Ways banks snare your money

[lucille]

Not all banks do these things but many of them have been finding ways to rig their practices in order to increase the chances you will make a mistake. Most of this depends on people not micromanaging their accounts and balances on the fly or on a daily basis.

About a decade ago Norwest/Wells Fargo (they were merging at the time) got in trouble in Wyoming for purposely running all credits before they would run any deposits, even if they came in the same day. Thus increasing the chances of someone incurring an overdraft charge.

I have noticed more and more banks holding deposits for days and even weeks. Most of this was with paper payroll checks. Other banks have increased their ATM fees or limited how many you can do. Another new tactic we have noticed is debits floating around at the bank for days even weeks before they charge against your account. When we first noticed this we thought maybe one or two places we normally do business with were falling behind on sending charges through. But we noticed it was happening more and more and with some that had a track record of sending off charges that same day. Could it be that banks are playing on the fact that so many people just glance at their balance online assuming certain charges have gone through by doing some quick math in their heads? We did for years and were generally right within a few dollars and didn't have overdraft issues. We also found that the lower our balance was the more debits seemed to float in no mans land for days or over a week.
We also noticed that card swipes are now being allowed to overdraft your account on some occasions. No more declines if your low sometimes it goes through but then charges you an overdraft too.

I know were not the only people being busy who operated on the balance glancing method, just about everyone we know or worked with has admitted they don't track their balance on an item by item basis every day.

With so many people using two debit cards on one account and not micromanaging their balances on a daily basis this is just a recipe for disaster and one for profits for a bank.

We have experienced many of the various games with other banks and gradually over the last six months our long time bank has started doing them too. They are no longer processing online bill pays on the fly. Now they do them in batches and we have noticed sometimes they are not processed on the day they were scheduled but days later. They are starting to post debits before credits on the same day (they run this in the morning). We are also having charges that used to post the same day, like an E-check to our electrical utility take over a week to show up. My fitness membership that used to post like clockwork is now showing up eight days later?

We took action to try to get around the games our bank has now joined in on playing with customers. We started a google spreadsheet for our shared check register so we can both manage it on the fly during the day and know our real balance. We diversified out spending. A new account with our credit union for my husband to do all of his travel expenses that get reimbursed. That way even if we have another bank snafu his work travel is immune. We also started using our Paypal account and debit cards again. We are pushing a set amount of mad money to that account. Then that account gets used for that lunch you went out for at the spur of the moment, the small purchase you forgot you needed or the coffee you just can't live without. The reasoning behind that is that you can not "overdraft" your paypal account and purchases debit against your balance within a few minutes.

I just wanted to throw all this out there. I'm sure someone else who isn't totally up on managing their day to day money has gotten caught in these traps as they are getting implemented more and more.

[alex]

Can you tell us which bank this is so we can avoid it? Thanks.

[72Tiger]

Interesting read - makes me even happier that I belong to my credit union.

[lucille]

It was a local bank in SD, First National South Dakota.
It was kind of disturbing to see what had been a reliable community bank start adopting some of the nasty polices you see more at the big national banks.

Our credit union is looking better every day. We have been under using them since we had a bad experience with a couple of really awful people at one branch. But our more current experiences with two other branches of the same credit union so far have been really good. They may end up getting more of our business.

[kav122]

This doesn't exactly have to do with what you're talking about, but it does relate:

We keep only the money that we need to pay our bills in our checking. We deposited my husband's check. Online banking said "pending" as always, until about 3 days later, it said "posted". Then we pay all of our bills for the two week period. Same as always. A week and a half later, my husband gets a phone call from his boss, and his boss says there was a problem with the check, and they will issue a new one. Kind of irritating, but I knew that any fees incurred would be covered by my husband's boss, so not the end of the world. Sure enough, we got the thing in the mail, like two days later, with all the fees that were incurred. Then about a week after that we get another letter, which has the returned check in it, but above my name in the address window it says in big bold letters "YOUR ACCOUNT IS IN OVERDRAFT. NO FUNDS AVAILABLE".

Two problems:

Is that really necessary? Do they need to tell my mail carrier and anyone else that sees my private letter, that we had a problem at the bank? It's not like I can tell my mail carrier, "oh, yeah, that letter from the bank, that wasn't our fault."

And number two. Why did it ever say "posted". If they ran the check through their system, and there was no money in my husband's boss's account, why did it not still say "pending?"

[Ginger]

my number ONE pet peeve -- crummy bank fees, as I can't stand them! Fortuantely my CU doesnt have very many opportunities to catch me on the short end of the stick but ohh how I loathed BOA for this...

[hermione]

We used to use Bank of America but got fed up with their horrid customer service, sneaky telemarketers who sign you up for programs without your authorization (they really did that once with one of my accounts; they spoke to my sister who told them she was not authorized to make decisions for my accounts but they went ahead and signed me up for some crummy "protection" account that I didn't need or want and started charging me for it.), and other schemes to take your money. One of the most annoying practices is charging customers to go to the teller. I'm not comfortable with depositing large checks at the ATM, and we used to have to combine our checks and wait and "save" our tellers visits. It's utterly ridiculous. They're already making money by taking your money and they want to charge you for taking your money too.

We now belong to a credit union, too, and it's much better - we actually get customer service, don't have to pay for our accounts, and get much better interest rates on our savings account - about 6-7 times what we were getting from Bank of America.

[Ronni]

When I was in college, and for about a year after, I belonged to a bank whose fees went up every few months or so. By the time I was out of college, I was paying about $15 a month in regular maintenance fees. What was fishy about this bank, however, is that once I got a full time job that offered direct deposit, my account would overdraw about an hour before the direct deposit went through. EVERY SINGLE PAY. I left that bank, joined the Credit Union, and didn't have another problem with overdrawn funds (unless I was the one who made the mistake). I mean how is it possible for one bank to have me overdrawn every two weeks, on Wednesday at 11pm, but once I changed banks, there were no incidents like that?

I'd had another incident with that bank, in whereas they'd frozen my account and didn't unfreeze it even after I'd put in a $2K deposit. Every check I wrote came back with a "refer to maker" stamp on it. Fortunately, "refer to maker" doesn't incur the wrath as "insufficient funds" does, but it was a pain to reissue checks, re-mail bills, etc. I made the bank pay for the extra checks, any fees I incurred, and the stamps I needed to re-mail all the bills.

I will NEVER bank with that particular bank again.

I'm not sure how to go about joining a credit union again. The credit union I was with just recently became a bank.

About a decade ago Norwest/Wells Fargo (they were merging at the time) got in trouble in Wyoming for purposely running all credits before they would run any deposits, even if they came in the same day. Thus increasing the chances of someone incurring an overdraft charge.

I've heard of this happening many times, and at other institutions. I have a feeling it's going to become standard practice.

[lucille]

Originally Posted by Ronni

I'm not sure how to go about joining a credit union again. The credit union I was with just recently became a bank.

About a decade ago Norwest/Wells Fargo (they were merging at the time) got in trouble in Wyoming for purposely running all credits before they would run any deposits, even if they came in the same day. Thus increasing the chances of someone incurring an overdraft charge.

I've heard of this happening many times, and at other institutions. I have a feeling it's going to become standard practice.

I have a batch of automatic bill pays set up for the 1st day of each month. We also have a check that automatically deposits the first day of each month. Boy was I shocked to see a negative balance when I checked the account first thing in the morning. What they had done was to post the batch of payment but it was set as "pending payments" not the line item payments. They had posted them before any deposits for the same day. I think subtle shades of the unfriendly practices that Wells Fargo and BOA have been doing are going to start showing up at more regional banks. If our current bank gets any worse were gone. They also refuse to admit anything has changed and get very defensive mode if you ask them question in relation to how they have changed their practices. I honestly think they are doing this in order to pull in more money or chase off any customers they consider "not profitable enough". This has been the admitted tactics of some of the bigger banks. Were also seeing it in things like the Egg bank in the UK shutting down credit cards not of the people racking up huge debts but the ones that are paying it off in full each month.

As for where to find a new credit union find out what ones are in your area and start calling around. Some have very broad membership requirements. I qualified at one because my brother was a city employee at the time. Some allow members in for belonging to local churches. The current one we use is because my husband is a veteran, we get membership through the local one tied to the VA.

After we see how things go with this new account with our credit union we may eventually switch everything over if our current bank keeps being so un-customer friendly.

[lucille]

Originally Posted by kav122

This doesn't exactly have to do with what you're talking about, but it does relate:

We keep only the money that we need to pay our bills in our checking. We deposited my husband's check. Online banking said "pending" as always, until about 3 days later, it said "posted". Then we pay all of our bills for the two week period. Same as always. A week and a half later, my husband gets a phone call from his boss, and his boss says there was a problem with the check, and they will issue a new one. Kind of irritating, but I knew that any fees incurred would be covered by my husband's boss, so not the end of the world. Sure enough, we got the thing in the mail, like two days later, with all the fees that were incurred. Then about a week after that we get another letter, which has the returned check in it, but above my name in the address window it says in big bold letters "YOUR ACCOUNT IS IN OVERDRAFT. NO FUNDS AVAILABLE".

Two problems:

Is that really necessary? Do they need to tell my mail carrier and anyone else that sees my private letter, that we had a problem at the bank? It's not like I can tell my mail carrier, "oh, yeah, that letter from the bank, that wasn't our fault."

And number two. Why did it ever say "posted". If they ran the check through their system, and there was no money in my husband's boss's account, why did it not still say "pending?"

Let me guess. Was it TCF Bank?