account look worse than it is? And the truth is, prospective lenders look at printouts of your checking account to see your history. To see multiple overdrafts instead of just one causes your borrowing rate to be higher, and in a lot of cases for you to be denied credit. Didn't Woodforest Bank (a Walmart Bank) get in to trouble with someone filing a lawsuit that included thousands of account holders for manipulating fees this way? I remember I was part of that class action suit...

Guest's picture
Guest

I have been blaming me as a financially irresponsible person when it comes to banking. So bad in fact, that i wouldnt be surprised if the banks i was a customer to kept track and could see easily just how inattentive i was to my balance and so they threw in charges extra ones because chances were i wouldnt notice and even if i did they would just reverse it had i figured it out and they had absolutely no major consequeces other than that happening so why wouldnt they?

Guest's picture
Guest

still anyone can learn to balance a checkbook and ehen you know how much exactly is in your account overdrafts should never happen. Maybe case by case basis is always the bes option because i think its easy to tell if theres serious intent to purposely tell whether a person goes way into the negative. However, the banks shouldnt charge overdrafts because they help create them and its basically a HUGE confict of interest for sure.

Guest's picture
Guest

that is not true i am a teller at Wells Fargo and we as employees cannot even manipulate the order if a purchase is made on a sertin day that day will be placed in order the only time it doesn't it is when you deposit a check and the check might take from 1 to over a week depending on the check and the maker or a payment that was made and doesn't post until a later day and if read when you make a payment and it takes days the place will tell you and even so you are responsible on making sure that everything is correct with your account before making payments or purchasing anything therefore any fees on the account is solely the account holders responsibility

Guest's picture
Guest

Sadly, this manipulation happened to me through Partners Federal Credit Union. They waited to post my direct deposit and instead just posted all of my withdrawals first. Everything was completely out of order. As a result, I was hit with eight or nine overdraft fees of $28. When I spoke to a representative, all she did was read my statement verbatim. I explained to her that they had processed my transactions falsely which resulted in my account going negative. She then proceeded to read me my statement again. Very surprised I received such awful treatment from a credit union. I have been a member of one in my home state for years; never had an issue. I move and try to establish an account in a new state, thinking a credit union could be trusted, and I get screwed. So magical!

Guest's picture
Guest

Some banks even have the system try to pull the amount a second time. Which will cause them to charge twice.

It gets more complicated when the payment is between two banks. Now both banks change you the fee not just once but twice. Between the two banks they are charging four $29 dollar fees for just one bad payment.

Guest's picture
Guest

What we're currently dealing with is the transaction stacking described above, but on top of that we're being charged for using our overdraft protection.
Overdraft protection takes the amount by which you've overdrawn your checking account from savings, leaving your checking account at a zero balance. But now, and this just started, our bank is then charging a $12.50 overdraft protection fee to the checking account (which was at a zero balance, remember). So now the checking account is again overdrawn by $12.50, and again overdraft protection kicks in, automatically transfering $12.50 from savings to checking, bringing the balance back to zero. Then another overdraft protection fee of $12.50... On and on and on until either your savings is depleted, or you notice that it's happening and deposit money.
I don't mind the fee; overdrawing is irresponsible and we need to keep better track of our spending. What I do mind is having my zero balance account repeatedly charged for using my overdraft protection, which I wouldn't need to keep using if they would simply take the fee out of savings when they take the owed balance out.
I don't know if this is even legal, and haven't been able to find any information on it at all.

Guest's picture
Guest

This is nothing new however it is deceptive. Most people balance their check books by first to last transaction. However, if the bank rearranges the transaction to produce OD fees. This is no longer a case of living beyond your means.
Case and point. I go into a credit union (turned to bank recently). I knew I had $32.00 available. I deposit $5.00 Friday at 13:34 EST. Brings the balance to $37.71. The only check outstanding was $17.00. However, the teller says I have some pending items and the available balance my be different. I thank her and then notice a hold of $17.00 (the check) I check my balance Saturday and Sunday religiously. I use the debit 3 times over the weekend for 3 ($1.00) charges. This is to the tune $7.00. I go in on Monday deposit $10.00 (this is my fun account no real heavy money going here). The balance shows $18.69. Yes in the black.
Well low an behold here comes the landslide.
I look Monday night and I am $104.00 in the RED. Here's what happened. They reversed the $17.00 (water bill) and bounced that because another charge (my gym) auto billed me $19.99. This gym has never had an auto billing policy and I have been with them for two years (Very deceptive). However for every $1 -$2 transaction on the weekend I was charged $29.00. (I am annoyed to say the least)
I threatened my gym with the deceitful new practice and threatened to quit and they retreated. As for the bank. I mailed them a letter, expressing my dissatisfaction and said, I will bring the account current when they credit back the unnecessary fees. (waiting)
I can accept the practice, but when you knowingly reverse and bounce a check already on hold to produce more fees ~ no that is deceptive. If the $19.99 charge had hit, then it would have produced a single over draft charge and a negative balance, (I would have been unable to use that debit card over the weekend) which I would have brought current. This was deliberate and deceptive to incur more fees plan and simple.
In meantime I am solving my problem (may cost a little more) - I go buy a VISA/MC gift card. I use that to pay Netflix, Gym fees etc since they want to auto-bill. The card costs $5.00 and it beats $90.00 worth of over draft fees. When the card runs out, get another and start the practice all over. I move my money across two Credit Unions to avoid this avalanche of fees.

Guest's picture
Guest

Here is a variation on deceptive practices by banks that I haven't seen before.
I have two different pension funds that are deposited automatically to my account on the 1st of every month. Now I find that, because of the holiday period, despite the fact that the money will be automatically deposited on January 1, the money will not be available until January 4th.
Furthermore, online payments (contingent on the automatic deposit) that are scheduled with the bank for a January 1 payment show "funds are needed" and will be paid late or when the funds become available. Please note that even when cash deposits are made into a checking accounts banks may legally wait 24 hours to make those funds available.
Thus in addition to being late to the creditors, the bank may charge overdraft fees, etc. Furthermore, late payments to creditors are likely to trigger an increase in interest rates being charged me with implications for all other credit card loan being increased as well.

Guest's picture
Ellen

Does anyone know of any Bank that doesn't use these unfair transaction practices?

Guest's picture
Guest

My bank likes to use pending credits to fool people in to thinking they have extra funds.
I transferred $40 from my checking into my savings and the money was available immediately --got spent quick too. the transaction showed up weeks later as a pending credit which added the value to my available balance -- money i had spent, anyone who doesn't pay attention can accidentally spend more money then they actually have .

Guest's picture
Kasoni B. Ullah

I, for the most part am not disatisfied with my bank's services. I am not unlike a lot of people who are struggling to keep their accounts straight.
I do transfer money between my savings and checking account quite a bit. I haven't overdrawn my accounts. My complaint is being told that I'd be better off with a checking account instead of a checking and savings account. I have been told that the bank may very well go ahead and covert my savings to a checking account. At one point I had two checking accounts. One that I could access through atm machines and the other I couldn't. That made absolutely no sense to me. I was told by a bank representative that he had a notation on my account to not under any circumstances let her have a savings account.
What is more upsetting is that someone is determining that poor people should stay poor. If I were a bank in trouble, I could expect that I could or would be bailed out even if I made unwise loans or purchases; but, I am not a bank. I try to keep my purchases covered. I read an article that basically said that banks don't need savers.I don't quite understand then where are they getting money from if not from deposits.
And finally let me say at this point I don't really care if my bank changes my account. I just have too much on my plate to be aggravated over something that seems persuasive in our society now and causing a lot strife.

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Guest

Currently my bank has an even better practice. They group all transactions together and of it bounces your account they charge you a few on every transaction for the day. For example I made ten transactions this weekend. I accidentally forgot about a tip. Monday I expected 30$ fee, and to be about 10 in the whole. Well imagine my surprise when I was 328 in the hole and 300 was fees. Sorry ma'am but our policy is to run it at a lump sum and since we can't pick and choose what we put through we have to charge a fee for all transactions. Really? I'd be happy wort biggest to smallest at this point because it's still be one transaction!!!

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Guest

Since being screwed by BofA 6 years ago, I decided life is way better going "off the grid" in regards to my money. I am a bartender in Las Vegas and anyone who works in hospitality is cash heavy at the end of their shift. The headaches and drama of conformity to bank rules just wasn't worth it anymore. I own my car and home free and clear so I really don't care about credit anymore. I hide my cash the old fashioned way.....but my hiding place is a secret;) everything I buy I pay for either with cash or a loadable Visa debit card I bought from CVS. I am debt free and refuse to give anyone control over my money!

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Tiffany

Yes I have a Horror Story with BB&T , every time I call they give me a different reason and half the time the employees don't know what to say. I like to know how I get charge $2.00 for calling BB&T customer service??

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Guest

forget the bank and close out you accounts ..did you know that the banksters make money aka print out money from thin air. that's right they don't pay for anything but paper and ink and the printing presses, then loan it to our government with large interest attatched to those loans. which is why we are in debt as a nation, the federal reserve isn't even a federal government branch. its independently owned. and charges our government huge interest on the free money they print which our government borrows at our expense. fyi

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Guest

Bank of America

3 days ago I had 3 overdraft charges and 2 bills go on my account that ultimately brought me to -$235.

The first of which was me with drawing 10$ taking my account to 35$... i then received an overdraw fee of 35$.... which put my account at 0$.

I then had 2 bills go out and was subsequently charged another $70.

Today after being paid i went to the bank and pleaded that they remove them. They were at first unwilling until i told them that i was charged a fee before my account was even negative. they looked at it and their tune changed quickly.

I then deposited 500$ in my account and was told i would have the money available no later than midnight ( I have literally no food right now and a child )

Its still not in there and I don't expect to see it until the following day.... i am changing my bank to CapitalOne 360, there are no overdraft fees...

unfortunately i am a full time student and on disability from my military service... im on a pretty fixed income and trying to make the best of my life and the only thing i have to look forward to in life is the consistently of being fucked over and robbed by the rich bankers.

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Wade

Well wouldn't that be called fraud? The money has to be removed from your account as it is spent. Not in whatever way they feel like removing it.

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Guest

Well I got an overdraft charge, actually 2 of them because I deposited a check on a Tue night and used my debit card on Wed and again on Thru. They charged my acct because the available balance was different from the current balance and not knowing there was a charge added to my acct for $36.00 used my debit card again which then actually over drew my account. I'm on disability a very limited income and the check that I had deposited was a $100 check from my mother to help me out that month but I only ended up with '$28.00 after all their charges. I've never been charged like that before. I'm not sure if other banks use this practice or it is my bank specific. But if their using the excuse of the funds not being available yet then why did they pay the debit card purchases? If that's their justification they should of declined my purchases. By paying them that makes that policy not make any sense at all.

This is a new one to me. Is this even legal?

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Guest

Wells Fargo has a crazy practice, you make a small purchase early in the night because you see you have money in your account and you think the bank is sleeping (that if they didn't charge you at that time, it will be the next day), you are wrong, Wells Fargo is charging very late in the night to make you fall in insufficient funds and charge you $35; easy money for them.

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Vicky Robinson

I need some advice, I made an $800.00 cash deposit at the Wells Fargo drive up window. I just went online to check my account an noticed that they only credited my account for $100.00. I immediately called the bank and they said they will credit my account for the difference which is $700.00 but that they may withdraw the money back out if they investigate and see no errors. What are the chances they their cameras didn't record me counting out the money before sending it up in the chute. Has anyone seen this before are they going to take the money from me. I have been banking with them since they were named First Interstate Bank at least 25 years & I have never had this happen to me, I think the teller pocketed my money. There is a big difference between $100 and $800 so that teller knew what he was doing. Without any proof I'm sure I will be forced to repay the money they put into my account.