Raw Deal: Overdraft protection
Have you been hit with overdraft fees? Do you think the fee is reasonable or excessive? Tell us about your experience using overdraft protection on your bank account.
The respondents claiming that you can solve this by just keeping track of your money and living within your means are missing the point. The question is what is an appropriate fee to charge for an overdraft. What if the penalty for jaywalking was death? These same people would argue “well, don’t jaywalk and no one will kill you”.
I know that you could theoretically be charged $35 for being $1 overdrawn. Does this seem fair? In terms of interest on a loan this would be ~ 1.3 million percent APR. I find this to be obscene…
Far from the contrary. THIS IS MORE THAN ELEMENTARY SCHOOL MATH. Some Banks use a system of delay in a deposit or a delay in a transfer. The corrupt unregulated system also uses a larger debit prior to a smaller one sometimes causing a snowball effect of overdrafts instead of one. MY THANKS AND GRATITUDE TO Carole Maloney.A House Financial Services subcommittee is debating legislation that would change the way overdraft fees are assessed by banks. This bill needs to make a reapperance since it was last seen in 2004.
I found the section of “Overdraft outrage: You weigh in” where the banks respond to be very deceptive.
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“We process checks and other debits starting with the largest amounts. That way, important, large bills such as mortgages, rent and car payments will be paid first,” explained Tom Kelly, a spokesman for Chase.
Bank of America takes a similar position. “Often times, a customer’s largest transactions are those most important to their lives – e.g. mortgage or rent, car payments, insurance premiums or tuition,” Diane Wagner, a spokeswoman for BofA, said in an e-mail.
“Our posting order helps to prioritize a customer’s transactions and helps keep them from defaulting on their more important transactions,” Wagner said.
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Note that with overdraft “protection” the amounts will be paid regardless of order. Thus, the only effect of processing largest to smallest is to increase the liklihood of multiple overdraft fees. There is not a shred of customer service here, because the bank quotes seem to purposely confuse bouncing a check with the overdraft loans.
After paying many unintentional overdraft fees I finally found a program that helped prevent them! It’s a product for your cell phone called Mobile Checkbook. I found it on http://www.mobatech.com and it’s been a money saver ever since. Check it out.
The banks are ripping people off. They say this is to protect you, they take out the biggest dollar amount first so that your mortgage, car payments, loans ect. get paid. Come on, they are protecting their interest, most people have these loans thru their banks. The banks want their money first, to hell with you!
It is ridiculous reading what these bankers are saying that it’s all the consumers fault. Let me tell you that banks are stacking the cards against the consumer to milk more overdraft fees out of them. And it’s usually the ones who least could afford it. For example take Bank of America, they don’t display real time postings of transactions on their banking website. I’ve had transactions including transfers from one account to another pending for up to three or four days (I have screen shots with dates to prove it). Hello, this the computer age, the only reason this is done is to scam the consumer out of more of their hard earned money. So during this time that the transactions are mysteriously pending for whatever reason (the money had already cleared in the other accounts where it came from) you get whacked if you overdraw on your account because of the banks criminal shenanigans like this. They list false account balances because they don’t account for any pending transaction that’s already in the pipeline, giving the consumer a false sense that they have enough funds in their accounts available for other purchases. And never mind that they as well as other banks take the largest transactions first giving themselves a much better chance of hitting the consumer with multiple overdraft fees. I feel politicians are only giving lip service to this (hello Reps. Carolyn Maloney, D-N.Y. and Barney Frank, D-Mass) because this has been going on for years now and still nothing is being done about it. I guess the politicians know what side of the bread the butter is on.
It is time for people to take responsibility. I was taught as a child to deduct each check and if I did not have the money then I did not write another check until I made a deposit and it cleared. If you do not have the money do not write a check. Make sure that you have enough in the account to cover each check that you write. This is simply good practice. Also you can tell your bank that you do not want overdraft protection. Of course this means that your check will bounce and your credit will be ruined. The overdraft fee is a lot cheaper.
First off Lynne, don’t get pi$$ed off. Yours was an unique circumstance from what is sounds like. Personally, I think Direct TV owes you the money. However, I work in banking and I can tell you that 95% of the people that are getting these fees have no one to blame but themselves. It usually happens when they forget about checks they’ve written and go out and use their cards. All of a sudden the check tries to clear along with the purchases and fees get assessed. Also, Anna, in TX, here’s actual reality for you. NOT ALL ITEMS GET PAID! Banks have a limit for each account of what they are willing to pay on behalf of the customer. How long you’ve had the account, how many times you’ve overdrawn before, etc all factor in. The bank isn’t going to pay and endless amount of checks and purchases for everyone. Also, the bank I work for has a limit on the number of fees per day it charges which means you get a free pass if the bank pays items above that limit. Don’t mistake that fees are a revenue generator for banks, but they aren’t going around looking to charge you. Believe it or not they realize that it makes customer’s unhappy with them. Just remember that in the end the bank isn’t out there swiping your card for you or writing your checks out just so they can charge you fees. Please remember that next time you come into a bank branch and want to scream at an associate about your “unjust” fees!!
I love hearing people complain about something when honestly, it is your fault. Check you account on line every day, keep a record of what you spend. simple as that. if you stayed on top of your accounts and spent only what you had – guess what… NO FEES
another example of people blaming someone else for their stupidity.
only a matter of time until some idiot trys to sue the banks
I am glad to see this issue finally being thoroughly debated. I hope I
continue to see stories like this in your publications. Thank you for
addressing this issue.
I would like to respond to one of the typical bank excuses you mentioned
in your article:
”
“Our posting order helps to prioritize a customer’s transactions and
helps keep them from defaulting on their more important transactions,”
Wagner said.
”
…and several more like it.
Reality Check:
ALL OF THE TRANSACTIONS GET PAID! In an overdraft situation, it is not
that the larger expenditures get paid and the smaller ones are rejected.
They are ALL paid. If they reversed the order of payment, they would
still ALL get paid, but the larger transactions would be the only ones
assessing fees!
I have found myself visiting the unsavory payday loan institutions in
order to avoid being loansharked by my bank!
Most of you people really pi** me off. You act like getting an overdraft fee is always our fault. Granted, there are times when we think a check or a credit won’t hit the back before our direct deposit does, and, thus, our mistake…….thinking. But, what about things like this: I $132 in my account. I wrote 3 separate checks, all 3 under $30. I knew how much money was in my account, I used “basic math”, I had a second grade education, all that! I moved, and didn’t send my Direct TV satellite dishes back in enough time (moving out, moving in, trying to work in between), and instead of calling me and reminding me to send them it, Direct TV decided to TAKE the money from my account instead. Making that $175 bounce, the bank charged me $30, then the 3 checks came in, and I got charged $90 on top of the less than $90 in checks. Direct TV, of course, says it is not their fault and they won’t reimbure the $120. The bank says it’s their policy, and to get Direct TV to do. Mind you, this was back in June!! I am today, STILL waiting for my $175 from Direct TV after returning them the next day. And I am out $385. You all talk as if everyone upset here is just blantenly spending money and complaining about the banks policies. I realize that banking is a business for profit, but, to what extent???? To the point, that the poorer get poorer. If I had my way, since most of my jobs require direct deposit, I would never deal with a bank again. Capital City Bank is the biggest rip off of people that I have ever had the misfortune to deal with and I wish I could go take money away from them the way they do me and see how they like it!!!!!
I work for a Credit Union in Topeka, KS and we do offer Overdraft Privilege, but it doesn’t work with your debit card. If you do not have the available balance in your checking account to cover a purchase we decline that transaction regardless of any ODP you might have.
We also clear our items the opposite of the banks. We clear from the SMALLEST to the largest.
Our ODP or NSF fee is only $15.00 (lots of banks charge more than TWICE that!) and we waive fees for members all the time with good history with us.
Also we allow have an Overdraft Protection option that allows you to have money transferred from a credit card or other account you have at the credit union to cover an item and there is no fee for this service. Why should we charge you to use your own money?
“People act like banking is rocket science. Start with a balance, add deposits, subtract withdraws, don’t go below $0. 2nd grade math.”
In second grade math you know what order the numbers are added and subtracted. Read the article again. The $400 was transferred before the purchases were made. The $400 was deducted from the husbands account instantly However, the $400 was not credited instantly It was credited after the purchases. Why?
Keeping a register in this case isn’t going to help. According to their calculations they would be fine. But because of the order that the bank cleared the transactions, they are charged fees.
There is an amazing process out there that will keep you from ever paying an overdraft fee. You will need pencil and paper (ack the technology) and basic math skills. Simply subtract the amount of every bill and purchase from you paycheck, when you get to zero stop spending. I promise this will really work, but you have to do it for yourself, your bank can’t do it for you!
Oh one more thought for you Mike in TN. The banks are partly responsible for the mortgage mess now, but what about the people who actually signed on the dotted line? Where was their common sense thinking that they could afford a $500,000 house when they were only making $45,000 a year? Shame on you for practicing medicine with your narrow mind!! By your logic, if a patient dies as a result of a prescription you issued to them, then you should be held responsible even if the patient was reckless and took more then they were suppose to. So sad you haven’t learned about consequences of one’s actions yet.
My small but thriving business has suffered nearly 2 grand loss in fees since Jan. I never wrote checks on money I did’nt have. The bank was holding my Merchant monies an extra day as well as my pending items and slamming my account. When I asked at the bank to show me what I was doing wrong to better my balancing they blamed my merchant provider. I see the bank mgr. tomorrow with my documents!
Sorry to break it to you Mike in TN, but no one is defending the banks. We’re simply defending the people who can manage their money. Second, and this is definetly up for debate, but the processing order works fine. I’m sure banks don’t have a money tree growing outside their corporate offices that can pay everyone’s bills and purchases when they over spend their accounts. I can’t speak for everyone, but I would rather my mortgage be paid before my sandwich or cup of coffee. Besides if my mortgage was late because the bank didn’t pay it, then I would be hit with a 5% late penalty by the mortgae company. Finally, here’s al little tip for anyone reading this. When you use your Debit Card’s Visa/MC feature it will ALWAYS be paid no matter what is in your account. That’s because the payments are processed days after you make the purchase and it is considered “pay on demand” which means that banks are legally obligated to pay it regardles of what’s in your account. If your using these cards try to stick to using your PIN number whenever you can. You have a better chance of the card being declined if you don’t have enough money.
People act like banking is rocket science. Start with a balance, add deposits, subtract withdraws, don’t go below $0. 2nd grade math.
I love hearing people play the blame game. No one forces these credit products on them; people sign for them. People need to learn to live within their means. Living beyond their means is a life of debt.
I closed my checking account with US Bank due to excessive fees. One month later, I received a bill for 400+ dollars for overdraft fees and daily negative balance fees. US Bank reopened my account to allow a charge for an automatic withdraw, then overdrew the account for a month, including a daily negative balance fee. I have been fighting with them about this clearly unfair practice, and since then, US Bank has turned me into a collection agency.
have any of you all ever thought of keeping a check register and maybe you wouldnt have to worry about nsf fees. Just a thought. Or maybe the whole world is just out to get you
Anyone defending the banks for this should be deported. This is another example of the lack of regulation over corportate America. Since there are no laws to prohibit banks from maximizing their fees, they do it shamelessly. In other countries this problem was managed years ago. There should be laws to avoid abuse in this manner. I am a physician and am not short on cash, but when I made a banking error it was a big one. I paid through the nose, and it didn’t matter that I was a private banking customer or that i had been a good customer. The bank pointed out there policy manual that showed they could pay the largest item and then overdraft the other 20. Since the brilliant decisions made by banks have gotten us in the mortgage crisis we are in, I suggest taking their power down a few notches, and also to the person who has been in banking 20 years…how sad for you.
I’ve been bitten twice by the overdraft “service” fee by Webster Bank in Connecticut. First time was for close to $700; the second time about a year later for more than $750 ($35 a pop).
My teenage kids often use our debit card for incidental purchase at local convenience stores (less than $10), so you can image my dismay when Webster decided to charge this “service fee” when I became overdrawn.
Both times, I protested to the bank. Both times I was denied a refund, although they did waive $200 the second time because I had just deposited a large check into my account.
I’ve since added line-of-credit overdraft protection to my account to guard against these ridiculous fees. I’m certain, however, they’re finding some way to whack me for that “service” too.
ARRGHHH!
When I talked to the Bank of America representative she told us that we could not use the online banking as an accurate way of tracking our transactions. However, when we signed up for the account the online banking feature was touted as a way that my husband and I could keep track of each others purchases. Now, we are told that pending transactions will “drop off” after 24 hours so we cannot see each other’s transactions.
It’s funny how we had no problem with tracking our account until now. And once we had a problem it was our fault for using the service they told us to use.
It’s interesting that the bank has a system where the pending transactions don’t drop off after 24 hours. I wonder why that same feature is no longer available to their customers? I wonder…
I have been in banking over 20 years. I can sympathize with the people who have made a math mistake in calculating their account balance. I have done it myself. The unfortunate thing here is the number of individuals who have abused the system by overdrawing their accounts. Banks have taken substantial losses on these accounts and that is the reason for the overdraft charges. Some banks may be overcharging and some undercharging. I have found it amusing when a new customer comes into the bank and asks about our overdraft charges. I would bet if we opened that account, it would be closed within 6 months due to abusing overdrafts. I also have a problem with so called “financial advisors” when asked about this matter. When they rank what needs to be done, I have seen “balancing your account” as not the number one responsibility of the consumer. It has been ranked done in the 5 to 7 area.
I experience identity theft earlier this year so I keep my balance low. The less the thieves have to access the better. But when a bank pays all the transactions from largest to smallest causing more overdraft fees than necessary…something is wrong with that picture! In my case, the funds were available to pay the two smaller of the three transactions. But because of the ORDER OF POSTING ( largest to smallest amount), I endured triple the amount of OD charges that I should have! That is unethical practice on the bank’s part! Paying $35 for a mistake – fine – but not $105 when two tranactions could have cleared the funds in the account without “penalty”. This is a loophole that needs some tightening of the reigns.
“How hard is it to track the balance in your checking account? How hard is it to learn when your direct deposits go from Pending to Cleared? If ever you’re not sure – look it up online or call the bank!”
It’s not always this easy because of the way banks process transactions, which seems to me to be in a way more advantageous to the bank than to the customer.
I also find it disturbing that at some banks you can’t cancel a service (overdraft protection) that you never wanted but are charged for if you use it at no choice.
“We were told that $100 of the check would be credited that day “as a courtesy” and the rest the next day”
It’s actually a federal law that says they have make the first $100 of a check available right away and the rest can wait until it clears.
I read alot of stories here from BofA customers, and I am one, have been one for almost 20 years, and while I have had several nightmare NSF/OD fee situations, especially since my husband died and money got really tight, they did come through one time…
In June, my mom and I took my son on a road trip from CA to WI and back. We were going to be gone three weeks so I set up all but one of my bills through e-billing so I wouldn’t miss them, under the assumption that I could get to a computer every couple days or so… and this would have worked great if I had a laptop or Blackberry because everywhere I saw signs for “Free WiFi” but hardly any for internet access that provides a computer and I had neither a laptop or a Blackberry.
So what happened was that I left on the trip with a couple hundred in cash on me and the rest in my account, assuming I wouldn’t need to use the cash but I had it just in case.
Unfortunately, a week into the trip, after we had reached WI, I checked my balance online and decided I really did need to put it in there but there were no branches within like three states so I called the Customer Service number and asked for an ATM or something so I could deposit a check (after giving my mom the cash and she giving me a check) and was told there was one in the mall where I was staying.
Excited that I would avoid the horror of NSFs, I ran to the ATM….. only to find it out it didn’t accept deposits and my account was down to the last $35 or so and I was still over a week from getting home.
Trying to get access to a computer and internet, and even cell phone service, on the way home proved to be nearly impossible but I was already overdrawn by the time we headed home. Finally, I lucked out and the hotel in South Dakota had a computer for guests… well, by then I was overdrawn because I had to pay for a hotel a week before but the transaction had just cleared.
I really, really wanted to avoid a possible NSF nightmare so while my mom was driving through Wyoming, I was on the phone to the bank, explaining that I had been in WI, where there were no branches and the other person I called gave me an ATM that didn’t accept deposits, and even if I contacted my local branch and sent them the money to deposit it for me, I would get home before it got there.
Luckily, I only had one fee (I definitely didn’t use my card after I left WI and, fortunately, no automatic payments came in) and she happily refunded it, probably because my monthly automatic deposit had gone through so I was no longer overdrawn.
One tip… I only get paid once a month and I was tired of having my bills due all over the place so I called them all and asked if I could change my due date (I get paid at the same time each month) to where I knew I would be getting paid and I got all but two changed (couldn’t do electricity because it’s based on when they read the meters). It’s been several months since I did this and it has been a lifesaver!!!!!
Wells Fargo is great about all of these tatics plus they will clear a purchase and charge you, also return the check or debit and charge you again. I thought as long as the funds were in the bank even though the bank does not post them unitl they are ready to, there would be no OD? When do we get to decide what check goes first(in date order) We all have a responsibility to manage our accounts however it helps to not have banks working against you. The bad part about all of this is there are no other options. You can’t get hotel,rental car, etc without bank cards or credit cards,you have to pay more for items when you do not have direct debit from your accounts, you really pay just to have a bank account these days
It makes me sick seeing all these excuses and complaints about why the “banks are wrong”. It’s as simple as this – if you don’t want to get charged OD fees, then don’t spend money that’s not yours in the first place!
How hard is it to track the balance in your checking account? How hard is it to learn when your direct deposits go from Pending to Cleared? If ever you’re not sure – look it up online or call the bank!
And if you can’t handle doing that, then just close your account and spend straight cash. Do you think Wells Fargo, WaMu, BofA, etc. will miss an account that hovers just above $0.00 in the first place? (I doubt it)
My worst experience with “overdraft protection” was getting charged for an overdraft that never happened. We had made some charges, then a day later deposited a check, then made a charge on the same day as the deposit. We were told that $100 of the check would be credited that day “as a courtesy” and the rest the next day. After checking my balance, I saw that we had the funds for me to make my purchase. When we got our next statement, we had an overdraft fee. I got online and looked at our running balance and saw that we had never gone negative (not even close). I questioned the bank and was told that our “available balance” had gone negative, even though several of the pending transactions had not yet cleared by the time the funds for the check were available. In other words, we deposited the check on a Tuesday ($100 available), on Wednesday the rest of the check was available, on Friday the pending charge actually cleared.
What steams me about this is that some companies will submit a charge (accidentally or as a preapproval), but that charge will roll off after a couple of days. This does not affect your running balance at all because the transaction is never completed. But it does reflect on your “available balance”, which will subject the account holder to fees for overdrafts that never occurred.
I have been frustrated for years about the “overdraft protection” given me by my bank. I am glad that fred in brooklyn has never bounced a check, but between ATM cards, debit cards, automatic payments, and other ways to access one’s account, sometimes mistakes are made, especially with a joint account. And in my experience, this always seems to happen at a time when I can least tolerate it.
“Our posting order helps to prioritize a customer’s transactions and helps keep them from defaulting on their more important transactions,” Wagner said.
How are we defaulting on something when the bank is paying it for us?
I had only one OD charge since I have been old enough to maintain a checkbook until this year. I also worked in the banking industry for seven years where we helped out customers in providing reimbursements for one-time errors.
I my situation, I realized that a company I visit weekly had not processed my transactions for two weeks. I brought the situation to the company’s attention. Well, the next day the transactions from the previous two weeks and the current week’s tranaction were posted to my account…resulting in OD charges…three of them at $35 each! (I later found out that the company had realized the error the day before I brought it to their attention.)
I spoke with BOA representatives at two different banking centers in Dallas trying to get two of the OD charges reimbursed. I was willing to pay one OD charge because it was my mistake of not making a proper transfer. The bank wouldn’t budge! Their posting from largest to smallest transaction results in HIGHWAY ROBBERY if you make a mistake!!!
In turn, I also spoke to a representative of the company who sent in the three transactions at once. They made no effort to refund fees! So much for being honest about outstanding transactions!
And I thought gas prices were a main concern…
I have never seen so many excuses for not paying simple attention to what you are spending.
I have been banking since I was 16 and had my first job, now 60+ and I have never bounced a check! When I was young and VERY broke, I went to the Post Office and got money orders, when I did not have enough money to even consider opening an account.
These folks are lucky, in many states writing a bad check can easily get you arrested. While, if you did it by accident, you will not be convicted, if the bank did not pay these checks, merchants could have you thrown in jail.
I understand the suffering of someone who writes a bad check for $20 and gets charged $35, but really, if you are running that close to the bone, you need to go to the bank and get cash, and just spend it until it is gone.
There is no such thing as bad cash.
What you forget though, Bill, is that you probably aren’t aware of what you have outstanding. Maybe you are but for most people that is difficult to figure out – what checks have hit and which ones haven’t, etc. To have the grasp on it that you propose would mean people would be spending hours every day reconciling.
There’s nothing wrong with the expectation that if you don’t have sufficient funds in your account that a purchase be declined – much like a credit card – at the point of sale.
Additionally, while I understand the Banks’ explanation on re-arranging the order of processing checks and debits, it’s not for them to try and figure out. A $20 co-pay for your son or daughter might mean a lot more to you than your $50 internet bill.
Re-arranging the order of processing checks and debit card purchases are simply a way for banks to make billions off of insufficient funds fees.
No offense intended – those are just my opinions for what they’re worth. 
I had a recent experience of a similar nature. Basically, due to mistaken online purchase we thought we were close to our zero mark, but
in reality we had two small fast food purchases that sent us over. This
was in a second account that I have for extra stuff. In the end, we got
charged about $130 for a being $5 below my balance.
I have been a customer with my bank for quite a while and decided that
calling them up may in fact help me. I proceeded to talk to the
customer service rep nicely and she knocked down my overdraft fees to
only $30, which I said is fair as it was my mistake in the first place.
I think the lesson first is that sometimes if you are nice to the person
trying to help you first you can get something done that is fair for
all. Also, the fact that I didn’t have a history of doing this probably played in my favor.
The key thing that is repeated with all these comments is that you the customer are waiting for the bank to decline your transactions before you look at your account. With all the access banks give customers today (online, telephone, alerts, etc) it is mind blowing that many people still don’t know what’s in their account. I have automatic alerts that are sent to my e-mail when my account goes below $100. I could even have it sent to my phone as a text message if I prefer. It doesn’t matter how the bank processes my transactions because I always know what’s in my account and I don’t go over. It is a shame that our society has fallen this far when it comes to taking responsibility for our actions. I’m sure some outrageous measure will be taken to protect the ignorant people who constatly over spend their accounts at the expense of the responsible ones.
What about when you have overdraft protection which draws on your credit card? I’ve found that they treat that transaction as a cash withdrawal and charge you a monster daily rate not to mention the small fee associated. Here’s what really burns me. Now you have a normal activity balance of $5,000 at 8% and an overdraft balance of $400 at 20%. When you make your payment, its split according to the balance. You don’t pay off the 20% first. They pull money from you anyway they can.
the responses from the banks is the biggest joke of all:
“We process checks and other debits starting with the largest amounts. That way, important, large bills such as mortgages, rent and car payments will be paid first,” explained Tom Kelly, a spokesman for Chase.
Bank of America takes a similar position. “Often times, a customer’s largest transactions are those most important to their lives – e.g. mortgage or rent, car payments, insurance premiums or tuition,” Diane Wagner, a spokeswoman for BofA, said in an e-mail.
“Our posting order helps to prioritize a customer’s transactions and helps keep them from defaulting on their more important transactions,” Wagner said.
if they’re providing overdraft “protection” whay not post the checks as they come in? they’re clearly forcing their fees on their customers. why didn’t “raw deal” push the spokespeople on that?
“We process checks and other debits starting with the largest amounts. That way, important, large bills such as mortgages, rent and car payments will be paid first,” explained Tom Kelly, a spokesman for Chase.
If they are paying overdrafts anyway – they will pay the important ones too. Or do they send the high dollar ones back. This sounds like double talk. It’s just a way to get more fees – when the smaller items would clear. The banks made the current mortgage mess – and as we have seen, they like to screw the customer. They are screwing the customer here too. The folks with the money have the power to do what ever they want to do. Think I as an individual could do anything about their activities when congress will not. What a laugh.
Key bank has the worst in a fee structure. they will hammer you for a fee just for comming close to your limit or overdrafting your account. They may wave a fee at first but a small number is atached to your account and every time u overdraft it goes up and so do the fees to the max limit of 35, i hade made 12 purches in just 1 week and incured over 1000 dollars in fees because i use my master card instead of cash and paid my morage the same week wow….if you have key bank lose them and go to hsbc i did and i love it
There is a consumer fraud angle that is being overlooked here. If you have $100 in your account and you write four checks for $30, $30, $30 and $300 and they process the $300 first and bounce it, you still have $100 in your account and the other three checks should still clear. Or else the bounced check fee of $35 is taken out, $65 remains, and two of those remaining three checks should clear.
Refusing to honor all checks even though money is available to honor some of them is theft, plain and simple.
Why are there no calls for criminal prosecution?
I have left employment with a large regional bank to work at a credit union. While they do provide an overdraft privelige like the other institutions, they do not reorder purchases and you can opt out easily. There is just a different mentality at a credit union since its non profit and ran by its membership
I have actual overdraft protection with my bank. Essentially a line of credit for about 3600 dollars that is tapped if I ever overspend my account. I pay $25 per year for this and have never used it but I am glad it’s there after reading about all of these nightmares.
My son, a student in high school was enticed by Commerce Bank in Kansas City to switch from a student savings account to a “More than Free Student Checking” account with a debit card. During our summer vacation, my son made an debit purchase which caused him to go over the limit. Even though we covered the overdraft, deposited additional funds in the account and were assured no other transactions had occured, he received additional overdraft charges over the next several days amounting to over $400 for about $25 in purchases.
This is an outrage, especially given the way that this bank (COMMERCE BANK) targets grade school and college students, enticing them with free money to open a new account, or gifts for switching from a sudent savings account to a student checking account. Even after we responded to their letters, the bank never answered us. Rather, they turned the account over to a collections agency. Something has to be done about this type of behavior.
Not only is it overdrafts, it is the way banks work that is more than unfortunate. I have seen my college student son do many of the same things that have been captured in many of the previous comments and have just had to let him learn that you have to watch what you are doing every moment with the bank because if you don’t you end up with hamburger meals at fancy steak restaurant prices.
You will also notice that BOA makes a very regular appearance amount the disgruntled here. I am also one of them.
I was using my BOA card as my monthly expenses card…charge everything and then make one payment monthly. I had just retired so was making the transition to that change in life. I paid my bill electronically as usual and the next day, to my horror, they had take that payment out twice.
I called them and asked them to reverse the second charge which they refused. I argued that they are a huge bank and make money transfers in the billions of dollars every moment probably and to return me my $2500 by wire transfer should not cause too much trouble. They said they could not do that but they were glad to tell me that the “check was in the mail”….hehe.
Well, it did come, but the next month, they did the same thing so guess what…I cut up all my BOA cards and anything that even remotely looks like BOA I throw away. It is really terrible to just have this feeling that all that bank is waiting to do is for you to make a mistake so that they can charge you in some way
My direct deposit hit on Friday from my employer. I used my BOA debit card over the weekend, only to be hit with four hundred dollars worth of overdraft fees. Every transaction I made was hit with an overdraft fee of 35.00 because my money was “pending”. I pleaded with BOA – in tears … I can’t afford to pay all these fees… they simply brushed me off. I work hard for the little money I make and I can’t afford to pay 35.00 dollars for 1.92 I spent. It’s crazy and absolutely ridiculous that our government allows this to happen daily. Every penny I spent cleared my bank – I had the money in the bank … but I wasn’t aware that I wasn’t allowed to use my card until monday
I have just found myself in a terrible situation due to the wonderful privilege that is Bank of America’s overdraft protection. For the record I do not want the $25 McMuffin. Decline my card. Please! I have other accounts. I can pull out another card. No big deal.
I am a working mother/college student. Money has been very tight this month because my financial aid was delayed and we had expenses from both my school and my daughters school. I have been keeping a very tight eye on our money but unfortunately I slipped up. This last week I have been preparing to apply for an internship so I was distracted from watching the bank account for a few days. I barely had time for sleep let alone bank registers.
I needed some supplies for my portfolio, so I checked my balance and I was woefully short. I asked my family for some help until the financial aid arrived. They were gracious enough to loan me $200 and I put it in the bank. Sometime between when I checked my balance and when I deposited the check a check for $110 cleared. My husband had written it a month ago and neglected to tell me. And adding to the problem I missed the cut off time for deposits (barely) and it would take two days for the check to clear.
So I bought some supplies. It was mostly small transactions at several different stores. Due to the unknown outstanding check and the pending deposit I over drafted on three purchases the first day. They were all under $20. The grand total was $13.88 over. Total on the fees: $105.
The next day I was still unaware that there was a problem and I bought some more supplies. Six purchases, most also under $20. Daily total in fees: $210. running total: $315.
Next day was payday. Yay! Unfortunately there were three more fees applied to our account. My husbands paycheck was eaten completely by the deficit. Daily fee total: $105. Running total $420.
Now still blissfully unaware of all the fees I ran some errands. I was still going off the the figures I had worked out on my computer and by it I was fine. Eight more transactions. All but one under $15. The fees for these transactions have not hit yet. If they do it will be a daily fee total of $280. Running total $700.
And at this point I logged into my account and nearly suffered a coronary. I have never done anything like this before. I have over drafted a few transactions over the years but nothing compared to this. I considered those mistakes to be a “stupid tax” and moved on. But this? $700? All total I only “borrowed” $231 (not including the fees) from them. And for this I’m going to be charged $700? I won’t be able to buy food. I won’t be able to pay rent.
So I decided to swallow my pride and talk to the bank. We talked to a lady and tried to explain the situation. She was completely uninterested in hearing what I had to say and instead insisted that she take a look at our checkbook register. I explained we didn’t keep a checkbook register, we kept track of our finances on our computer. With that she declared that THAT’S why we over drafted. We needed a pen a paper register. Never mind that it’s a joint account and we don’t see each other often during the work week. Pen and paper is the ONLY way to do it. I think she knew that hardly anyone keeps checkbook registers anymore so this was a good “gotcha” tactic. Ironically, later on she admitted that she did not keep a pen and paper register.
I never tried to to say I was blameless. I slipped up. My problem is twofold:
1. I never wanted this service. I would have been happy to have had my purchase declined. I would have then known that the deposit had not cleared and just waited.
2. The fees incurred are way out of proportion to the actual infraction. $700 on a $213 “loan” is the equivalent to a 329% interest rate. That’s outrageous.
In the end the bank agreed to waive half the fees. Of course they also said they could not guarantee the the waiver would be honored. So we will have to wait and see if we can buy groceries this week.
Great topic! Love the question. Admittedly I used to be terrible with balancing my check book and was hit with over draft fees like nobody’s business. I have since been better at balancing my check book but was still getting the fees and became incredibly frustrated. The fee for my bank went from $20 a couple years ago to $23 and from what I hear, this is on the lower end — unless you get them in multiples! I started to use the on line banking and could check my account on line.
I was using – as reference – the dollar amounts in the order of my check registry, but that’s not how my bank does it. They process the highest dollar amount first, which, makes sense as a bank. Get the large amounts out of the way because the increased smaller amounts that go below zero, the more fees to tack on.
Now, I understand the whole overdraft concept: that overdraft is a “privilege,” there would be more fees if there was no overdraft allowance, no embarrassment, etc. Overall, it has saved me money in that if I did not have enough in my account — or I thought I did — I don’t get the added fee from the other bank or person I wrote the check to.
But at the same point in time, if I don’t have the money, don’t give it to me. I write a check because I don’t want to use my credit card. I push the Debit button because I don’t want a credit card. I don’t want to owe money, just use the cash I have or do without. Why charge someone a fee because they don’t have enough money. How does that make sense?
Someone before me wrote about being at McDonald’s and having your card denied for $2 – is that a better situation? For me, yes. I’d rather not eat a $25 McMuffin. It’s not that I’m trying to spend money I don’t have – it’s that I balance my checkbook in the order of my purchases and the bank process the transactions in the order that is most advantageous to them.
Overall, I’m responsible with my money and don’t spend it on crap. I’m not looking for a handout or someone to loan me money for my $2 McMuffin — I know how to scramble. My issue is the tricky way the banks go about giving this “service.”
In closing, I have been hit with fees. I think there is some sort of fair reasoning, but do not appreciate the craftiness in processing the drafts.
YES! I have been complaining about this for about a year. My bank is M&T bank. My husband and I got hit with overdraft fees for debit card POS purchases. We called and visited the bank and they removed the fees. Neverthless, I am still so angry. My bank takes about 4 days to deposit an in-state check. They also process electronic transactions up 4 days after the transaction is made. This is a HUGE problem because I do most of my banking online. I also don’t care if I get Declined for a 5 dollar POS purchase if I will save $35. I don’t have that much pride!!! The worst thing is that I contacted them and told them to TURN off the overdraft “protection” and they told me they could not. I am getting angry just thinking about this. I do NOT want a loan and I am so angry that the bank decided to give me a loan with 500% interest WITHOUT MY PERMISSION. I agree with all of the other angry users on this thread. I am also a programmer and I know that M&T bank’s problems are their fault. Why can’t they process transactions real-time in this day and age? Anyway, I found a new checkign account at Fidelity that charges $10 for overdraft fees. Pls post any suggestions for checking accounts that DO NOT offer this automatic overdraft protection. As I mentioned, CALL THE BANK if they do this to you and insist they remove the charges.
Something I have noticed here lately, my bank suddenly is taking 3 – 5 days for a debit card purchase to clear. It used to clear immediately, that is why I chose this bank. I do not keep a checkbook log any more since I never write a check. The balance in the online banking was always up to date, but in the last three months that has changed.
Better watch how you bank is clearing your purchases, or go cash. Maybe I will have to start keeping a log again or just stop using banks. I really wish that was an option! They are sucking us all dry in everything we do.
Both my daughter and I share the same bank…. she has her account, I, mine. I regularly transfer money from my account to hers and she has on many occasions withdrawn the money minutes after the transfer. Not once has she been subjected to an overdraft fee. Oh, by the way, our accounts are with Wells Fargo. Am I missing something here?
paul
I have racked up my share of overdraft fees, but the part that really bugs me is the opportunistica nature of the banks in calculating overdrafts. They process daily transactions in order from largest to smallest, maximizing the impact of small overrafts. If I over draft by $20 during a day, they are sure to process the $1.29, $4.52, and $6.10 tranactions last; that way they get to charge three overdrafts. If they processed the other way around, there would only be one overdraft on the $92.80 transaction. At the very least, they should process the transactions in the order they are presented. By processing in the way they do, they are simply maximizing the amount they swindle from me.
How about when you make purchases that you don’t have money in your account for, the Bank just returns them or denies the transaction. So you’re at McDonalds getting your $2 egg mcmuffin and your card gets denied. Would that be a better situation? I’m guessing MOST people would choose to avoid an embarrassing situation like that.
Or how about you DON’T SPEND MONEY YOU DON’T HAVE! Novel concept I know…..those banks are so evil!!!
I bank with 5/3 and they automatically sign up all of their customers for the overdraft – in my case, even for a Savings account. I was travelling oversees and had to take out money from an ATM on several occasions. I could not see what the “International ATM withdrawl fees” were at the time, but thought it would be OK because if I didn’t have the money it would simply tell me “insufficient funds” and not allow the transacation.
The worst part was, after finding out about this “helpful service,” as they framed it, I did ask to opt-out. They informed me that their system automatically re-enrolled all of their customers on a monthly basis, so I would need to stop in once a month to un-enroll.
This is yet another wolf in sheep’s clothing “service” the banks are offering to nickel and dime customers. I am now a member of a Credit Union and have found them to be much more customer oriented – not looking to squeeze every possible dime out of their customers.
I hope Congress does take action!
I worked for Wells Fargo. I have been assessed overdraft fees on occassion and they refused to waive the fees. However, when I was working for them if you were a “wealthy” customer we were told to reverse them without question because we didn’t want to offend them. So the ones that can afford it get the break. Just another example of the rich getting richer and the middle class paying for it.
“The majority of overdrafts are people who repeatedly write checks on uncollected funds knowing full well what they are doing is wrong and ILLEGAL”
You sound like the banking industry lobby. Saying that it is only people trying to cheat that get hit.
All I want…and I left a comment on the government site regarding it. Is for the ability to decline “courtesy overdraft” and have my transaction declined if their aren’t sufficient funds and not be charged for the privilege of that notice. Your banking lobby response will be “we don’t want people to be embarassed at the checkout line”. Well excuse me… I’ll take the embarassment of having to pull out another card or just walk out rather than have the courtesy of having $ 35 dollars additional pulled out of my wallet that I obviously didn’t have anyway.
As for the people who say you should keep a register. This is the year 2008 folks… they call them dang fancy things with all the lights computers. They not only maintain the register for you but if programmed correctly they understand the concept of zero.
Zero Means Zero.
Add me to the list. Pretty much exactly as the story reported. Using debt card, several small purchases resulted in overdraft.
By the time I noticed by logging online (2 days later) there were over $125 in o/d charges. As it turned out, what caused the shortfall was I made a deposit I but entered it in our other (secondary) account register.
I thought the accounts were linked but the bank said only one could be linked, not both. That makes no sense and they couldn’t give me a better answer.
THE MOST INTERESTING PART of this story is that the WRITTEN notice of each overdraft was postmarked by the bank’s postage machine as 1-2 days after the charge but did not arrive at our home for 1 week. In other words taking 7 days to travel by mail 250 miles!!
If we had not known about the overdraft until being notified by mail, it would have been dozens of charges.
It’s happened to me. A $10 dollar overdraft fee. It was a mistake similar to what happened in the article. I called the bank, Wachovia, and they fixed it right away. No problems if you just ask politely.
Regions Bank has a 2:00 PM cutoff time for deposits, so even if you find out after 2 PM that a debit card transaction you just made will cause an overdraft, there’s nothing you can do. They need to level the playing field.
Regions Bank processes large items first, so if several small items are processed the same day and the large item caused the overdraft, you will be hit with a $35 overdraft charge for each of the small items, even if all of them would have cleared if they had been processed first. What a ripoff!
Wells Fargo is also great at charging accounts immediately and continuously. My son rented a car using his debit card as security – he was told the $500 would be return to his account immediately when he returned the car.
To make a long story short – it was not. The car company insisted they processed the release immediately but it took 4 days for Wells Fargo to return the money to his account. In the mean time my son racked up over $809 in overdraft fees and negative balance fees – purchases of coffee, lunch, a magazine etc., totally approximately $150 ending up costing him over $800. Each debit card purchase was less than $10 and each generated a $35.00 overdraft fee. generated a $35.00 fee then he got a $6.00 per day fee for negate balances.
If they didn’t feel the money was in the account why are they approving these transactions – it was not a service we requested.
The author has missed one very important feature: most account-opening associates will offer TWO forms of overdraft protection at account opening. The first is linking funds from another account.
The second and IMO better way is opening an overdraft line of credit. Both banks I worked with offered this. You sign up for a line of credit that is linked to your account. When you overdraw, funds are pulled from your line of credit. You are charged a flat fee of $15.00 for ANY overdrafts that day. Then you just pay a few cents’ interest on the balance until you have the funds to repay it. The interest rate is about the same as you’d get with a credit card. Typically the transfer fee is waived for customers who also have mortgages/loans/CDs with the bank.
This option depends on your credit, of course: if you can get a credit card, you can get an overdraft line. I can’t tell you how many times this saved my rear because I paid a bill from the wrong account, or otherwise did something stupid. It’s convenient and practically free.
Living on a fixed income is hard enough, but when you get hit with back to back 35.00 overdraft fees, makes it even harder. There should be a limit on these fees, especially since the bank gets my social security check as a direct deposit.
My last bank stated that they processed deposits before debits, but they routinely hit me with overdrafts by processing the debits first. so even when I transferred money from savings that same day, I would get hit. They regularly racked up $150 or more each month. Now I have changed banks and linked it to my savings so it’s a $10 charge, and I do a better job of keeping track of my accounts (yes VA Mother, it’s not that difficult to do) with the online banking tools and I’ve only had one $10 fee in about 18 months.
A few years ago, in one month Bank of America hit us with over $500 in NSF, and we had the devil’s own job to argue with Customer Service to try and get some of the fees reversed.
The cause? We made a purchase late Friday, and the merchant put through a pre-auth for the amount. Then Monday the post-auth came through – but the pre-auth still had 24 hours before it would clear, so we ended up with double the deduction for the purchase, which pushed us into the red without us even being warned.
Then several small checks came through, each of which was initially refused processing by Bank of America, and the presenters re-presented them more than once a day – every time clocking up more and more fees, all unknown to us.
Bank of America’s response? Keep $500 to $1000 in the account so double-dipping doesn’t cause problems. Not many can afford to do that (we couldn’t).
And checking by phone several times a week can rack up more fees, as we also discovered – at the end of the month.
Now we use INternet access to check our accounts several times a day. That’s been the only way that we’ve been able to monitor our Bank of America account reliably.
They do offer emailed alerts now – but they’re late and sometimes totally wrong.
Since both my wife and I have been victims of identity theft in the past, we don’t like to keep large sums (= more than $120) in our joint account (through which we can make online and other card-based purchases) because we have seen the experiences of friends who had amounts stolen from their accounts – and the incredible delays the banks invoked before refunding the stolen amounts.
They’re all pretty much the same, so there’s no way to escape this crass behavior for now.
The banks hold us all hostage for now – but therein lies their demise. Sooner or later there will be a huge backlash and the banks will fold.
In the “old days” the reputable banks stood by their customers through thick and thin because they had respect for them. Once they lost that respect they more or less consigned themselves to the current path, the end of which is probably coming into view about now.
I am disabled and live on SSI and a small pension from another state. I recently incurred several NSF fees because of the practice at my bank of keeping a deposit pending until they aid debit charges on my account…several NSF fees. These things snowball and it is very hard to get out of the hole they put me in even one NSF charge throws my finances for a bad loop. I’m glad someone mentioned the cash-only option. I need to go back to it. Several years ago, I used my bank only as a place to cash my paychecks, then drove around town paying all my bills with cash…only the rent was paid by check. I’m going to have to go back to that so I can get out of this hole. My bank was AMSouth and I had few problems with them once I got straightened out after I became unemployed and disabled. Now Regions Bank has acquired AMSouth and I’m running into them holding and not depositing monies when they come in…although my funds are from the Government. I’ve had the same sort of horror stories as others here and it is more stressful than anything I face in my every-day life.
With AMSouth I could, with confidence, keep track of my account activities and balances. Now, with Regions, I can’t count on that anymore.
Even if I were what some here refer to as “responsible” and kept my check register up to date, what good would that do if the monies you indicate as deposits aren’t posted at the time you make them? I’m sick of being called a “whiner” when all I want is to use my money wisely. Years ago I banked with Bank of America, when they started charging you a fee to use the tellers inside the bank instead of the drive up window I left.
It is time for me to do the cash only thing. When my deposits come in I’ll go in and remove all but rent money and a couple of online bills that come in through the month. Then the debit card will be thrown in a cash box with my personal papers. It isn’t easy to get around having to have a bank account, but I’ve done it before and I can do it again.
Oh, and with Regions the NSF notification takes nearly a week to get to you by mail.
I think the article is poorly written and doesn’t do justice to advising people to obtain an overdraft protection plan. These usually as stated toward the end, may have a $5 or $9 charge for a transfer, but way better than overdraft fees of $35. The $35 fee is not for an overdraft “loan”, but for dealing with the overdraft decision and handling, which may involve, notices, collections, and in some cases losses. It is the individual’s responsibility to know their balances and not overdraw an account, but the protection plans are a logical and efficient mitigation to incurring the large fees folks are referencing.
I wish I could show you the actual numbers and order of events of my last (and worst) overdraft fiasco, but the trauma of it all has just made me block out the particulars. I overdrew my account by 34 cents ($0.34!!!) and by the end of the day, I had over 200 dollars of overdraft fees. I probably would have been annoyed if I had been charged a single overdraft fee for that less than half dollar overdraft, but I would have sucked it up as it was my mistake and I knew the consequences. However, the bank bundled all of my charges, charged an overdraft fee for the first of the bundle, and then a fee for each consecutive charge. I was on the phone for hours trying to get them to explain to me how this worked and only ended up with a partial refund of the fees. One bank worker I spoke with actually said “Well, if you kept better records this wouldn’t have happened. You have to subtract your purchases from your balance.” I think I sprouted about half of my current gray hairs that day.
I use Washington Mutual and they hit me with a $35 overdraft fee for a 50 cent transaction
50 FREAKING CENTS
turns into $35.50 >_<
that there should be criminal
Here’s an idea: don’t spend money you don’t have.
Let’s be frank here, we’ve all had to swipe that card knowing the full repercussions, including the snowball effect of all of your “pending” transactions clearing while your account is overdraft. While it may be annoying to realize that you paid $37 for a $3 coffee, WHY SHOULD your bank loan you $3 for a coffee?
And the fees are that high so you don’t do it again!
I personally use Bank of America for my bank. If i go even a dollar under I get slapped with a $100 dollar fee
I once checked my balance before paying and was STILL charged an overdraft …the bank said it didn’t credit the account yet although the money was showing up as good on my ATM balance check…. HUH?!?!?!?!
Let me just say that Bank of America gets about 12 overdraft fees from me per year!!! They will intentionally keep letting me charge really cheap things such as coffee or a burger and before I even know it I am in the hole with them like $70.00 (that was what I paid straight out of my payroll check yesterday). It the biggest scam I have ever delt with not to mention its on a continual basis! Great bank isn’t it. They could single handedly keep me in poverty forever!
I’ve been banking with Bank of America for some time now, and I have never paid them a single overdraft fee. You see, I understand that it’s my responsibility to keep track of my “available” balance. I understand the timing of deposits and debits, and I understand that when I swipe my card somewhere, I need to have the funds available in my account.
I feel sorry for those of you that pay hefty fees, but I’m in the minority camp here when I say it’s your own fault. Overdraft fees are 100% avoidable. You can choose to never pay one again! Sadly, though, you will, because you don’t care enough to keep a register or keep accurate track of your balance. You act irresponsibly, then get angry at the bank for what they did to you. Man up, people! You did it to yourself!
I have to admit that OD fees are ridiculous. Just this week we accidentally over-drew our account by $.20 and the bank charged us $20!! Can someone please explain how an “over-draft loan” (as its being called) can legally charge me 100 times what I went over by? I’ve never had a problem with my bank before, but charging me 100 times as much as I cost them…. can’t they spare a person 20 cents??
The problem with overdrafts is not disclosure, it’s not ‘opt-in’, it’s that it is a illegal practice altogether, and needs to be stopped immediately.
We already have a regulated and somewhat fair system to spend money we don’t have, it’s called credit (or a loan). An overdraft is simply a loan that circumvents the banking laws, and because it mostly affects low income account holders, there is no lobbying against it (until we get involved)
Even the worst payday lenders are not allowed to give out such terrible loans, why are banks? because they have a big lobby?
Overdraft fees are terrible.
What gets me is the gas stations. Exxon will check for $1 to see if you can fill your tank, and if it sees you have $1 in your account, it will let you do it. They then wait about 4 days to put the real transaction through.
Then there are all the under $10 transactions. Yeah – I used my debit card at McDonald’s one morning for $3.15 – and got hit with a $35 overdraft charge from Wachovia. Most expensive Egg McMuffin EVER.
Of course they put the big transaction through first, and hit you for the six miniscule ones at $35 a pop…
I, and several co-workers, have closed our Washington Mutual accounts over just this dispute. They will happily charge multiple overdraft fees for tiny transactions made AFTER a huge deposit and claim “timing issues”. When confronted, they HAVE waived many of these fees, indicating that they themselves KNOW they are playing games. These banks make enough money on us – let’s not give them a chance to further screw the public. JUST SAY NO.
I work for a financial institution which does provide overdraft protection if, and only if, the member chooses to have it on their account. At the point the member consents, it should be their responsibility to keep their account in order. Employees of financial institutions should not be viewed as account babysitters. If you are a qualified adult and have an account, make sure you know where it stands. Overdraft protection seems better to me than getting hit by penalties from retailers if you bounce a check. Account holders should also read all information given to them prior to opening an account. The information is provided for that reason. It’s not given to them for the benefit of the institution. It’s for the member’s benefit.
I got overdrawn by $11. Within a week my checking acct was overdrawn by $200 because i didn’t get paid for 7 days to cover my mistake. It seems to me to be unfair a bank can charge $190 worth of fees for covering an $11 subway charge.
I just paid due to a paypal misunderstanding. I thought that when the bank had insufficient funds the act rolled immediately to the credit card. I knew my bank act had no money, but didn’t know it was like writing a rubber check until I received notice from both paypal and the bank. It was a tough break paying 52.00 for a 27.00 purchase. It could have been worse. Paypal attempts 3x until they roll over to the back up credit card. The bank did cancel the 2nd attempt luckily and paid with OD then and paypal didn’t attempt again. I had put the money in the bank right after.
Banks are blatant in their quest to skim money from account holders. I link my account, my wife’s account, and my daughter’s account so that funds are transferred electronically online simply to avoid such penalties. However, if I withdrew money from my account and then redeposited the same cash into my wife’s or daughter’s account, the bank should be obligated to acknowledge the deposit of funds as quickly as they recognize the withdrawal of funds, especially when both my wife and I use the same bank. Congress should force banks to show leniency towards account holders that allows 72 hours grace period for all withdrawals and deposits to properly be credited to the accounts. Banking conducted after 2:OO pm on Friday should also be allowed to catch up on Monday at midnight, before charging fees. This way, cash deposits can be made during Monday morning before the reconciliation takes place at midnight on Monday.
I wish my bank would just decline my transaction if I dont have enough money to cover the charge. That would save me the overdraft fees, which, as the article says, are way more costly than the actual transaction.
I was recently hit with overdraft fees when there was a computer error that charged my card from a hotel I was staying at. I had other purchases before I noticed the error. The computer error was fixed, but the bank refused to give me back the fees. They said that it was the hotel’s fault and that I should get the money back from them….I ended up $200 overdraft. It would have been so much easier for the bank to acknolwedge the mistake than for me to have to go deal with the hotel and ask them to give me those fees back. Such a rip off
I found out recently that BofA intentionally processes larger transactions before smaller ones. They claim this is in the interest of customer service; “to make sure a big amount like a mortgage goes through first” as one agent told me. This is total BS. They want the bigger amounts to overdraw your account first so they can charge $35 for every cup of coffee at Starbucks.
I haven’t had a checking account in years, and have saved a lot of money just by that fact… When I had automatic deposits, as a single parent I thought overdraft protection was helping me to make ends meet until payday – but each direct deposit was automatically reduced by overdraft fees, until it became a vicious cycle … No one ever “bailed me out”, so I don’t feel sorry for banks with financial issues these days…
Bank fees are like fleas, and not just the overdraftfees. Banks “nickle and dime” their customers with all sort of fees that line their pockets while picking the pockets of their patrons who, after all, are the ones who give them the capital they need through their deposits. I got sick of the banks and their impersonal service and lack of concern for their customers. I may be an old dog but I learned a new trick. I use credit unions who, in theory at least, are owned and governed by their “members”. Goodbye flea feas.
Our credit union provides this “service”. I once thought it was a nice feature. But after last month, I would prefer they just didn’t let the debit card work. I’d made an error in my Quicken register; and to make a long story short, had no idea we were low on funds. None of those notices had arrived in my mailbox; so you can imagine my surprise when I went to make an online payment on July 31st and discovered we were not only in the negative; but had been hit with overdraft fees 11 times! At $23 a pop, that left us hurting all this month and certainly screwed up our budget. The article was right: many of the fees were charged against items that cost less than $23. In fact, the most sickening was being charged a fee after my husband had used his debit card to pay a $1 charge at the County Tag Office. After we got paid on July 31st (Thursday), I got a big stack of 11 individual notices from the credit union that Friday. Many of them were printed as early as July 23rd; but all had the same postmark – July 31, 2008. The jerks held on to the notices and mailed them all at once!
I don’t mind paying a fee for my mistake. What I do mind is that I got hit with overdraft fees for “insufficient funds” on July 31st because they claimed that our direct deposit paychecks did not put funds into our account prior to those purchases being made. The deposits are made at 12am; and the gas bought on the way to work was made at 7am. I don’t get it. Nor do I get why I must pay the fees for credit (not debit) transactions made on July 28th-30th that didn’t clear until August 1st. The transactions cleared the bank on a Friday; but they still charge me because on the day I used my card as credit rather than debit, I didn’t have the funds.
I think what really stinks most is that I had plenty of money in savings that could have covered those transactions. Had I known we had a problem, I would’ve hopped online and transfered it over immediately. They don’t offer automatic service to draft from savings if the checking is low and why should they? That credit union made $253 in overdraft fees on us. That would have paid the power bill, filled up our gas tanks ~ 3 times, or paid for two weeks worth of groceries.
The overdraft process is a huge scam to poor Americans. If a debit card is authorized then there should not be an overdraft fee. I have seen my account be charged over six hundred dollars for hidden fees that the bank can not explain. And they get away with it. I ended up having my paycheck go to a savings account so I wouldn’t end up pennyless on payday. I think the charges should be refunded to customers.
Unbelievable amount of whining and lack of personal accountability. If the bank gives bad service, close your account. Checking accounts work much better if you put the funds in before you try to draw them out. That is just what we need is the federal government to balance your checking account. Surely, there are more important areas for elected officials to spend their time. Swith to a better bank and eliminate the bad banks.
I am sick and tired of the “overdrafters are irresposible spenders” response. I sick of the “If you kept better track of your ledger you wouldn’t overdraft” response too. This very well is sometimes the case, but MOST times it is simply that some people do not have alot of income, and come very near zero with every single paycheck. When something goes through automatically that turns out to be a penny more than expected, it causes a chain reaction. The banks with their $35 fee per transaction (Wachovia), and a notorious habit of holding cash deposits (once again, Wachovia), particularly if a balance is negative (several days at Wachovia), and tellers misunderstanding when payroll deposits will be available (they’ll tell you “tomorrow”, but then it ends up being “I mean next business day.. Monday”), Charging $2 fees for getting an account balance from a teller, and on and on. They play games with multiple balances and “invisible” balances that the bank manager can see, but that do not show up on web-based transaction sheets. When a transaction is sent through, it does not get paid, but the money is reserved out of the “available” balance. The amount may take three days to process before it is transferred into the “posted” balance. If you make a deposit the second day, cash at the counter, you MUST ASK them to make those funds available immediately, AND there must be a teller manager on hand with the password to perform such actions, and even then you will get a stern talking to. If you deposit your cash and walk out without asking for the funds to be made available, then go get a drink on your way home, you will bet your booty there will be a negative balance in your near future.
Cash, Payroll, and Government check DEPOSITS should be REQUIRED BY LAW to be IMMEDIETLY AVAILABLE, REGARDLESS OF THE TIME OF DAY. If they can give you $100 immedietly at an ATM any time of day, they can make a CASH or PAYROLL deposit at the counter immedietly.
A bank with whom you have an account should NOT EVER UNDER ANY CIRCUMSTANCES REFUSE TO CASH AND/OR DEPOSIT A PAYROLL CHECK, even if the account is negative! IF the account is negative, their entitled to take their share to bring the account to zero, then the rest is MINE. I can cash it at a check cashing store! I Can cash it at the bank it was drawn on! I can take that cash and deposit it in MY bank, but I can’t use ANY of it when it gets there!
This is one of the reason I have stopped doing business with banks. All of my accounts are in Credit Unions. I have found you get better service and very low or no fees on most of the things banks charge big bucks for.
overdraft protection can be dangerous if your debit card is stolen and the theft knows your pin no. i cancelled my overdraft protection for that reason.
In the case of account transfers within the same bank, the banks should be required to credit the recipient account at the same time they debit the sender. That’s not going to happen unless Congress writes it into the law.
Do these banks realize they are bordering on being charged with criminal behavior? It’s called the crime of “usury”, Mr. and Mrs. Big Bank. If they charge a flat $35 fee, and the overdraft amount is, say, $20, outstanding for, let’s say, 2 days, that amounts to a 32,000% APR. Even the mob doesn’t charge that much on a vig!! It’s about time somebody called their local police and demanded they lay a usury charge against 1 of these banks. Perhaps having a bank’s Board of Directors spend a week in jail would help to straighten out this mess …
Are you kidding? “Up to $35 in overdraft fees…”
My bank charges $39 per overdraft – it’s usury, not a fee! I was told by a (very apologetic) bank employee that “it’s disgusting. Banks used to make their money on loan interset, but now it’s all coming from fees like these. I hope that Congress will pass laws like those that are coming into effect in the E.U., which limit overdraft fees to a percentage of the overdraft.”
It’s a sad day when even the bank employees are ashamed of this practice…
This is they day I’ve been dreaming of. I hope someone can do something to put a stop to the overdraft rip-offs
I like to think that when I don’t check my bank account for, oh let us say, two days, that I won’t get an upsetting shock when I do. That has not been the case quite a few times. Coming home from a weekend getaway to see that something went over $1, and now I have nearly $100 in OD charges…does not inspire pleasant feelings towards my bank. Especially when I notice on a Saturday night…
I keep a “close eye” on my account balance by using online banking. But despite my vigilance, my bank recently charged a $39 overdraft fee to my account. The problem with this is that my account had plenty of money to cover my expenditures to date. I had NOT over drafted my account! So while I was out running errands, completely unaware of this unjustified charge, I racked up FOUR more overdraft fees of $39 a piece because the original fee itself put my account in the negative. All of my expenditures during this one day were small amounts that added up to far less than the sum of all these fees. At the end of the day I was charged nearly $200 in fees because of an over draft that never happened. When I deposited my weekly check the very next day, I was barely able to break even and bring my balance over zero. This puts me behind on rent and bills if I choose to buy groceries or put gas in my car to keep going to work. I never had the choice to opt in, or opt out for that matter. I’ve brought up my concern with my bank and was told that I would have to pay an annual fee to opt out of overdraft protection, that was of course if I qualified to opt out. To qualify for the opt-out choice you can’t have a history of account overdrafts. Someone please wake me from this nightmare.
There is a simple cure for this: know your balance. Keep a check register. Look at your account online everyday. You won’t get overdrawn. Get a line of credit that protects you for the unexpected. As for the people that complain: having a check returned is way worse than getting hit with an overdraft. And imagine you are ever in a true emergency and the ATM won’t cough up any money because you get overdrawn. I know banks charge a lot but hey, who cares. It’s so easy to avoid this. The reason you get overdrawn is because you spend money you didn’t have, not because the banks scam you.
My nineteen year old son, is in the Army and he is still learning about responsible spending. He is trying real hard, but he only gets so much money every two weeks and by the end of the two weeks his paycheck is gone because of the 35.00 fee he gets hit with on every transaction. He is frustrated because he feels he is in a no win situation. And the main problem is the use of his debit card, he thinks he has money in his account because it approves the transactions. And he gets hit everytime he tries to check his account via ATM, and that 2.00 fee becomes 37.00 He of course is learning the hard way like so many young people. Mom and dad can only help him so much. We are proud of our son and support all of our service men and women.
Over the years I have been hit with several of these “loan fees”. The thing that I find the most frustrating is that bank with post the transactions from largest to smallest. The result is that if they had posted smallest to largest then perhaps I would have been only charged a single fee, however since they posted largest to smallest, I have been hit by numerous fees. The worst is why I pay a $25 fee for a $1.75 transaction. I have tried to argue my case with the bank, but they tell me that it’s my fault and there is nothing that they can do.
I got rid of my over draft protection many years ago when I realized that they were taking what seemed like longer to clear checks and back transfers. Every month I was in the hole. I finally closed that account, got a new checking with absolutely no frills. I laughed when they asked if I wanted overdraft. The selling point was that I didn’t have to use if I didn’t need it. I suggested that maybe they make it imperative that I use so that they could charge me more money. No thanks. I recently looked at my husbands business account statement. They charge him (CHASE – do avoid) for every deposit. He’s getting hit with 60 fees per month for the pleasure of having a small business account with them. Time to change banks.
Same deal with Wells Fargo. I recently got hit with 10 overdrafts, a few for purchases less than $5. Was it my fault? Yes, to some degree for not paying more attention. But $350 worth of charges? I’ve been a customer since 1983, have made regular deposits. We’re not deadbeats, our credit reserve was used up due to an illness, and we’ve managed to pay it back. The back did reverse about 4 of the overdrafts fees as a “courtesy”
I’d rather my card be declined.
The banks are worse than payday loan companies.
Oh and to the person who worked in the bank and said people are trying to float loans….how can you flat a loan with a debit card? If I use my debit card and my account is overdrawn, how am I breaking the law if the bank allows the transaction? They are sanctioning it by charging a $35 fee.
Recently, I experienced a similar experience as in the article. I transferred $200 to my checking account, knowing my cell bill would be coming out. The money came out of my savings account, but didn’t get posted until the next day. SO my money was somewhere floating in cyberspace. Suffice it to say, I ended up with $170 in fees, as their fees just start to spiral as they make you more in the hole. Personally, I think it should be illegal. Credit cards and loans have to stay within a certain % for loans, so why are banks allowed to charge sometimes more than a 100% interest on what is basically a loan??? It should be a fair % of the overdraft
My view is this: If a customer does not have the money in the account at the time the charge is made, the charge should be denied. Cash transfers from account to account (of the same person) should not take very long to post. Even if transactions after 3pm count on the next business day
May we should go back to storing our money under our mattress
Security Bank of Bibb County utilizes predatory practices with respect to this overdraft question. I got hit for 6x$30 a couple of weekends ago. I transferred money to cover the weekends spending, but they processed the OD fees first, then the deposit. The customer service rep laughed at me when I requested some leaniency on the $180 fee.
Yes. And it was all my fault. As for the amount of OD fees and how transactions are processed ALL that information was provided to me when I opened the account.
My understanding is that all banks must provide this information.
If consumers don’t read the information, they hardly have reason to complain.
I wanted to add from an earlier comment for those that say it is about keeping your checkbook balanced. Ever had a hold for something you knew nothing about? I have and even had the bank admit they did something wrong. They refunded half of the overdraft charges saying that I should have noticed THEIR mistake. I did notice their mistake, so why should I pay for their mistakes when I pointed it out to them after I found out? Our account never went negative until the overdraft fees hit. Who can you go to for help on this? First Midwest Bank in Danville, IL has no interest in helping, even when it is their mistake.
My bank has actually treated me fairly with regards to my overdraft protection. The one time I felt unfairly charged, due to a deposit, I was credited the fee back to my account. The only other times I’ve been charged were really my own fault. I know the deal going in, so I can’t blame the bank. The trick is – DON’T OVERDRAW.
If it doesnt hit my credit score – ill pay the $35. it would be great if they marketed it as – credit score protection, be late up to two months, but we charge you 35 per month…
I work for a bank. I know from dealing with clients on a daily basis that most of the fees poeple are charged could be avoided if people would simpley keep a checkbook register. 60% of poeple try to rely on memory or a balance they recive at the atm, which is not going to account for a check they have written that has not cleared yet. People need to grow up and recognize that they are in control of their own finances and that their bank is not their babysitter
Never, at least, not in the last 20 years… I never put myself in a position where I might be charged an overdraft fee. This is one of the published fees, and is in the fine print. If you are not sure about being charged an overdraft fee, then don’t spend the money. You really didn’t need that Starbucks anyway
I read one comment that said ‘banks are crooks’. Well, stop the presses!! You’re just figuring this out? Everyone should know by now that banks, and any American company are in business to take as much of your money as possible… get used to it, and protect yourself
Fees are big business people. Don’t listen to the banks when they tell you the fees are only covering their cost of doing business. It’s big profit. I work in large bank and reaping fees is becoming quite the science. Process the highest to lowest debits and check amounts first. Then after you bottom out they can cascade the fee charges on each transaction thereafter. Instantaneous debits while delaying credits. It’s all electronic right? Why shouldn’t the new law require the transactions be processed in the order they actually happen?
It’s only going to get worse now that they generally have the population on e-money. The banks are stacking the deck against you. You better be vigilant.
My credit union has overdraft protection loan available WITHOUT any fee!!
(yeah, that’s why I don’t deal with banks anymore!!! Hell NO!)
This is what I think: Banks report to their shareholders, not their customers, so of course they are trying everything they can to ripoff their customers to raise profit! What bother dealing with those monsters?
If there is for example 10 checks written on you check book all for small amounts and then 1 for a large amount. Wachovia Bank will pick the nine small ones first. Hence, you will be paying $350.00 in fees instead of bouncing just one check for a larger amount and receiving just a $35 cost. Nice Business there in!
I got charged a 30 dollar fee because of i went 2 cents over? If my calculations are right they charged me %150,000 on a 2 day loan. This is America we dont have to put up with this!!!
Who cares which order the bank processes the checks. IF YOU DON’T HAVE ENOUGH MONEY TO BUY SOMETHING DON’T DO IT! Secondly, don’t be ignorant and LEARN how your bank processes transactions, and charges fees. Ask questions. You need a bank account your entire life. If you are not happy with the bank you are at, find a new one!
I would still like to know if it is legal to charge for the overdraft and place a name onto the Chex Systems list. Isn’t that considered overzealous?
That is why I stick with a credit union. I have an overdraft line of credit that only charges interest like a credit card and at very reasonable rates being they are a credit union. They do not charge per incident.
I was slammed by Citizen’s Bank by making several small purchases and then 1 large purchase at the end of the day. I knew the large purchase would be flirting with my balance, but it was worth the risk. When I got home I went onliine and saw all the charges and I did in fact go beyond my balance on the 1 purchase. The next day, all of my purchases were reordered from greatest to smallest. 1 Charge had turned into 8. Citizen’s Bank chrages $39. My assumed $39 charge had turned into $312. I went to the bank. The manager said,”This is my least favorite bank practice.” He was willing to reverse the fees until he saw a had fees reversed for a “Bank Error” He reversed 2 fees. I have never done business with Citizen’s Bank again.
My bank provides overdraft protection for free. You should always shop around and use the best possible bank. My bank also always me to use any ATM and refunds back to me any user fees that are charged. Try USAA Federal Savings Bank
I’ve been hit with HUNDREDS of dollars in overdraft fees in the past because I had NO IDEA that I was even overdrawn.
Instead of placing a hold on your card so that your purchases are DENIED, of course they allow you to purchase without even knowing you’re being penalized.
It’s absolutely ridiculous, and I couldn’t be happier about the messy situation that all these banks are in now.
One word: karma.
My husband and I have been charged thousands of dollars because of these practices. We both have electronic deposits for our paychecks. We alsohave several electronic withdrawls. There are months when the deposits and withdrawls come through on the same day. We are charged overdraft fees on those days. We try to keep track of everything using internet banking; however, we are locked out of our account electronically more often than we are able to access it. To add insult to injury, I was recently informed by a fellow volunteer at a small non-profit for whom I am a signer on the bank account that they were given online access to my bank account when they went to check on the non-profit’s account. I’ve been working with the bank to resovle these issures, but I am completely disgusted with this entire situation. As far as I am concerned all banks are a scam.
Here’s another trick: when you buy gas with your debit card, they approve $1 on your card, then a few days later the actual charge hits. So, if you buy $50 worth of gas, your account LOOKS like it has $49 more than it has. Then the real charge shows up and BINGO…you’re overdrawn. Solution: don’t use the debit card feature – use your PIN wherever possible. That way, the charges show up instaneously.
Another bank fee I think is unreasonable is the $5 to cash a check drawn on a commercial account, if the payee doesn’t have an account at the same bank.
Wachovia does this and so do a few others. It seems to me the people who wouldn’t have checking accounts are the ones who need the $5 the most and that banks should cover the fees for processing an accounts transactions from someone other than the check recipient.
Seeing the other comments, I am at least glad to know I wasn’t alone on this with Bank of America. I have never had the account actually go in the hole (meaning that I made a deposit before the pending amounts actually cleared), yet I still got screwed for $35 a pop. Any regulation by congress can’t come too soon, as far as I’m concerned.
You poor poor people complaining about overdraft fees. How about holding yourselves accountable for your actions? If you have an account short of funds you probably shouldn’t be going to Starbucks in the first place. Then again, you’re probably the same people Banks will get stuck with working with you on your mortgage because you took a subprime loan to buy a $700K home while working at Wal Mart.
Anyone who is a “victim” of multiple overdraft protection fees EACH month is someone who has never balanced a check book in their life. But hey, if you don’t mind paying $40+ for your $4 McD’s meal because adding and subtracting is not your bag, then I’m fine with that!
Also, the rationale on why banks pay high to low is because most people, logical ones anyway, write/pay their most important bills/items first. I.e. they pay the mortgage/rent, then the car pymt, then insurance, credit card, all the way down to the Claire’s boutique at the mall and Starbuck’s on the way home. Which would you rather have not paid in case you don’t have enough to cover things: hmmmm…mortgage or coffee.
Overdraft protection services aren’t exactly new. They have been common practice at almost every bank/credit union for 5+years now. It gets hard to believe when someone claims ignorance that they had no idea this service exists. Again, balancing an account is a nice remedy against this.
I have been charged overdraft fees before. It is an absolute scam because not only do they hit you with the overdraft fee, they also charge a percentage of the amount being drafted and add it as an additional fee. It’s ridiculous. In this economy it is not necessarily the fixed expenses that hurt the most (i.e. rent, water, electricity, gas, etc.) it is the unexpected expenses like theses fees that continue to add up.
I went through unbelievable hurdles trying to get U.S. Bank to turn off my overdraft protection, but I did finally get it done.
My full story is here: http://www.rfjason.com/article/usbank_screw-you-overdraft_protection
I include instruction on how to force U.S. Bank to turn off overdraft protection, how to get around their lies and shenanigans, and even AUDIO of a USB rep denying that overdraft protection exists even though I had mine turned off at his very branch!
My main concern with the Overdraft protection, and the fees associated with it, is that even if you make a deposit, those funds are generally not avaliable to you the same day. Direct Deposit make even take the 5 to 7 days to clear an account. Why in this age of technology are banks so far behind?
It would seem logical that if you make a deposit, wither at your local bank branch, direct deposit, or EFT, those funds can be verified, transferred and posted to your bank account the SAME business day. What upsets me is that some banks will charge you if you make a deposit to your account, a paycheck for example, and it does not clear for some reason – they hold the DEPOSITOR responsible! Personally I feel that Overdraft fees should reflect the amount in excess of the balance; for example, say I had Lunch at Subway, and it cost me $10, but I only had $8 in my account, the bank should consider that and not charge As much for that $2 I was short – $35 is excessive for $2 short. And yes, i do feel that the higher the expense, the higher the fee, no to be in excess of 10% of the difference between the balance and the shortage of Funds insufficient. So If there’s $400 in my account, and I accidentally go over by $15, 10% of that would be $1.50, so you would only be under by -$16.50 instead of -$50.
i added up the overdraft fee i had accrued one year from the bank i was with and it was over $600.00!! and that was just from the reciepts i had saved!! ridiculous! and who is this charge “convenient” for – THE BANKS! of course the charge is approved! the bank gets an additional $35 (plus the $2.50 or $3.00 ATM fees! it’s a racket! YAAY Barney Frank!
Go with a credit union. They tend to not nickel and dime so much (at least not for now). We have a savings and LOC with them and if the checking account every goes negative it automatically rolls over to savings first, then LOC. And they only charge a buck for each roll-over no matter how much the original transaction. Although I’ve been able to eliminate the mistake of every rolling over and saving my dollars by meticulously micro-managing my account EVERY day. I pull up my account at least once a day, sometimes more, just to keep tabs on everything. But almost all debit card transactions post real time (whether its a debit or a credit to the account). Deposits post real time. None of this before-3:00pm-on-a-business-day-beat-the-clock crap. I’m telling ya . . .go with a credit union as opposed to a bank. Much more user friendly.
I hear a lot of horror stories about overdraft fees, and it seems like some banks really take advantage of people. I myself snowballed overdraft fees until I was about three hundred dollars in the red–a considerable sum when you live on the money I do! However, my bank really worked with me when I came in for help, and the cause of the overdrafts was completely my fault in the first place. I keep careful track of how much I spend now, and I always double-check to make sure the money I need is actually in my account before I try to spend it. By keeping a small buffer in my account at all times and adding to it periodically, I allow some room for the small mistakes I inevitably make and avoid overdraft fees altogether, and when I do have a problem, my bank bends over backwards to help me out–the advantages of small-town living!
Yes, I was hit with 4 overdraft fees, $35 each. All because the bank didn’t have the funds transferred from my savings account when the transaction was done. Once I spoke with a Bank Representative, she hung up on me when I was explaining why I should be reimbursed. I called back and spoke with another Representative and he refunded me only $35. I then sent an email online and was told someone will look into this. To this day, no one has gotten back to me.
The name of the Credit Union in Iowa City is the University Of Iowa Community Credit Union. I have held an account with them since 1988, I used to be proud to be a member, now I just want out. They also clear biggest checks 1st to rack up charges. And they will not clear a check w/out the fees even if you were short less than $1. I have paid $40 on a check that was 20 cents short in my account – my fault I know but really!
The compounding problem comes with some banks’ policy of paying checks presented against a person’s account in a structured order from largest to smallest. This can turn one overdraft fee into many without any change in the number or amount of checks presented on a given day. It should be a prohibited practice.
You want to talk about overdraft fees? Put Chase Bank at the top of your investigation list!! They will suck every extra penny out of your checking account before you even know you’ve made an error, or hold transactions in the background and run them through all at once so they can charge you overdraft fees up the ying yang!!
Then they have a policy, that they just dont reverse any of these charges unless you can prove it was a bank error.
Stay away from chase. If you want to know why JP Morgan is a solid financial company, it’s because the overdraft fee’s provide the company with enough profit for all the bigwigs to have a nice life. NO MORE.
INVESTIGATE INVESTIGATE INVESTIGATE. I keep trying to catch them… hopefully you can do better. AVOID CHASE BANK
Nice to see this subject getting some airtime. While it may come down to basic money management, these overdraft fees are essentially, loans. Yep. Banks need to regulated further, credit must be restricted even more and we as Americans need to STOP living beyond our means and get back to the concept of SAVING MONEY, NOT HAVING CREDIT. The banks do not want this. It’s bad for THEIR business. “F” the banks. Let them fail. People need to learn.
Blame the big bad bank for collecting a fee you agreed to pay when you opened your account. The fact that you were fiscally irresponsible could not possibly be your fault. Whether they clear the larger items first or last,the fact remains you spent money you didn’t have. I love the conspiracy theory that fees are a device to keep the poor man down. It’s a service provided at a price, if you don’t like the price, shop around for one that is going to fit your budget. Better yet don’t give them the satisfaction of overdrafting your account.
I convinced my son (18 years old) to get an account so he could learn the ropes of banking etc. He got it with Wachovia. He “forgot” a $40 purchase which put him in the red. Not realizing, he made 7 additional purchases totalling less than $33. Wachovia hit him for $35 for each swipe totalling $245 plus the 33 he was negative. What a way to teach a young man the benefits of haing a bank account. After several threatening phone calls from their collection dept, and discussion with a branch manager, they deducted about $100 from the charges. My son makes slightly more than minimum wage. Yes, something needs to be done to protect the consumer from this outrage!!!
Bancorpsouth BXS
Does not preauthorize or place funds on hold when you use your debit card. One time I had 10 small transactions over the weekend. The following Tuesday my carpayment, which I forgot about, was auto-drafted from my account. They posted the car payment first, then my weekend transactions from largest to smallest and charged me over $300 in overdraft fees. What a load of sh#$ Obviously I complained and closed my account the next day. I would pay for the payment I forgot about because it was my fault, but not the rest of those outrageous charges.
Yes I have been hit with overdraft fees. The frustrating thing about it is I watch my balances on-line and while you can see your balance, you cannot see what they are paying out and the overdrafts come after midnight at least for my Wells Fargo Account.
Is this why some banks tie “free” checking accounts to a condition that you use your debit card so many times a month? Because people can make an overdraft mistake and when they do it is a windfall for the bank. As many commenters note, it always seems like your largest transaction clears first, no matter what time of the day you made it, followed by the small transactions, no matter what time you made them, and that order causes a maximum amount of penalty fees. I even heard an ad during the Dave Ramsey show for a checking account which has a debit card minimum usage condition. Hopefully I am wrong, because I really enjoy the Dave Ramsey show. I know his answer would be to simply not overdraw your account!
Overdraft fees are a real scam. I went to visit one of my company’s offices in the next state. After my business was taken care of, I realized I didn’t have cash in my pocket for tolls. I also didn’t have my check book with me. I stopped at an AMT and tried to withdrawl $10 but my bank has a minimum $20 withdrawl amount. I only had $18 in the account but the ATM gave me the $20 and my bank hit me with a $35 overdraft fee. What a joke!
About two years ago, I was hit with overwhelming overdraft charges. A deposit was not put through on the day I was told it would go through on (the bank’s fault, not mine). I overdrafted my account by $12. The first fee was around $40, but it compounded every day. This happened on a Friday, and by the time I checked my bank account on Tuesday, I owed over $200. It was absolutely ridiculous.
This has happened to me more recently with a totally different bank, except the initial overdraft was my fault. I overdrafted by $1 and the fees totaled about $50.
UBOC is notorious with these type of fees and not only to you get his with the OD fee of $34, if a deposit is not made to cover the OD within 3-5 business days, you are hit with an overdrawn account fee, plus a late deposit fee. They make sure they get their ‘pound of flesh’ so to speak!
We pulled out of Bank of America after we got charged for more than $300 dollars in one week-end while we were on vacation, $35 dollars even for a cup of coffee, they did not reverse the charges and in February we cancelled are account with Bank of America, I wish some one took some action against such bullies(Bank of America branch @ US41/Big Pine way, FT Myers, FL
I have had this same experinece and been charged 30.00 for being a couple of dollars short. I understand that I need to be responsible for my account but sometimes you do forget and dont write something down especially if you have written a check. I just think the fee should be in balance with the amount of the overdraft. I end up feeling like Ive been robbed at gunpoint!!. The banks will of course say its all fair but I dont think there would be all this uproar about it if that was the case. They will even give you an overdraft fee on a pending transaction, then that transaction drops off if the service establishment hasnt presented the charge but they sure dont take off the overdraft fee. This happens alot if you use your debit as a credit transaction. Im fed up with all of the rip-off banks.
My bank prioritizes their processing for largest debits to least. In other words, if I have $100 in my account on Monday. I debit 5 separate transactions at $10 a piece on that day. On tuesday, I debit a $75 transaction. All three transactions will clear on Wednesday, and they will process the $75 charge first even though it was the last transaction to occur. This would result in 3 overdraft fees of $35, versus the one, had they processed in chronological order. They claim it is a service to make sure the larger (and more significant) amounts are covered. It is obvious that it is a way to incur more fees. This would be Wells Fargo.
At my bank i have a checking account (where i keep an average of $2000) and a savings account(where i keep over $20K). I have direct withdrawl set-up for payment on my credit card, insurance… as some of these payments are automatic, I dont always know when the transfers are made. I have been hit with $30 overdraft fees on multiple times due to the automatic payments. When I call up the bank to explain that I have a savings account with them that would more than cover the small amount of overdrafts, they tell me they cant deduct the amounts from my savings. What a crock!
Chase is notorious for processing your largest items first thus putting you overdraft, this way all other pending items that process after this we cause an additional $35.00 overdraft fee
As far as linked accounts go…My son, who has little money to start, transferred $50 from savings to checking (on a Saturday) so he could use his debit card. He charged $4 on his card Sunday. On Monday, before the transfer was processed, they processed the $4 charge which there was not enough money to cover. The bank transferred money from savings to checking and charged $5 for the service (not too bad). Then they transferred the $50 but there was not $50 left after the bank transfer and charge so he was hit with an insufficient funds charge of $35.
I get paid once a month with automatic deposit. The day before I was to get paid, my son had an eye appointment and I paid for his new glasses with my debit card.
I thought I had over $100 in my checking account so I wasn’t worried, plus I had savings overdraft (even though that was pretty sparse at that time but I got paid the next day, I figured).
Later that night, my son and I went to KFC for dinner, got some essentials at the grocery store and other little things.
The next day, I checked my balance online only to be shocked to see $175 in fees (five OD fees at $35 each) because I had actually had $95 in the account.
Well, that over-drew me $10 with the glasses first and then it was a landslide as the other little things from the day were processed, each one under $10.
Overall, I was overdrawn a total of maybe $35 between the five offending transactions.
I called the bank right away, of course, and they would only refund $40 even though I pleaded with the manager because I only get Survivor’s Benefits for me and my son, I had to have that money to survive but he wouldn’t refund more than $40. Even after I explained it was simple error on my part and it wasn’t more than $35 overdrawn TOTAL and I got paid THE NEXT DAY.
I could understand if I was always overdrawn, always calling, but I that was the first time in many, many months that I had that problem.
yes – i’ve been hit excessively and i refuse to pay? it is very unjustified. im my understanding, if i have 20$ as of 9 am friday and made a deposit through the ATM of $600 after 12pm, i honstly know using cash basis that i have $620 in my account – but according to banks the only available fund is $100 for the deposit i made. according to Bank of America, the full amount will be credited on tuesday AM. but if you will look at your statement, that deposit you made on friday after 12pm is shown the same time. for all you know, you already have money the whole friday, saturday and sunday and you tried to make purchases. but since your available balance is only $120, according to the bank ( 20 plus $100 available balance from your $600) deposit, that will make your account overdrawn. they will then charge you an overdraft fee of $35 for every small transaction you make – like $35 for a $3 coffee.
i mean seriously, with the whole America dealing with this bad economy – overdraft fees are unlawful.
remember, banks uses our money for their business. how much interest do we get for every $500 maintaining balance we make – less than $10 dollars a month.
we are being robbed!!!!
Yes! Exactly as it is in your article. It has happened to me numerous times and I have ended up paying as much as $200 in OD fees. It’s ridiculous. I’ve since asked my bank to NOT provide me with OD Protection and I just make sure I only spend what’s in there. It’s really frustrating.
My banks has this option however its like a credit line. so I have $500 extra if I have to dip into, I don’t get hit with a fee, and just need to pay it back like a credit card, so in the end I may pay about .03-.10 cents as log as I pay it back that month. So I like this Overdraft Protection and not sure why more backs don’t do it this way.
I have banked with Bank of America for over 10 years. I bank online and my husband also has an account. Several months ago BOFA changed the way they process debit and credit transactions. In April this year while my son was hospitalized I had several small debits charged at the hospital cafeteria….I went home around 2 am one morning to check on my home and when i looked at my checking acct online I saw that I had a pending charge for $6.23 and my balance was only $10.00…I was so happy I thought to log on and check my acct (I had not deposited my paycheck because of my son’s emergency hospitalization). Nothing was overdrawn but I did know of a couple of charges made at the hospital that I did not see posted yet so I transferred $100.00 from my husbands acct and it immediatly credited to my acct as avaiable (and immediatly left my husbands acct!). The next evening I deposited my paycheck and checked my balance and all indications were that I was overdrawn even after my deposit. As soon as I got home I logged on and saw that the bank had assessed overdraft fees for charges I had made before transferring $ into my acct but before they showed online…also the order of charger and debits had been changed around to pay the largest 1st and increase the banks NSF charges….I called and found out that the bank has changed how it does business this spring and you are charged NSF fees if you spend more than you have in your acct, even if you get a deposit into your acct BEFORE the overdrawn items get there. I was saved because I always copy and paste my online daily acct summary to a word document before and after I transfer $ from my husbands acct. At first the bank would not even consider helping me or refund any NSF fees until I informed them that I had saved proof that they had rearranged items to benefit themselves at my expense (more NSF fees)and would go to the press with this proof. That is all it took and the bank refunded every dime they took from me wich was over 150.00 in overdraft fees. I still have this proof and apology letters from BOFA customer service to prove it!!! I now copy my online acct summary every day and suggest everyone get into that same habit…it will make a class action suit much easier to prove….I now have debits and atm withdrawls that used to show immediately online not show for days, weeks sometimes and I know its is the banks latest way to try to force overdrafts by catching me unaware and hoping for a low balance moment to slip those charges in….For those of you that think I am paranoid…pfft, I know there is not a person watching my acct…I do believe that banks use computer programs that are designed to do it for them and watch millions of accts…
Most importantly…protect yourself!
One of the main points that I didn’t see in the article is the way banks process all transactions, especially when an overdraft occurs. The process I’m speaking of is they pay the largest debit first, and in some cases it is the amount that overdraws the account, then the smaller fees after that. What this means is more overdraft fees even though the amount overdrawn will remain the same if you reverse the debit order. So if you have 300 in your account and purchas 5 items, one being 310.00, the next 4 being 10.00, 9.40, 11.00, and 2.00. They will process the 310 first, racking up charges for all 5, whereas if the process the smaller amounts first you only have 1 overdraft charge. Crooks!
I work at a bank that charges $33 each time. It’s amazing that your checks will clear even though you didn’t balance your accounts that week. I’ve seen many people pay lots of fees for overdrafts up into the thousands but its not rocket science if you make a purchase write it down or at least know what’s in your account before using your debit card. There are many ways to check account balances these days… get online banking or get the 800 number for your bank and call in… There are even cell phone alerts when your accounts balances reach a specific level there will be a text sent to your phone!!! If that’s not enough… go down to your local branch and get acquainted with your banker… maybe buy him or her coffee and see how far that may take you. You have to remember that when your account goes negative b/c of a check that cleared or a debit purchase, that money came right out of the banks pockets and with that comes all the fees. Morale of the story PAY ATTENTION TO YOUR ACCOUNT BALANCES and DO NOT TAKE MONEY OUT OF YOUR ACCOUNT THAT YOU DONT HAVE!!!!
I’ve had horrible experiences with my last two banks before I caught on to what was happening. I currently have two banks claiming I owe them $800 and $589 respectively, due to overdraft fees and honoring items that shouldn’t have cleared due to the account being closed 30 days prior!
In my most recent experience I paid over $2,000 in overdraft fees, believing that I wasn’t balancing my account correctly. At one point I was negative half of my weekly paycheck before I even got paid. I ended up being late on my rent and my utilities multiple times while trying to straighten out my account issues.
I began obsessively balancing my checkbook and couldn’t understand what was happening to my account. I was showing a positive balance and so was the bank yet I was being charged overdraft fees. It took about six months to figure out that the available balance was going negative and I was essentially being charged fees for an invisible number I couldn’t see or control, only the bank could access this number and it was going negative regularly due to my debit cards.
I spent so much time in the branch manager’s office that I knew all the staff on a first name basis and we were never happy to see each other.
I eventually cut up my debit card and used strictly cash from the teller so that I knew there would be no delay or issues. I eventually still overdrafted because of monthly fees being charged to my account (because I was no longer using my debit card, a stipulation for the account) as well as direct deposits not being made until noon (instead of at the bank’s opening) and causing the same effect.
I finally closed my account and due to that incurred more overdraft fees due to my direct deposits being returned and being charged fees for that.
The fees are ridiculous and I’m completely fed up with banks believing they can do whatever they want with my money. It doesn’t matter how much money it is, the fees should be based on the amount of money (i.e. risk) involved. A $2 charge is much more likely to be paid back than at $200 charge or a $500 charge and therefore there is less risk involved for the bank. Not to mention, why aren’t we, as humans allowed to have human errors? Sure some people abuse the system but not everyone should be penalized for that.
I eventually switched banks, demanded no overdraft protection whatsoever and have had no problems since. So now I know it’s not me but was the banks I was associating with.
I closed my account with Bank of America for the exact reason listed in the article. I transferred money from my savings to my checking to cover a check. I noticed that my overdraft protection had not kicked in and transferred funds automatically. So I did it myself. A few days later I was hit with the 35.00 fee. The reason, because I made the transfer and not them, causing me to lose my overdraft protection. (what!?!) This was the straw that broke the camels back for me, I had enough. I was a customer for 20 years.
My son who was doing 2 tours in Korea got slapped with and I don’t say this lightly,HUNDREDS of DOLLARS in overdraft fee’s and the bank (Bank of America) flat out refused to assist us. My son did not have the ability to see what was in his account 24/7. So i watched the accounts. But because of delays in posting he was continually getting hit with hundreds of dollars with OD Fees. I closed out all of his accounts with that bank and went to another. He did incur some there as he is in IRAQ and the shift with the military cards they use over there versus’ his debit card caused some confusion. This bank however bent over backwards to help out my son with the fee’s by reducing them and then applying protection from another one of his accounts even though its against bank policies. But in a nutshell, my son was out Hundreds of dollars because of the outrageous fee’s the bank charges and the loans they allegedly give to offset you going over your balance. Ive been whacked 35.00 for a under a dollar balance at onetime and again, the bank would not deal with me.
I bank at B of A and I get hit all the time with $35 fee and I have the funds deposited from a personal check they say won’t clear for 7 days. Overdraft fees I thing are one of their biggest $$ makers.
I have worked at a bank as a consultant in the IT organization, and I can say that overdraft fees are one of the major areas that they would look for that gives them a hefty return on what they actually have to pay out. They would often comment that they liked/encouraged the accounts that continued to hover near zero and would often go negative, thus allowing them to penalize them with a $35 per transaction fee. Making this an even more of a sure thing, they always processed the debits first before the credits. Even if there were a credit that could cover the transactions during the same processing cycle, the accounts would be allowed to go negative, triggering the penalties, and then the credit would be applied.
After getting caught in this myself a couple of times, I quickly learned that you have to watch your account on a daily basis, and ensure you have the funds physically in the account before you spend against it.
National City offers overdraft protection and overdraft protection from a linked account. Here’s the problem. Lets say you overdraft. They will pay it using your linked account and charge you $15.00 then you still get hit with a $35 over draft fee. That’s a total of $45 per overdraft. Talking about sticking it too you. I agree with the banks to a certain extent. You should know your balance, but at the same time if you make a deposit it should be there then and not 2 days from now.
Sometimes you can balance the account and still get hit by fees.
When you live paycheck to paycheck and they decide to pull thier annual fees or monthly fees or service fees and then they add the overlimit fee. You are in the whole and you did not write a check. Then you write a check MORE FEES.
I am glad you have $100.00 to sit iin the bank. For some people that is not possible.
And Credit unions are not much better. I had one put a 7 day hold on a check (as the law allows) but they did not do this for three days AFTER I deposited it – because that is how long it took the person to contact me and tell me they were putting the hold on it. When I complained i was told they are regulated by the state so while repsonsible to federal law there is no one to enforce it.
Yes this has happend to me but not very often. I banked at Rohm Haas Credit Union (Houston, TX) which merged with Johnson Space Center Credit Union (JSCCU) last month. Before the merger there was no fee to “AUTOMATICALLY” transfer your money from your savings to checking,that is why it is called “Overdraft PROTECTION” but that changed with JSC but it is only $2.00 per transfer. The only reason I am gripping is that the money in our overdraft savings isn’t going anywhere unless we draw it out, it is in there incase we would make an error in the checking. No matter how much you try their are circumstances beyond your control tht can come up such as travel for a funeral or hospital emergencies and so on. It isn’t like the teller is being paid to sit there at 12:00 a.m.or 24-7 & hand typing it in so you don’t bounce, it is done automatically. It is YOUR MONEY so why should you be charged for it to transfer when it is called OVERDRAFT PROTECTION. If there isn’t enough in the account to transfer…bounce it if there is you shouldn’t be charged for it.
A friend of mine works at a local branch of a large regional bank. She has been told not to inform customers that they have the right to turn off automatic overdraft protection unless they ask first. The reason…the fees are one of the banks primary sources of revenue.
Of course when the customers get stung with the charges it is her and the other branch staff (who have no control over any of this and no longer have any authority to make refunds because they were making too many!) that get yelled at by angry customers, not the crooks at head office that set the rules and the reap the rewards.
We do all our banking at a credit union. I would never use a regular bank for my day-to-day banking.
Please stop the blame game. Keep your bank account in order by not spending more than you have in the account, and you won’t have to worry about overdraft fees.
I think that the bank should not allow me to keep making debits when my account is in the negative. If i have made a mistake, i don’t even know about for several days, until i get the overdraft charges in the mail. By then i have just been debiting away! I am so glad that i am not the only one who has had a problem with this. I was just sick about it!!
I think it is outrageous to have your own money in your savings account specifically designed for overdraft protection and the Wachovia Banks charge you $10.00 to overdraft your own money!!!! Then you get charged by the checking account having the overdraft for $35.00. How rediculous is that. It seems banks are all obout how much money they can get out of the American people.
I just got slammed with 9 overdraft charges of $31 each for a total of $279!! Because of one mistake! And most of the debits were less than $20. I am also not happy with the online company that automatically renewed my subscription without any warning that my expiration time was approaching. They should have asked me if i wanted to renew instead of automatically withdrawing from my bank account. That was where the problem started.
I have absolutely been hit with these fees. There are times when it seems that a transaction conveniently–for the bank–comes through later than it normally would have if there’s a chance that it may cause an overdraft chain reaction.
I recently ended my banking relationship with Chase after five years because of their fee practices. I even called them to ask them to stop approving debit card purchases when it was going to overdraw my account. I basically asked them to embarrass me at the register rather than approving something that would overdraw me by a few cents and then slap me with a fee. The snide response I got from the customer service representative was that they couldn’t be responsible for monitoring my account for me. Hmm…they certainly manage to monitor it at the earliest second it could possibly go over its balance.
More than once I’ve had so many fees that it took half a paycheck at direct deposit to bring my account back from the negative.
I have recently been considering contacting my elected officials to voice my protest at such practices and see if I’d get a response or find out if there could possibly be any consumer recourse, so I’m glad to see that Congress is considering this.
It is not the banks “duty” to monitor your accounts and spending habits. If you don’t have funds or it “might be close” then you should not be writing checks and/or using your debit card. It is really as simple as that. I understand that mistakes happen but if you make the mistake then you should pay for it, not the bank.
That being said, a lot of banks are willing to work with you if you just talk to someone. They may not remove all the fees but will generally reduce it or set-up a protection plan for the future.
I believe that any bank should consider ALL THE ASSETS you have on account before they decide you are overdrawn. Many people have multiple savings or checking accounts. Why is it that a bank can hit you with a fee if you are overdrawn by $0.01 when you may have thousands of dollars sitting in other accounts?
SHEESH! How hard is it to have a bank computer add totals from all accounts before deciding that you need to be fined for overdrawing from one?
Do banks REALLY keep YOUR assests separate when they move the money upline? No, they group it together. So why then do they get to decide that ONE account is “overdrawn”? If you have money in other accounts, then you’re not barrowing from the bank!
ANYONE IN CONGRESS PAYING ATTENTION TO THIS?
I struggled with finances a great deal when I was in my mid twenties. During a particularly tight period I had overdrafts happen that got timed in a such a manner that I was smacked with several hundred dollars in over draft fees.
One of the things to keep in mind is that if you use your debit card as a credit card the charge will show up the day you make it but will dissapear the next day. This is because the merchant has yet to fully file the charge so the funds are not fully taken out of your account until sometimes a week or two later. It is this delay that is easy to forget, especially if you are living on very little money with small balances. That is what happened to me on several occassion and of course once you get feed, if you were in a situation as precarious as mine, the fees keep you from being able to pay the bills you were trying to pay and so you sink further and further into debt. I’m still dealing with the fallout of that period of my life today.
They always told me it was my responsibility to keep track of my spending – and I agree but it is their responsibility to be fair and balanced in how they charge and handle their customers. I mean I was charged 35 bucks for overdrafting by a buck or two at times. Here’s a fun scenerio similar to what would happen to me:
Week 1 – make small multiple charges on the card (a soda, a five dollar lunch, 10 bucks in groceries). That day you see them be subtracted from your account online.
Week 2 – those small charges are not present at the start of the week in your account. Deposit a paycheck. You buy groceries using your ATM card. The paycheck gets processed that night, (sometimes it would get held for a day too), but then those three charges reappear and get processed after the paycheck. So that night you’re purchase at the grocery store would go through, overdrafting your account, the three charges that you forgot about from the previous week go through, further overdrafting you and THEN the paycheck gets processed. (they always say to get direct deposite but not all employers offer that service, esp if you were treated as freelance as I was)
So on a day when you should be happy to have gotten paid and a fun trip to the grocery store you’ve been looking forward to for days – you end up with:
$140 fee. If your paycheck was just say $300 or so that means nearly half of the money you counted on living on for another week or two is gone.
It can feel like an endless cycle.
I agree with everyone posting here except the idiots who side with the banks. An ATM has a Mastercard or Visa logo on it and as such should be subject to a limit. Why does the bank approve more charges than what you have in the account? So they can RAPE you with overdraft fees. They tell you that you should keep track of how much you are spending but who does that after every little $3.49 transaction. The banks are the ones who keep close track of it so why do they keep approving charges when you have already spent your money? The banks need to be sued in a CLASS ACTION LAWSUIT to stop these unfair practices or there needs to be Federal legislation to fix it. Just changing the law to require that charges are cleared from the smallest to the largest would solve 90% of the problem. I HATE Wells Fargo!!
Banks forgot long ago that WE are the customer. They should be treating us like customers. Instead they treat us like we owe them something.
I quit using banks about 4 years ago. All my cash is in my home safe and a safety deposit box. About 80k total.
When I pulled my money out of the bank when they pushed me too far, THEN they wanted to treat me like a customer and begged for my business. It was too late at that point.
my band covers me up to $500 for overdraft, but charges me $25 for each transaction. Nothing like creating business for yourself. The galling part is that I have money in other accounts that could be transferred to cover the withdrawals, but I guess since the bank wouldn’t make money that way, they never thought of offering that as an option. Why not let customers authorize a specific amount that the banks can remove from one account to cover another. The banks could charge a one time fee for the transfer and then a fee for each transaction that exceeds the amount authorized to use.
a recent trip to nyc allowed me many, many opportunites to use my check card to make purchases. i bank with suntrust and check several times daily online (which is updated fairly accurately) and saw every single one of the purchases i made show up the same day as “pending” and keeping my balance positive all the way down to around $4.00. several days later my balance one morning shows up as several hundred dollars overdrawn. i knew that i never let my account go negative, so a long 4 hour call to the bank informs me about the “largest first” policy. the explanation i was given was that the largest transaction (around $135) was posted as pending, then all other transactions posted, but then, and you can tell me how this is legal, they made ANOTHER charge of $135, claiming it to be the actual payment for the transaction, while continuing to list the same amount as the original “pending” request ON THE SAME TRANSACTION. keep in mind this is several days after. this of course made my balance below 0, overdraft charge, then credit the “pending” charge back to my account. because of this and the overdraft charge, my perceived balance in my account was actually 35 lower than it was. so transactions i placed on monday and tuesday were then “paid” with another overdraft charge, totalling a few hundred in the hole.
when i inquired as to why this wasn’t charging me twice for the same transaction, the bank claimed that they have “no control” over the “visa” network and they only “hold” the funds from your account for 3 days, awaiting the actual retailers bank to come to your bank for the payment. i complained for days and days, several times a day. left numerous messages for “execs” in the company, and mysteriously one morning, all the charges reversed, overdraft charges dissapeared, and dates changed on my online statement. very frustrating but the same policies exist at every single other bank. i was originally with a small hometown bank, that was bought by suntrust.
My husband’s bank charges over $30 for any overdraft. What’s worse is that we have realized that they also re-order the charges to always take out the largest one from the day or weekend first. So you are more likely to hit the $0 amount and rack up the overdraft fees!
i went over for 1 day. used my card 5 times totaling less than $50. was charged over $250 in fees. I hate banks.
“1st Bank”. Beware.
My first year of law school I received my student loan check and immediately deposited it into my checking account. The man stated the check would not go through for 7 days. The next week (about 5 days later), I called to check my account and the recording stated the money was there. I then went and purchased about $1000 worth of books. Immediately, I began receiving overdraft charges that eventually amounted to over $500 in fees. The bank stated it was my fault, but did credit me half of the fees.
I have been hit with this overdraft fee many times, and every time it for an amount way smaller then the overdraft fee is. I have complained many times to my bank about this problem and there is nothign they will do about it. The over draft fee is WAY to high! I’m actually in the middle of switching banks because of this problem.
With my first couple of debit cards, one of the great things about them was you COULDN’T overdraw your account. If you didn’t have the funs, the transaction was automatically denied. It was FABULOUS. I stopped carrying cash around; I could just use the card, and when the money wasn’t there (if I made a mistake in my book-keeping), I simply couldn’t buy anything else.
Now, they go ahead and let you overdraw, and slap you with a fee. I went back to my checkbook and register, where I record everything immediately and assume the money is gone the minute the check is written. Then I balance everything up with my end-of-the-month statement. Just like in the old days.
And the debit card has gone the way of my credit cards. Emergencies only. After all, its now no more than a “secured” credit card- with horrendous fees.
Bank of America’ highest to lowest has cost me so much money when it didn’t have to. They are extorting money from people who don’t have a big balance with their bank and they reverse all the OD fees to their customers who have large balances in some of their accounts (Yes the rich OD too, but they get all their fees reversed). Banks are stealing my money with OD fees and I am sick of it.
They say everything is updated right away with online banking and all, but it takes days to clear a check. They just say something is “pending” just to steal from their customers. It is ridiculous to charge $35 to “loan” your customer $4 for a transaction!!!
I think banks should pay back their customers for all their unfair charges.
A couple of months ago my husband wrote a large check to his church. It was a special contribution. They were suppose to hold the check until the following week and then put it through. Well the church treasurer mistakenly included everyone’s check when they specifically said don’t worry we won’t put your check through until next week. The checks were even post dated. We got hit with over $1000.00 in overdraft fees. The checks were returned and put through again which accounted for the huge overdraft fees. The church spoke to the bank which returned 50% and the church paid us back the rest. My husband felt back because it was like he didn’t make much of a contribution but like I told him it wasn’t his fault.
I have nothing new to add, except to add my voice to the displeasure expressed here. My wife and I (along with two children) struggle to make ends meet, even with 3 total jobs. A simple mistake, an error in calculating how much is available in the bank so we could buy milk ended up costing us $350 dollars through cascading fees and penalties from Wells Fargo. Criminal does not describe it. A flat out denial at the register would have alerted us that something was wrong, and we could have solved the problem before it escalated.
Bank of America’s favorite tactic is to hold smaller charges until a large check or debit comes through. Then they process the charges out of order to create 4 or 5 overdrafts where there should have only been one. There was a class-action lawsuit over this several years ago but I’ve noticed they are now back into that practice.
FYI for having identity theft – when this occurs, the bank is responsible for removing OD charges when you give them your police case number. Talk to your bank’s fraud department, and they should be willing to assist with this.
I was charged with multiple overdraft fees which I STILL don’t understand because at no point was my balance ever below zero. The bank waived two of the charges, but not the others. I am not irresponsible with my accounts as others here seem to believe you must be in order to be subjected this!
Here is the biggest scam by the Bank of America. I signed up for automatic alert on my email that shows what the balance of one of my accounts is by sendingme an email every morning. After checking the balance I thought I had enough to purchase a small toy for my son from that account, plus a few other items. The toal amount from that account I spent was less than $16 in 7 transactions. The next day I realized I was hit with 7@ $35 fees (You can do the math). When I asked the bank customer service rep why they send me wrong information, he said I should keep notes of my spendings since the bank balance not have been updated. Isn’t the online banking a part of the services they provide? What good does it do when it doesn’t give you the right info? Should they not be liable for their late update of our account information since they “SAY” they provide online banking services? I am a Canadian citizen and in Canada this is illegal. I have no idea why it’s not in the US and I think they are committing a fraud.
This is an actual line from my bank statement last month: OVERDRAFT/UNAVAILABLE FUNDS FEE $280.00
How much did I go over? $10.79 To say that I am sickened would be the understatement of the year.
I was with AmSouth (Now Regions) and being a college kid, used the online banking to check my balance before making purchases. One time, I went negative and didn’t know it because the number showed up as (56) parens meaning negative. So I thought I had $56.00 in there. AmSouth continued to let me make purchases for 3 days, even letting me DRAW money from the ATM and charging me for it. By the time I figured it out, I owed AmSouth over $100.00 in overdraft fees (which they refused to waive). Well I learned my lesson and switched banks after that. Overdraft “protection” is a scam, and I’ll NEVER bank with AmSouth (Regions) again!
I had 7 items come in to the bank…6 very small ones and one for over $100. The small ones came first, then the large one. If my bank had taken them out in order I would have paid for one overdraft. They took out the the large one first. As a result I was charged $35 for each of six small charges…some as small as $6. When I asked them why they didn’t do them in order they said it was for my benefit. As a result I was charged $35 six times or $210…I was robbed.
Overdraft fees by TCF Bank in Michigan have cost me dearly!
In one year, during which time I lost my business, was trying to keep my house out of foreclosure, and began working two jobs to make ends meet, TCF Bank charged me a total of $1,300 in overdraft fees. I felt like I was dealing with professional loan sharks!
This is how TCF Bank scams their customers: when a check appears for payment, they immediately process it. If funds are insufficient, a letter is mailed via the post office notifying you of the problem — which can take up to one week’s time. The bank then immediately charges your account a NSF fee of $35 for each check submitted for payment, and resubmits the check for payment again — which triggers another NSF charge. In a matter of just hours you can incur hundreds of dollars of NSF charges if the timing of a batch of bills and a direct deposit paycheck is not perfect!
Despite my requests TCF Bank would not
notify me of insufficient funds in any other manner than snail mail — obviously this method was far too lucrative for them.
SHAME ON YOU TCF BANK!!!
I once accidentally went below zero $ in my account and got walloped with overdraft fees. I was a poor student and was very low on money and had forgotten that I had taken $20 out of the bank maybe a week before my incident occurred. At the time, I did not check my balance as often as I do now. While I thought I had maybe $23 in my account, I only had $3. I went to Subway for lunch one day and put a $6 sub on my debit card. Well, this put me below $0. Over the course of the next eleven (11) days, Keybank hit me with four overdraft fees of anywhere from $25 to $35. My sub ended up costing me about $127. I don’t remember if it tasted that good though. Needless to say, I check my account balances a lot more often and try hard to keep a little extra in the bank for just such an emergency/accident.
David
My first question is:
Why did the funds not clear on the same day if it was in the SAME bank? Why should they have to pay an OD fee when the funds, which were available, were transferred to another account in the same bank? That’s highway robbery, and should be against the law.
I concede that we need to be aware of our account balances – and they were. If I do make a mistake, and the bank covers my mistake, then I will pay an OD fee. If they do NOT cover my mistake, why should I pay an OD fee? All they did was deny what I paid for, therefore I owe the bank MORE money (which I would theoretically not have, causing the bounce in the first place) for doing nothing, as well as owing the institution the amount due for my purchase, and possibly check-rite fee etc. etc. Banks are essentially doing the same thing that these short-term loan scans are doing, and that’s preying on people living paycheck to paycheck, and causing a vicious cycle that’s extremely difficult to get out of. There are laws coming about to protect consumers from these short-term loans, banks should be a part of that too.
PNC bank offers overdraft protection to students but they do not tell you that if your savings account doesnt have enough money to cover the shortfall of the overdraft, you can still use your atm card to withdraw money you don’t have. You do not receive an alert telling you that you have not money available. Then you get slapped with the 35.00 fees and 6.00 for everyday after.
You are better off not using overdraft protection if you can’t have a sizable amount in your savings account.
I was sitting at lunch today with my friend when she logged onto her account with Compass to check her status. They had automatically drafted $25 from her checking account to her savings account, which she was unaware of. The previous day, she had put in a $1000 check and then spent a total of $1.33 on two separate transactions.
The check was still pending, but because of the draft and her $1.33 transactions, she was hit by two overdraft fees, each $38. Her $1.33 in the negative cost her $76 in overdraft fees.
If that isn’t unfair banking practices, then I don’t know what is.
Why does the government need to regulate what fees banks can charge? If you don’t like it, take your money elsewhere. You don’t fix things by expecting everyone else to take care of your problem. Stop living week to week and exercise your right to choose. If we keep expecting the government to regulate everything, we will no longer have that right.
I’ve had the same thing where the bank would put through the big checks first and then the smaller checks so I would be hit with more overdraft charges. Once it was my insurance that accidentally took out too much money and I was with with $120 in overdraft fees. Had the bank put through the smaller checks first it would have been $20. I complained and got most my money back but it seems really greedy.
The banks have found more ways to trap people who opt for debit cards instead of credit cards with such practices. They have also mustered the art of giving customers information that is not documented anywhere and calling it “the manager’s discretion”. They must be held accountable.
I am a former bank employee. What gets me is that when you have direct deposit and they can see that your pay check is pending, they still return your checks and charge you a 35.00 bank fee. I am currently with Wachovia and I feel the same way. It is a RIP OFF and it is time that the something is done about it.
What a money maker this is for the banks. National City Bank comes to mind. I was told when I called, that it didn’t matter who I talked to in their organization, they (the bank) would NOT refund ANY fees. The fees were 10 times more than the transactions made. I was also told that it is up to the bank to decide to pay a transaction..at $29 to $35 a pop I wonder how they will decide? To keep approving transactions knowing full well there is no money in the account, then charging a fee for each, borders on theft. Or, maybe it is theft!!
Worked in a bank once. Banks may pay presented checks or withdrawals in any order. That’s the law. For years it was standard to pay the smallest check first. This would use the customers funds to the fullest and only leave truely overdraft checks as unpaid. Then a decison was made to either return the check or pay into overdraft. Fees would then apply to the returned or overdrawn check. Then the hometown bank was sold and the new owner determined a better way to make more money. Pay the checks in number order. If you had a balance of $200 and four checks came in, # 123 for $50, # 124 for $100, #125 for $60 and # 122 for $180: They would pay the $180 first leaving a balance of $20. Then charge an NSF or overdraft fee on the other 3. This resulted in 3 times the fee income on that account that day alone. Then they offered for a monthly fee, overdraft protection as Security. It was sock it to the customer time. Any customer that pasted a “CheckSystems” background check got the monthly fee waived and $200 of overdraft protection. Fees jumped 10 fold. Then came the debit cards and electroic presentment of paper checks. Merchants would swipe the cards and place a pending “HOLD” on the account. If account customers didn’t look close at ATM receipts or statements they would become confused about having a higher balance than they actually did…and spend more, creating additional overdrafts. Customers were real quite. They didn’t like the high fees, but were ashamed to come forward and complain, putting too much attention on the fact that they didn’t have enough money to start with. Greed for the dollar folks. Banks have been ripping off customers for years. Their thinking; it prevents a customer’s check from being bounced! True. And what is the customer willing to pay to get this done? And if you loose the account for charging high fees…well it was a small balance account anyway. The people that comprised your best depositors didn’t have overdafts. AND just in case they did….you paid their checks and didn’t charge them. Of course, no one forced the customer to overspend. The bank is just doing them a service for a fee. Even the smartest hungry rabit will chase a carrot out of the briar patch. Real Security ? Right.
While waiting the usual 3 days for a deposit to go through, I made a debit purchase of $21.00, then two for 99 cents each. My bank charged me for 3 overdrafts at a total of $105.00. What shocked me most was that if they had run both 99 cent transactions first, then the $21.00 charge, I would have only incurred one overdraft charge at $35.00. I like the way they manage my account to make the biggest profit possible.
PS The same bank accidently deposited the same $730.00 check into my account 3 times so I’m not complaining.
I have to have an account because my job requires direct deposit. So I opened an account with US Bank. They charge me $37 a day for an overdrawn account. And yet the state of Ohio is worried about payday lending companies taking advantage of people!!
Chase is horrible when it comes to this. My daughter went and signed up with them. Instead of sending her the debit card as stated, they sent her a credit card. She didn’t realize it until she used. Caught and went to make a payment. She accidently made one number wrong and they charged her a fee for it. She went and had it “corrected” until the next statement – the fee was on there plus another fee for not paying the first fee. And then this last time trying to clear that up, the CLERK accidently took money from her savings instead of the her checking account to pay the bill and caused her to overdraft. And now they are charging her $25 for that as well.
One question: With all of the money that banks are collecting from overdraft fees and other ridiculous charges, how are they still going out of business. Shady lending practices perhaps? Why are we paying the price for their mistakes?
I am a banker at a corporate retailer, and banks have now started charging overdraft fees on customer’s available balance rather than transactions that have actually posted to the customer’s account. In other words, if you buy a cup of coffee, and it shows up as a pending transaction to your account, the bank still has the money on hand; they have not remitted it to the retailer yet, however, they still charge the customer the overdraft fee because they deduct this from the available balance. So they are charging you for money they still have. This is illegal! Many of the larger banks including Bank of America, Regions and Wachovia have all begun this practice, and more are catching on.
I have had some of these charges, but one in particular happened when even though I made a cash deposit with a teller, specifically told her I wanted the funds to be available right away, she informed me that I no longer need to make that request. Guess who was hit with an overdraft charge (later reversed when I proved the bank’s error)? B of A strikes again (similar theme throughout these comments), this time in downtown Salem MA. For a few months, I would purchase money orders and cashiers checks from their branch in Brookline MA (Coolidge Corner) and the Salem branch. Never did they charge me a fee. All of a sudden, the Salem branch started charging me. When I questioned, the lame excuse was that someone at the other branch was “doing me a favor”. Even though I indicated I would go to different tellers, this even happened at the Salem branch. This bank should close up shop. They should be taken over by Washington Mutual or a credit union.
In one day I racked up over 200 dollars in overdraft fees with Bank of America on about 20 dollars of purchases.
I went in to complain about what I considered unwarranted temporary loans and they reimbursed me the overdraft fees. Thanks. I had a savings account that was suppose to protect against overdraft but because it wasn’t opened in the same state as my checking account it wasn’t able to cover temporary insufficient funds. They informed me of this post infraction. BOA is sneaky, so beware.
I also have Bank of America and they are terrible. I overdrew my account onceby a penny (really!) and got $35 in fees. Seriously. I understand that getting hit with an overdraft fee is better than getting the check returned or reporting it on your credit like you’re some kind of villan, but it should be a PERCENTAGE of the amount because the fee implies that they have to “work” to keep the acount open and pay that check from their money to cover you. I don’t think they had to “work” too hard to cover the penny.
Also, even though they state that every time you swipe your card the money comes out of your account “immediately”, they put it on a “pending” status and they take up to 5 days to actually take out the money. So, you are shown a balance that is missing the amount you just “swiped” but they don’t really take it out and you could end up with MANY overdraft charges because they honor a check before they honor their OWN Debit transactions. So beware.
I had a emergency and KNEW there was a good chance that my account would be short about $50, if they cashed a check before my next payday, but they honored the check and charged me for the 4-5 other debit charges that I thought was already deducted from my account days earlier. So they basically charged me $35 x 5 for 1 check. They pick and choose what to honor so they can make the most $$ off of you. AND they know how to double talk you into thinking they are right and they are doing SO MUCH for the customer. Arguing with them gets you nowhere, they have an answer for everything and I’m glad that Congress is FINALLY starting to take notice that many Americans are victims of EXTORTION from their banks. In the 21st century, we cannot live without banks (unfortunately) but Americans should not be forced to pay extortionary fees and be subject to ever-changing rules that are NOT laid out in “PLAIN ENGLISH”, because that is an even bigger drain on the economy than $4 gas!!
I’m generally a responsible person, but am not absent from having an occasional error with spending. Considering how the economy/market are performing at this time, it seems silly to me that if you overdraw your account by $ 1.00, a bank can charge you an erronious fee of anywhere between $ 20.00 – $ 35.00. I thought the idea was to keep more money in a consumers pocket? Dont banks make enough money in interest? Here’s a question: what does the overdraft fee pay for, and where does it go?
I used to bank with wachovia until i made a purchase while a deposit was in pending and the purchase amount went through before the deposit and i was charged $35 insufficient funds fee and a $35 overdraft fee ($70) for one overdraft when the deposit was more than twice the purchase amount.
The elderly, like my mother, who lives on Social Security and a PT job, was hit for $150-$175 one month by the bank making it more difficult for her to make ends meet the next month. I had to pay the fees just to get her caught up. Banks keep looking for ways to increase profit in order to look good on paper and make their shareholders happy. I heard on NPR that overdraft fees put 6 billion in the pockets of the bank last year.
My Credit Union gives me a $5,000 automatic line of credit against my checking account. Yes, the 18% interest rate is on the high side but it’s a great deal compared to a payday loan!
I never have to worry about overdrafts, at least on my checking account. I use my credit cards carefully; that along with a high credit limit also lets me avoid credit card over limit fees.
Switch to a credit union and nearly all of those nickel-and-dime-you-to-death charges and fees vanish.
The charge for an “overdraft” is the same amount as a “return check” charge. The difference is, if the bank returns the check you will likely incur additional charges from the store where you bounced the check. So, would you rather have one overdraft fee of $25 or a return check fee of $25 plus another $15 or $20 from the store where you bounced the check? You may also risk criminal charges for bouncing the check if the store wants to get ugly about it.
Wachovia is just like Bank Of America. They have made a thousand of off me, That is because they have up to 7 days to post “OD” fees or “NSF” fees, Yes it is my fault for overdrawing but my situation is very similar to ALOT of these stories posted here. Clear the big item first, so we can jack you $35 a pop for all of the little items. I am finally closing my accounts – all 6 of them and just using Pre-Paid Debit cards, no od fees, I HATE WACHOVIA!!! #1 in cust satisfaction my A$$!
Nearly every paycheck…I’ve noticed also that the banks will go from highest dollar amount to lowest, regardless of
Wow, I didn’t realize how many people are getting the same excuse of “It could be a mortgage or car loan, wouldn’t you rather we make sure that is paid?”
The truth is, since it is overdraft protection they will pay it no matter what order they debit your account. That basically pushes that entire ‘mortgage / car’ defense out the the window.
I once asked them to give me the exact times of the debits so they could justify their timing. They couldn’t, and they refunded the fees.
Bank of America has cost me hundreds this year. Don’t get me wrong, I don’t expect to buy things for free-I expect for my debit purchases to be declined if there are insufficient funds in my account. I speak for others, but if I try to make a purchase with a debit card- or credit card for that matter- then it’s because I know there are enough funds in my account to cover the purchase.
Often BoA’s phone system AND their website show the debit purchases I have made in the order I make them and then hours later their website shows my debit purchases listed in a different order. Then is there a $35 overdraft fee one day later.
I plan to print out the screen shots of my account while I’m viewing it online, that why I can prove how they adjust my account to justify an overdraft fee.
Wow. Whoever wrote this article has no idea how debit/credit cards work, and why overdraft fees will be unavoidable until customers go back to managing their own balance. Terribly irresponsible article.
It’s pretty simple to avoid overdraft fees. Make sure you have the money in the account before you spend it. Self accountability solves many problems.
My husband bought something at a gas station yesterday for $2.97 and we got hit with a $34.00 overdraft fee! It’s ridiculous what banks can get away with.
Banks are just out to rip people off just like every other business out there. Credit card companies, car dealers, just about every company is out to take all they can. I bank with Landmark. They can take your money out automatically, but they refuse to put your money in. Why? Because they can hit you with that overdraft protection. Just like they take out any pending transactions before they put in any deposits. This should be illegal. Your money is sitting there waiting to be deposited, but they refuse to put it in and take out your pending transactions first, then they hit you with an overdraft charge for every check or debit card transaction. Why doesn’t the government step in and regulate this? They’re probably getting a kickback just like they’re getting a kickback from all the gas companies. So, as a consumer, we’re just screwed all around.
I’ve been hit with overdraw fees many many times. This bill needs to pass because the overdraft protection system is incredably unfair and a typical cheap scam
Wachovia leads the pack in charging obscene fees! I just closed my acct with them after being an account holder for 16 years! They don’t even give you an option to opt out of ODP!! Even if you over draw a penny, they charge you $35!!
Bank of America is by far the worst when it comes to fees. I changed banks to a credit union looking for relief from $35 fees. My husband and I were hit with over $300 worth of fees for PENDING transactions that hadn’t even officially posted to our account. Deposits were made on the same day but it didn’t matter. Supposedly they changed their policies and sent out a notice in March…probably 5 pt fine print at the bottom of your e-statement that you never read.
As I read some of the other comments before mine, I see many of these people have had the same problem with BOA in particular. It should be illegal for them to make money off of people this way. CAN YOU SAY CLASS ACTION LAWSUIT? ANY LAWYERS OUT THERE WANT TO GET IN ON THIS?
Then when I called in to talk to customer service about it, they had the audacity to tell me that in today’s economy the bank had to make this change in order to stay in business. Then 3 days later I see a report on the web stating that BOA’s earnings were dramatically up!!!!!!
I get so fired up just thinking about all of this again. In summary, I am in 100% support of a class action lawsuit against BOA for their fee policies. I’m sure I wouldn’t be the only one.
Bank of America’s policy for clearing multiple debits in a day: rather than clearing in the order received, they will extract the largest debit first. So let’s say you’ve got $500 in your account; you make debits for $5, $20, $60, $13, $9, and $450, in that order. BofA will post the $450 first, which will clear just fine. Then they’ll post the $60, so you’ll be NSF and they hit you with a $35 overdraft. You are now $45 overdrawn. Then they post the $20, $13, $9, and $5 transactions, with a $35 overdraft fee on each one. Your total today? $175 in overdraft fees. If they had posted the debits in order received, you would have been hit once, not 5 times. Oddly, they won’t even necessarily honor the debit; they might just charge the overdraft fee for their trouble.
Yes, as a matter of fact, this is the voice of experience. After they pulled that little stunt I closed my account and regularly encourage others to show BofA the door.
I have closed two bank accounts after racking up over $400.00 in overdraft fees. Credit card companies do something similarly shady, too.
Frank Solomn’s quote is technically correct. (”In most cases, banking customers can avoid overdrafting their accounts and paying any associated fee by knowing their balances.”)
However, there are two problems: 1. Constant awareness of account balance at any given second throughout a multi-transaction day is a little like knowing your speed limit to the mile at any given second you’re driving. You have an idea, if not always an exact one. The banks know this and profit handsomely from that margin of error.
2. Financial institutions complacently maintain out-of-sync balance records and transaction practices as it suits them–if they don’t deliberately program it that way outright. ATM slip may differ from online may differ from phone. While Mr. Read’s $400.00 was most certainly automatically removed from his account, Mrs. Read’s $400.00 was most certainly NOT deposited to her account at the same rate of automation. I once deposited a payroll check into a Washington Mutual account that had a $2 balance, and made a $3 e-bay transaction approximately 2 hours later. WaMu instantaneously cleared the e-bay transaction to the hefty fee of $36.00 but of course delayed the check deposit 2-5 business days.
Merchant-Credit card transactions work similarly. Upon swiping my HBC credit card for a Saturday night stay at one hotel, the hotel instantaneously “held” 2 nights charge, effectively preventing my access to the little spending money I had for Sunday. (I was not notified ahead of time of this practice, of course; I had to be denied at a cash register on Sunday and call the credit card company to ask why. Then I looked at the tiny print on my hotel receipt and lo and behold…) I discovered over the next several days that when a merchant swipes your card, what actually happens is the merchant’s bank ‘asks’ your credit card company if you have the X amount of dollars available. When your cc company says ‘yes’, there is apparently an instantaneous order to also FREEZE that amount. This is usually not a problem, as most “freeze” amounts match the amount you were ‘paying’ at the cash register. Then, supposedly by midnight on the day of the transaction (or on the day of checkout in the case of hotels) the actual dollar amount is requested by that merchant. At the same time (supposedly), the order to release the ‘frozen’ amount is then issued…Which…Could…Take…Days. So what happens when a merchant, especially unbeknownst to you, freezes double or triple the amount of a transaction, as in the case of hotels and gas stations? If you’re a millionaire high-credit-limit Lucker, it’s no biggie. But for a small-time, low middle class person like me, that is a really big deal. I may afford and budget a stated amount but not the extra ‘freezing’. And WHY DOES THE REQUEST FOR ACTUAL FUNDS NOT INSTANTANEOUSLY RESULT IN THE RELEASE OF EXCESS FROZEN FUNDS when THE REQUEST FOR FUND AVAILABILITY DOES RESULT IN INSTANTANEOUS FREEZING?
I deposited CASH. CASH. Not a check, not a money order, or a cashier’s check, but CASH, and it sat pending for almost a week, before they finally cleared it. Cash is cash. You can see it, it’s tangible, it can’t be duplicated by the general consumer. (I know that it can and has, I just mean that you can’t duplicate money the same way you can a check) Because that sat pending for that long, I got hit with about 14 overdraft charges. I deposited the money in the branch office, on a Tuesday morning. Friday, Saturday, Sunday and Monday are all considered one big bank day. I thought that because I had deposited cash, that the money would have been available immediately. I don’t like carrying a lot of cash, so the debit card works great for me. After hearing some of these stories, I will NEVER bank with Bank of America. Or Wachovia. I don’t spend what I don’t have. I used to, but that is why I am so careful now. I watch my account like a hawk, checking the statement every month, and checking the online balance. Just remember, that when it says available balance, that doesn’t really mean that it’s all available.
My husband & I had this problem with BofA a couple of months ago. We lost over $300 dollars because of overdraft fees in one week. I made five cash deposits that week, that they held as pending for more than a day (each time). The first day I balanced our checkbook and saw that we were going to be a little short (granted our acct had plenty of money). So I deposited enough CASH to cover the neg. balance, as well as, $200.00 extra. The next day I check again, and we were hit with 5 OD fees, because they backdated the charges to when the purchase was made, not when they had to paid the charges. I confirmed with a rep that if I had $100 in the bank, went to the grocery store, spent $105 and then immediately went to the bank and deposited $5 or more, I would still get an OD fee, because they go by the date & time. For all those who lecture about maintaining your checkbook, you either do not have a joint accout or you have a very well-trained spouse who calls you immediately after they make a purchase, so that you can drop everything and balance your checkbook.
My son recently got slammed with 4 times $30 overdraft fees ($120 total) within a couple of days. We had set him up with a savings account at our credit union when he was 5 or 6. After he turned 17, they offered him a checking account and he set one up without telling us. Of course, he was happy to get a debit card and started using it as if it was free money. There were 2-3 days when he charged multiple times without realizing that he had run out of cash, and they got him. Did he read any fine print? I doubt it. I would have.
This happened to me in 2003. I was out of town on business so I didn’t get any notice till about 3-4 after. I used my debit card over 10 times in that period. At $34 a pop, it hurt, it hurt alot. I told all my friends and family when my bank wouldn’t remove those fee’s and none of them are doing business with them. My new bank now extends a line of credit an a fixed APR up to $1000.00 so that when I over draft now it only costs me pennies in interest for those couple of days I’m absent minded. Its a life saver.
Bank of Oklahoma charged my 18 year old on 48.00 becasue he charged 2 coffees in one day. It showed a balance of .90 so he did not use it,,but the coffees were charged two days before but had not yet come thru,,he thought it was more in real time,,and was unaware of the automatic overdraft thing,,he thought it should just been declined if there was not enought money in it.,,,but now he has learned the bank is out to fleece him..not help him with his money, BOK is NOT OK to him anymore.
I have never had an overdraft fee. i have Citibank and have a line of credit linked to my account. The interest is at 18% but if I pay it off within a day or two i am not even charged interest.
i was hit with about 7 overdraft fees when my friend came back on leave before being deployed. i was so busy i didn’t rush my paycheck in, trying to spend some quality time with a loved one. by the time it was all said and done with i spent about 300 dollars on overdraft fees and used a much of my next paycheck just to pay for fees… the charges that got me there were 7-10 dollar interactions. if its a democrat pushing this bill i will be sure to vote for my financial protection. the bank in question would not take me out of their overdraft plan
I do not mind paying the fee if it is my legit mistake. I have had banks and credit card companies post the debits first and your deposits and payments last even if the credits were received hours before the debits. By doing that is puts the accounts over when they had the money on had to cover everything.
The industry has had entire too much freedom to manipulate the laws to screw the consumer every way they can for sake of a profit over showing value and appreciation to their customer base.
I worked at one of the top credit card companies and watched them scour the laws and regulations for loop holes to maximize their profits.
These courtesy pay programs are useful tools, if used prudently. Don’t want to pay fees? Balance your checkbook; don’t spend a penny that you don’t have. Can’t agree more with Josh of SD (12:32 posting). I can’t believe how many people think of banks as thieves. Never occured to them that they caused the problems to begin with. As for the specific example in the article, I’m sure a reasonable bank manager that you’d talk to about a fee waiver will agree to reverse it without the customer having to jump through hoops. I bank with a credit union and their folks are genereally easier to talk to and more accessible than those at the big banks. But if you abuse your account anyway, doesn’t matter whether it’s a credit union or a bank – both will hit you with overdraft fees.
Damn, I hope that something can be done about this. Reading through all of these Talkback posts is like reliving all of the crap I have been through with my banks (WF and BoA) over the past few years. I’ve had the exact same experiences as most of you.
The whole of the overdraft protection concept is a money making scheme for banks, plain and simple, I’ve had a rep for one of my banks tell me as much. It’s all a big joke and the only thing you can do is be really, really careful with managing your account, or they will gouge you. What makes it even tougher is the way merchants handle transactions. Sometimes they don’t post them for days. And what makes it even more frustrating is when you get hit with a charge by some business on accident and it overdraws your account. Good luck finding justice on that deal.
Just for the record, I’d like to say that most bank branch employees are jokes. $10/hr goofballs that don’t seem to know squat about banking and even less about customer service (I’m looking squarely at you, BoF on Westheimer just inside the Beltway in Houston). I went in to that branch to get some assistance that amounted to sitting in an office for 30 minutes with a ‘banker’ while she called the 1-800 number…what a joke.
I just had a problem today with Amplify. I had scheduled an electronic funds transfer for $250. I have three accounts at the bank. Two with in excess of 5k in them and one with only $44. All three accounts have the same account NUMBER and are differentiated by different NAMES like “S1″, “S20″, “s7″, etc… The people who set up the EFT just put the account number and didn’t specify the account name. Amplify then defaulted to the one account with insufficient funds and charged me a $30 fee.
I’ve been hit with these in the past. I overdrew my account and made a cash deposit to cover the overdraft via an atm that same day. the deposit didn’t clear until the next day and I was hit with an overdraft fee of $65 (Chase). Which again over drew my account. Thankfully I had a direct deposit paycheck coming at midnight so I thought I was ok…I wasn’t and was hit with an additional $65 overdraft fee. $130 Total in fees for originally overdrawing my account my $40.
I bank with TD BANKNORTH and called them yesterday to ask for no overdraft protection, as I find I am constantly charged a fee for items that are pending (such as authorizations). They said there is not an option for overdraft removal.
I deposited in my paycheck in the bank on a Saturday and then used my debit card for several small purchases over the weekend. (13 purchases totaling about $70) On Monday I learned that the bank doesn’t consider Saturday to be a business day and they didn’t put my check in the account until Monday. Then they happily dinged me with $396 in overdraft fees.
Not only are these fees crazy, but there are other fees as well that banks are going insane about.
In order to make ends meet, I got a part-time job recently. My second employer pays me by a check drawn on Chase Bank. In order to avoid the scam of my bank, a small credit union putting a five-day hold on the check, I decided to cash it at the bank it was drawn on.
Because I didn’t have an account at Chase Bank, they charged me $5.00 to cash a $150.00 check. Isn’t a check an authorization for the bank to give me money from that person’s account?
I can understand taking precautions regarding theft and all when you personally cash a check at someone else’s bank, but come on. Are they going to start charging me a fee when the check clears in the standard way?
I am a young woman who has had 4 accounts closed in the last year because of overdraft fees!!!! They wont end…Postings arent accurate and recently I took a loan and they keep debiting my account that’s already negative so guess what I have lost over 1000 dollars in two months over NSF. I hate..what can I do?
I have been hit by overdraft fees various times similar to the various descriptions by other folks. The usual set of trickery by processing bigger charges first so more charges are rejected, etc. Now I moved my account to a credit union that allows you to opt out meaning the charges are rejected if there are insufficient funds. My general suggestion is to vote with your feet and your money and abandon any bank that abuses you.
Regarding a few comments I read here where it is clarifies that these are “penalties”, shame on you (probably a banker) because the bank can reject the charge and then there are no penalties HOWEVER, the banks process the charges and then assess the penalty. Besides, even if the bank provides a “loan” a penalty/fee of several hundred percent of the loan is clearly out of line.
How come the banks don’t give us interest when transferred money disappears for days (because outdated laws allow them to keep the money for that long and that is a FREE loan from the customers, that is why) and why the bankers are not stern on this as they are with the customers (”…why do you think you are entitled to a free loan..” comments one)
TD Banknorth screwed me with an overdraft fee a few years ago and I couldn’t have been more pissed. It was highway robbery to say the least: They decided to deduct a check I’d written BEFORE including my deposit, both of which cleared on the SAME DAY. So basically they looked at my situation and said “hey, we could screw this guy outta some money if we fool around with the order of his deposits and withdrawals”.
I have been hit more than once on the same day because of the paycheck going in in the p.m. The fee is absolutely too much!
Harris Bank in Illinois is the worst at Fee charging. They loose long term customers all the time with ther fee’s
overdraft fees are setup to hurt the poor. My bank has different fee amounts based on how much they have in the bank. Seems to me, a millionaire bouncing a check for $1k (and emptying their lucrative account!) gets billed $0 while everyone else pays $35 fee for going $5 over. Seems it should be the other way around.
Just today I checked my bank before making a deposit. $23.44 over four transaction at $35 each. That’s $140, ouch. This is WaMu, they are pretty good about refunding at least 2 of the charges in these cases though.
One of my favorites was with Wachovia. I had monthly automatic transfer setup to move $20 a month from my checking account to my savings account. When the funds were insufficient in the checking account to cover this $20 transfer, they attempted to use the savings account they were transferring the funds to to cover the transfer. When the funds were insufficient there as well, they charged a $35 overdraft fee because of a failed transfer from my own checking account to my own savings account. To me it’s one thing if you use your debit card and do not keep track of your balance but to charge a $35 penalty on a transfer between two of my own account is outrageous.
We are bank shopping right now. Our new bank which we thought would be a good bank charged us $39 x 4 = $156 for 4 transactions that were under $12. Where we had our accounts before we would have had 1 charge since they went through in the same day. I also deposited money from another account to cover and they still charged the overdraft fees, even though our account shows we never went into the negative. We still had a positive balance until the overdraft fees were taken out. I would not recommend banking at First Midwest Bank in Illinois.
If you can manage not to use it, I recommend getting a personal service line-of-credit as an overdraft protection. That way, you can have more protection than you might have in your savings account, and the interest you pay for the few days until you pay it off is minimal compared to an overdraft fee. You just have to make sure you pay it off as soon as you can transfer funds from somewhere else, because PSLs often have relatively high interest rates.
Oh, and join a credit union. I’ve belonged to the PA State Employees CU for years and when I accidentally overdrew both my primary account and the backup account, they were kind enough to cancel all the fees and set me up with the PSL so it wouldn’t happen again. Great people.
In April I was hit with nearly
$ 280.00 in overdraft fees. I had made a deposit Friday morning, and wrongly thought it had posted to my account. As a result I made several purchases on Saturday.
Most of the purchases were small but there were two large ones debits, and an automatic draft. On the following Monday I discoverd the overdrafts. I also discovered that I had overdrafted my account by 70.00.
How did a 70.00 error become
$ 280.00 in overdraft fees? Simple, my bank and, likely your bank too, doesn’t withdraw a clients money in the order that purchases are made if they are made on the same day. Nor does my bank start with the smallest debits and proceed to the largest. Thus enabling its client to avoid multiple charges.
No, my bank, and most likely your’s too, deducts the largest debits from the same day first. I was given a cockamamey reason why, but I know the real reason. After an account has been depleted by one or two large debits a bank is then free to sock it to its client with over draft fees on smaller debits that otherwise would have cleared.
In my case if my bank had paid the small debits first and then the larger debits I would have only incurred one overdraft fee.
I pointed out this to my customer service rep. He refunded my the money to my account. I think he was afraid I would let the cat out of the bag. Opps, I just did!
When I was 20, I balanced my checkbook wrong. One day I saw that I was $764 negative in my account. $704 of that was all from overdraft fees. $704!!! They bank refused to take it off, and said if it wasnt paid in thirty days they would send it to collections. BB&T refused to work with me on it.
It happens to me when I buy gas with my debit card and run it as a credit purchase. The smaller stations sometimes don’t post transactions for up to a week. One occassion I had forgotten, and they withdrew the money at the same time I paid a bill, causing me to bounce the payment. The bank charged me $35. I panicked about the low balance and immediately transferred money from savings to fix it. I was more concerned about my good standing with the bank than complaining about the fee. Its ludicrous though. Its not really protection if the bank is charging you an arm and two legs.
Well,
you could consider me the overdraft queen. If I did not have food in the house I would go and use my card or check, and pray that it didn’t post before my direct deposit. It was nothing to have an overdrawn account. So about two years ago I closed my checking account and got a prepaid debit card. This has worked for me.
Over $1200 in fees. The bank autodrafted a payment on a loan that I owed them (autodraft required) twice. The autodraft did not post until midnight on Friday. All the debit card transaction I’d done on Friday bounced as did all the transactions that weekend. I moved money to cover the delinquent account on Monday. You guessed it the bank held my funds until all the overdrafts from the weekend posted, then refunded the Friday overdraft fees (but not the weekend fees).
I have been hit by Wachovia so many times it’s disgusting. My account will show several hundred available online, a smaller amount than what is available will process, and I will be several hundred negative. It infuriates me that they can show online $500 of overdraft fees yet when the dust settles, I’m only $475 negative without having made a deposit. Wachovia charges a $2 fee for ANY efort to check on your balance, including speakign to a teller in person. I have had that fee bounce, ionly to find out about it the next day. They will not cash a paycheck when you are negative, and resist cashing a paycheck when you are less than $100 positive. I detest having to argue with a bank that my money is MINE, not theirs to withdraw at will. I detest that they hesitate to cash and deposit paychecks which are GUARENTEED to get paid, and they even will check the funds at the teller counter and inform me that the check is good, but they “can’t” deposit it because my “account balance is not sufficient to cover the check if it bounces.” The arguments and excuses are ludicrous. The banks are goping down the tubes, so they jack their customers with fees and hold deposits to accrue the interest for their own coffers. Banks are out of hand, and, despite vehemently being opposed to Government intrusion, these private banks are literally stealing from their own customers. Every bank agrees to the same basic line of reasoning, and there is no respite for the weary wage earner who simply wants a place to store his cash and a way to use his debit card without fearing his balance not reporting what his ledger does. Theives! Robbers! Put an END to it already!! That junk bill in the article is WORTHLESS!
My husband and I are frugal with our spending. On the rare occassion that we go on a “spree,” the bank calls us within minutes of our second or third transaction to verify that our cards have not been stolen. Why can’t they call us when we overdraft? I know that banks make their money off of overdraft fees, but they would be able to retain more customers if they called to notify us of an overdraft. Shameful tactics!
The economy has gotten so you have to have a bank account. Line them up and shoot them. They’ll be far fewer corporate scumbags sucking the life out of hard working Americans.
My most recent experience with overdraft fees caused me to change banks.
I had signed up for “privacy assist”, a bank affiliated program that charged me over $100 per year so I could moniter my credit. I called “privacy assist” and informed them that I didn’t want to renew the program, so I was shocked to see another $100 charge a few months later, which sent my checking account into the red. Additionally, 3 charges went through and I was charged an additional $105 in NSF fees.
I called “privacy assist” and informed them of the mistake, which they said they would correct within 10 business days. Unfortunately I needed the small amount of money I had in my account before then, so I called the bank and tried to report the transaction as fraudulent. It turns out that “privacy assist” handles the fraudulent transactions, and I was told it would take 10 business days for “privacy assist” to investigate itself (I had talked to a manager, who admitted the second charge was a mistake). I was floored.
On top of that, I met with a personal banker who tried to call the regional office to reverse the NSF fees. I had a birthday check that I could deposit that would bring me back into the black (and allow me to squeak by until I got paid a few days later), but the NSF fees would need to be reversed. After watching him spend over an hour explaining the situation to 4 different people, he told me that he would not be able to reverse the fees until the “privacy assist” reversed the admittedly fraudulent transaction. I felt like I was taking crazy pills! As an auditor for a big 4 accounting firm with a decent understanding of financing infastructure (I’m 1-2 years out of college), I saw no justification for the reversal taking so long, other than the fact that the bank could put the money that they owed me into an interest-bearing account for a while before giving it back.
The personal banker told me that the NSF fees would be reversed once the transaction was reversed. When that didn’t happen, I had enough. I switched to another beauricratic megabank (better than a smaller bank like Indymac that might fail, right?) and I’m keeping my fingers crossed…
I’ve been hit with these before. Last time there were 5 overdraft charges of $35 each that were charged in one day!
I had to calm down for awhile before I called the bank. Finally I called and rationalized that only one check had overdrawn my account. They compromised and removed 3 of the 5 charges.
Wait till you deposit several checks in excess of $10,00 and it gets frozen while the feds check it out. I upgraded several of my customers from the old version of office to the new, 7 sites, all over $12,000 per site, towards the end of my billing cycle on AMEX, they locked that money up for over a month, luckily amex worked with me but between the banks and federal government it was nitemare. The checks all cleared in a couple of days but I did not see any interest while they sat on it.
You are all a bunch of complainers. Keep track of how much money you have and you won’t get charged. It’s simple. Don’t spend money you don’t have. Keep a check register. Why should the bank let you get loans for free? That’s what happens when a check gets paid on money that isn’t there.
I was hit with over a thousand dollars for about 8 ATM overdrafts over a five day period. Due to my own error, the account was short an average of about 300 dollars over that period. The account was held with Citizens Bank, which has (as far as I can tell) the most extreme overdraft policy in the nation, with up to $228 in penalties for a single overdraft. I went to my bank branch and explained to the manager and acknowledged my mistake. I told her that I was willing to pay a reasonable fee, which I would allow her to determine, but would not stand for the bank using an overdraft error as a license for extortion. She refused to make any adjustments.
Thankfully, I had the last laugh, because I immediately pulled two business accounts that I estimate were generating more than $50K in annual revenue for Citizens.
Yes I had been hot by overdraft fees twice. Like most of the users I was not told that I am automatically enrolled for this service.So twice they deducted overdraft fees and when I called bank and argued that they never took my consent for this service. I would have loved to get a denied transaction instead of paying heft fees. Response was that it is mentioned in that long banking agreement which none of us ever bother to go through. I have learnt it hard way but I would recommend everyone , never ignore your banking agreement. Read it throughly and if you don’t understand legal terms call bank and make them help you understand. If you find anything fishy right way clarify and fix it. I guess this is one way to go awy from these hidden charges.
I had National City Bank. I had to checks clearing on the same day. There was money to cover one, but not the other. The bank ran the largest check through first, charged me a fee. Then ran the smaller one through (which would have had funds to cover) and then charged me another fee. I thought that one of the charges was valid, but not both. Just another way for the banks to make money.
Even small town credit unions are guilty! My 22 year old son just recently moved to New York straight out of college, and I wanted a way to get him fast cash/credit for emergencies purposes. Unfortunately I forgot to tell him to deny the debit overdraft “protection” as we did with ours. He was charged fees on transactions that he had no idea that were afforded to him. Needless to say, when he checked his account through telephone teller, he was in overdraft! “Protection” should be offered as loan or credit line, not overdraft fees on bank accounts. Sounds to me like another class action suit similar to the “disability” insurance tagged to consumers loans without their consent filed several years ago.
Once I switched from Compass (villians) to ING, my overdraft problems were solved. ING’s overdraft system is simple: they allow you a certain amount of overdraft protection, and each time you dip into it, you are charged interest on what you “borrowed”. No fee, only nominal (pennies) interest for dipping below your positive balance. When you deposit money back into your account, it is first applied to your negative balance, so you are never in the hole for more than a month. I don’t work for them, but they certainly have a great thing going. Maybe if more people switched over, the rest of the villians, I mean banks, would change their policies.
You make one mistake and it causes a snowball effect. I was charged $75 for a mistake of under $10. The first $25 charge caused two more overdrafts. I called my bank and they asked if I would rather have them not pay the overdrafts?
I’ve been a customer at the bank for 40 years!
I understand that it is a penalty for not managing your bank account. However, the practice of paying the biggest charge first, even when it was a charge done a day or two later, such as on a weekend is a bunch of crap. The banks should configure the system to pay as many of the charges as possible out of the account funds, before they customer overdrafts.
Hence, if I have $100.00 in my account, and I have 3 charges for 30.00 ($90.00) and one for say… 45.00, which happens to be the last one charged, the bank should pay those 3 charges of 30.00 first. Not the 45.00 one. By paying the smaller ones first, the customer ends up paying less. So instead of being $105.00 in the hole, I would only be… $70.00 in the hole. Case in point. The banks have set up the system to allow them to get the most money possible from their customers, and then they can say… “It’s policy, and nothing can be done about it.”
While enrolled in school my wife used our debit card to pay for the remaining balance of her tuition. The school deducted the full amount due to their computer error. We contacted the school and they said they couldn’t stop the transaction but they would refund the amount we paid. When we contacted our bank, they told us that even though it wasn’t our fault, they would still be charging us for the ten overdrafts it had caused. They eventually agreed to refund half of the overdraft fees, but we were told that “they had to make money too.”
I bank at Washington Mutual and they charge a $33 fee each time whether its .99 cents or $99. I cancelled my overdraft coverage sometime ago, but that hasn’t stopeed these outrageous charges because if I use my check card as credit and for example say I have $20 in my account and I spend $30. The transactions go through because I’m using my card as credit and not debit and my account all along says I have $20, however when debits start coming in and go beyond $20 I am paying $33 for each transaction so if I bought a cup of coffee, a soda and a hamburger on three dsifferent transactions totaling less then $10 it just cost me $99. Its highway robbery and I pray someone does something to stop these white collar crooks.
I have argued over and over again with US Bank that it is not fair and not right to do this practice. I have asked why they would allow my purchase to go through if I did not have the amount in my account and then charge me for them deciding that I wanted to take out the loan so to speak. I have asked thay stop doing this and so far no luck . It is not like I am trying to use money I do not have but with the way records are shown online sometimes it is nearly impossible to keep track of things. I understand I were ti write a check that an establishment has accepted but we all know that the technology used with an ATM card is advanced enough for the Banks to deline payment to the vendor at time of use and therefore denying the customer the right to purche what they are intending on puirchesing. That would be they right way to do buisness. No wonder people used to not trust banks. They sure are not looking out for the customer just themselves. We as a society have totally forgotten to read the rules and terms of use I guess and the banks don’t seem to gett that if everybody is broke besides them then there will be no more money for them to make wich mean s they won’t have more to lend wich just makes all the problems worse
The last time I accidentally overdrafted my account at US Bank, I was actually only over by one purchase when I realized my error. The next Monday I looked at my account and saw that they had taken 5 previous small purchases that I had made before that last one and said that those were the offending overdrafts. They pretty much killed my paycheck, which is already meager as I am a full-time student. I feel that some banks are intentionally manipulating data in order to rack up these $35 fees.
Here’s an idea: Don’t spend money that you do not have in your account. Keep a register and keep track of what you have available to you at all times. It’s not your banks fault if you cannot keep track of your own money.
Linked accounts haven’t let me avoid overdraft fees. I have still been slapped with $25 charges (some time multiple ones since they only pull the exact amount from the other account). I would have thought that overdraft protection would be like a loan… then I could understand some form of fee. Since I have linked accounts, it is just a few electrons moving around in the computer which certainly shouldn’t require a $25 fee… especially since it is all my money and none of the bank’s risk.
Regions bank hit me about a year ago. I double deposited a check but I caught it the evening before there was an over draft. I transferred money electronically from another account we have at the same bank. The next day I was hit with nearly $200 of overdraft fees. Most of the drafts were less than the overdraft fee ($35) and the draft total for the over drafts were less that the total overdraft fees. They showed the transfer as “pending”.
I took this to the branch VP who said she was “sympathetic”. I pointed out to her that one draft that cleared that morning with the others was more that the total of the other drafts. Why didn’t they hit me on that one draft with an over draft fee and let the others clear. Her response was “we want the larger checks to clear first so that the folks you owe the most money to get their money.” I told her that that bordered on being criminal. I told her that I could afford to pay the fees but what about those who could not. It was morally wrong. Her excuse was that all of the other banks are doing it. I just about lost it. I just left before I got into trouble.
I keep as little money in banks as I can.
We live in a society where having a card and a bank are not luxuries but social necessities. The ‘haves’ are not affected by this issue, and if you are a “have-not” then, from what I read of the comments of those who see no issue with overdraft fees, you deserve what happens to you. Me, I feel as though I have no choice, I have to beg Master Banker to abuse me.
My (student) son got hit a few months ago. It happened very quickly, in a matter of days he was several hundred dollars in debt due to just purchasing things like Subway sandwiches. He, like most people, thought the bank would just refuse the transaction if the account was short (that’s how the cards were sold). It was a rude awakening for him, and us.
Our daughter also got caught when they changed the system without telling her. She doesn’t use a debit card any more, she does all her transactions with a credit card that she pays off in full.
We won’t have anything to do with debit cards. They’re a really bad deal for bank customers. The US banks should get hit like the English ones — it was discovered there that the banks were only allowed to recover the actual cost of processing overdrafts and so were forced by a series of legal actions to refund a lot of these fees (big money — the banks really rake in a lot of money from this type of scam).
Ha! I’ve been screwed by this more times than I care to count up. Mostly it’s for PETTY amounts, a cup of Starbucks or other small debit card purchase. Nevermind the fact a $1000 check clears first followed by the next HIGHEST transactions, before they go after 6 debit card purchases totalling $27.42!!! Why? Because 6 x $35 = $210 whereas if they just returned the $1000 check they’d only rake in a whopping $35! Ha! what a scam… What makes it even more of a scam is the $1000 check has been PRESENTED only ONCE, chances are the payee of that check will NEVER know it didn’t clear until it HAS BEEN PRESENTED TWICE! This gives a checking account owner plenty of time to pay a $35 fee and add $27.42 to make the $1000 check clear… But again the bank is out $175 in FEE REVENUE!
I admit it… I screw up. I’ve made deposits minutes after the cutoff and I could have done it anytime prior during the day. I FULLY UNDERSTAND my finances are up to me to manage and I CLEARLY understand IT IS MY RESPONSIBILITY to MAINTAIN a POSITIVE BALANCE in my account. But this seems so underhanded to charge me $210 in fees for a $27.42 overdraft of 6 debit card purchases… Someone has GOT TO BE ABLE TO SEE, I attempted to put $30 in sometime the day prior???
But alas my bank Chase NA doesn’t care, they actually EXTORTED a Credit Application from me for ‘Overdraft Protection.’ Otherwise they wouldn’t refund fees incurred when they drew out an anual safe-deposit box rental fee… I was shocked, they looked me square in the eye and told me the only way they would reverse the fees was to fill out a CREDIT APPLICATION!
This and their highest to lowest policies has got to violate some sort of consumer protection law? What I dunno, I’m not a lawyer… My life is worth more than fighting over a few hundred dollars in fees, but I hope someday these ABUSES stop.
WE now know where all the loan sharks ended up after the organized crime crackdowns by the FBI over the years. They all moved to corporate american banks.
I think there should be a fee. However, to avoid stealing from its own customers, banks should charge a percentage of the overdraft and not an automatic $34 per item. Even if it is a relatively high percentage, say 20% of the amount, it should be less than hundreds of dollars on a combined $32 dollar overdraft. They need to make money, but they should not steal from their customers. Maybe if a bank voluntarily did this, they would have a competitive advantage and get lots of new customers.
Bank of America and many banks like it are not only notorious in their use of these fees, they employ what close scrutiny may uncover to be illegal means. I am an investigative journalist married to a banker. Time and again BofA has cleared a large purchase ahead of smaller ones in order to exact a hefty overdraft fees. Why are the funds withdrawn immediately while deposits (cash &/or transfers) delayed clearance? I would like Congress to step in. We consumers are being gouged left and right.
I have to laugh at some of the comments below…particularly the one
about being “text messaged” to be informed they have no money left…While I don’t agree with the exhorbitant fees, here again it’s always someone elses fault or problem, that the person can’t be bothered to keep track of their account. I’d be willing to bet however, that this person knows exactly how many minutes she has left on her cell phone…..
heritage bank sucks the worst,paid bills and had 1 dollar in account for what i thought would be a day or two,the without me knowing it had a 2 dollar fee for something i never herd of before,because of that fee witch did not know they would charge,i was 1 dollar over,three days later i got hit for 86.00 dollers.
I have as well, but it was my own fault for not paying better attention. That being said, in the case of multiple overdrafts, I’d like to see the banks institute a process whereby they could reduce the amount of fees charged to the customer by clearing any smaller payments that can be made with the amount of funds available.
Personally, I’d rather see Congress work on the completely ridulous “ATM Convenience Fee” – no one can convince me that it costs a bank $2 – $3 to electronically access an account at a different bank!!!
I understand that banks are in business to make money – that’s fine. However, I was transfering money from one account to another within the same bank but because the funds hadn’t “cleared” I was charged an overdraft fee. It was from the same bank! I would understand if I deposited a check but it was money I already had. Were they afraid they were going to bounce themselves?!?!Also I think its a joke that a cash deposit doesn’t get applied when the deposit was made – its cash. However, National City (my bank) does apply credits first then debits- so that’s one good thing.
As for the OD fees, how come its illegal to charge 1000% interest on almost every type of loan except for OD? It is a loan.
me too.
i’m tired of getting hosed by my bank. hopefully when the dems get a majority in congress and obama is in the big house we’ll get some relief. i got burned for like $300 like Mike in KY recently, totally criminal.
It is rare when I am slapped with banking overdraft fees because I have direct deposits from two different government employer sources and I am extremely careful about not overdrafting my account. However, this past month, it was the “perfect storm”. I bank with Chase and I had made a deposit at an ATM for a couple thousand dollars using a government check and then two direct deposits from a Federal agency for another couple thousand came in. However, these desposit were done on a Friday and I had automated payments being deducted from the account at the same time. Thus, even though I had made enough deposits to clear all of my bills, these deposits took several days to “clear” with the bank even though they were government checks and direct deposits…and the bank decides how long they will take to clear any checks and direct deposits, regardless if those checks come from the US government or not. Well, Chase slapped me with two HUGE overdraft fees of $50 and $65. These are well above the $35 norm for other banks. They charged me these fees even though THEY KNEW that I had the funds in the account from direct Federal deposits. I was ANGRY and called them to complain. They removed the fees but acted like they were doing me a favor. Unbelievable. At the least the banks can decide to clear government checks quickly compared to other checks. Their “hold” policies have much to do with their charging overdraft fees. If they decide to “hold” your check for several days, they can charge you overdraft fees. Make sure you insist that they remove these if your case is similar to mine and don’t take NO for an answer. If they won’t take the charge off, lodge a complaint with the state BBB where your bank resides or to the Attorney General if the bank does not respond to your BBB complaint. It’s the principle of the matter!
I was hit with almost $350 of overdraft fees in one day with Bank of America. We had several purchases that were small and were expected to clear before our rent check was due, and my wife’s paycheck was supposed to go in they day after our rent was due.
The rent check cleared the same day as all of the other transactions, and my wife’s paycheck was three days late. If they had paid the other transactions first, We would have had 1 overdraft fee. Instead, they processed the rent check first over drawing the account my 65 cents and we were charged a $30 fee. The next 9 transactions were charged a $35 dollar fee EACH, even though they were all less than $20 each. When my wifes check was deposited we were overdrawn $480, a daily fee was charge too. We ended up spending my wife’s entire check paying fees.
Worst case scenario I was expecting was to be overdrawn $85 because of the 1 overdraft fee and difference in our remaining balance and the rent check.
It took 3 months before we finally got back on our feet, as we had gone two weeks without any money from my wifes check and had to postpone paying some bills.
Not only have i experienced the wrath of overdraft fees, one weekend with 5 charges, equaling about $23 and change…$175!!!!!
My favorite though…my friend transfered money into my account from his…did all the “work” on-line with NO tellers involved…the transfer…$80…his fees on his side…$20…and get THIS, my bank charges me $10 to RECEIVE the transfer of $80!!! NO TELLERS INVOLVED!!! pondscum!
Here’s a thought: don’t spend money you don’t have. I do agree that deposits should be credited before debits and cash should be available upon deposit. However, it is your responsibility to know how much you have in your account.
I don’t understand why when you go thru an ATM machine and there aren’t the funds there to cover a transaction, the transaction still goes thru. My 19 year old son, learned the hard way that his piddly little trips for fast food quickly added up to the tune of $400.00 when he kept using the card with insufficient funds to cover purchases. What happened to denying the purchase if the funds weren’t there…NOOO! the bank loves throwing on those finance charges.
Bank of America customers BEWARE: BOA has now started charging overdraft charges for PENDING transactions, and they still prioritize and re-order your transactions biggest to smallest. I had one recent pending transaction that overdrew my account by less than $10. I had several other pending transactions made from several days earlier and guess what BOA did? They put my latest pending transaction in front of the rest and charged me $35 a pop on several $1 – $5 pending transactions made MANY DAYS before the actual pending transaction that “overdrew” my account (technically it wasn’t overdrawn because none of the transactions had cleared; therefore, BOA had not actually loaned me any money because they hadn’t paid out for any of the charges yet). It cost me several hundreds (and yes, I did call them). And, by the way, within 12 hours, a direct deposit was made to my account for over $1000. And the charges were STILL pending for at least two more days AFTER the deposit was made, yet they still took their overdraft charges even though my account was never actually overdrawn.
Notice how I keep saying “pending”. Isn’t it robbery to auto-deducts funds from a customer’s account for charges the bank hasn’t even paid yet? I wouldn’t be surprised if a class-action suit doesn’t arise soon from this unethical and illegal business practice.
I’ve had a checking account since I was 14 years old. I’m 33 now. Until a year and a half ago, I had never overdrawn my account. In fact, I’ve always made decent money, had exemplary credit, etc. But then I hit a rough financial patch (laid off) and a few small overdrafts turned into a vortex that kept me sucked in trying to dig my way out because of BOA’s policies. And my account was always hovering at low balances due to the outlandish charges I paid each week just to recover from a snowball effect that literally began with a couple SMALL mistakes.
Fortunately I am financially recovered and rebuilding, but it’s taken well over a year to get back on my feet firmly – no thanks to BOA. As an upper-middle class income individual (again finally), I feel great empathy for low and mid-income families and individuals who straddle the fence by living paycheck to paycheck. I noticed one commenter say “Take responsibility for your own actions of not keeping a balance in your account. If you have fees to pay, please don’t blame the bank for your mistakes, take responsibility and pay your fees.”
At one point, I might’ve been so arrogant and self-righteous to make such a statement, but that was before I experienced firsthand the financial maelstrom that can occur from what starts out as a few minor errors. And when you don’t have the means to recover, the hole just grows bigger and bigger.
The banks ARE getting rich by feasting off their poorest customers. And, trust me on this, it’s not always the customer’s fault, either, nor is about people not taking responsibility for poor money management. It’s about opportunism and banks exploiting the mistakes and bad situations of their customers and finding more and more ways to do so. Banks are bottom-feeders.
I am so happy that I have moved to a credit union.
I was recently a victim of excessive OD fees. The first overdraft fee of $34 caused my account to go $36 negative, then my $3 Starbucks purchase came out (that was an expensive $37 coffee!), then my $8 lunch (aka the $42 sandwich), and several other small purchases ranging around $5 each. By the end of one day, I was several hundred dollars in the hole. I agree that the fee should be a percentage of the amount of the overdraft. Charging a $34 overdraft fee for covering my $3 coffee somehow seems unethical.
I love the Bozo who stated people should know what is in their accounts and not complain. Clearly he has not had a problem with his bank, hope his situation continues on this good path.
Personally, I used to be a Bank of America customer and they are total scammers. They have been sued before over their whole process of processing debits before credits. They will usually credit back the late charges but you have to ask first. Total BS. Now we are members of Pentagon Federal Credit Union. They are great. We have overdraft protection where they give you a line of credit and all you have to pay back is the interest that accrues before you pay it back. I was a little miffed at having to pay a few dollars for an overdraft I caught the same day, but after reading $35 or $90 for an overdraft charge – I won’t complain again.
Oh, and one person posted that the $35 was a deal compared to the late charges and damage to their credit caused by being late on their mortgage/car payment, etc. A mortgage company isn’t going to report one late payment to the credit agency, especially if it isn’t 30 days late. Same thing with your car company and your interest rate won’t go up. They usually asses a small late charge $5 and call it a day. It doesn’t even matter if you do it every month. I had a friend that paid their mortgage every month on the 15th, the day before the company considered the payment REALLY late and they never had any trouble. Not my personal practice but I know that she did this and same thing for her car payment. She always took the late charge.
in the article, you recommended having a linked account. Well be careful with that. i had my bank of america checking attached to my credit card. back in april, they starting charging m3 $10 to do a transfer in addition to all the regular credit card fees. i think i’ll learn how to subtract instead.
If the bank is processing your transactions and the total could take you over the limit, I think they charge the highest item first and then the next cheaper, etc.. Let’s say you make 3 $4 purchases and then a $100 purchase but only have $98 in your account. Intstead of processing the $4 purchases and then the $100 purchase (which would result in only 1 overdraft fee), they’ll process the $100 first and then you’ll have 4 overdraft fees. It’s absolutely ridiculous. Bank of America does this routinely!!!
The fees are excessive yes. And situations mentioned where the cash deposit was made, but debit card transaction overdrew the account is a bit ridiculous, but after working in banking for the last 15 years I can tell you situations like that are the minority when it comes to overdrafts. Usually if you walk into the bank and explain the situation they will work it out with you. The majority of overdrafts are people who repeatedly write checks on uncollected funds knowing full well what they are doing is wrong and ILLEGAL. Most are just playing the game hoping their deposits clear before the check clears thinking the check will take a few days to clear. It is illegal to write a check knowing funds have not cleared yet at the time the check is written. Not when you think the check is going to clear. People often park in no-parking zones thinking they are only going to be a few minutes, but if they get caught they get a stiff penalty for breaking the law. Yes $35-50 is stiff for parking in a spot for only 5 minutes, but you broke the law knowingly. Same goes for writing a $5 check and hoping your paycheck clears before the check. If you get caught breaking the law, you pay the penalty.
My partner and I transfer money between our accounts frequently and between the 2 of us probably rack up hundreds of dollars in bounced check fees a year due to the fact that they will clear a debit card purchase before the transfer clears. Why don’t they just decline purchases when you don’t have sufficient funds? That’s the way most credit cards work. Our teenager headed off to college and she used her debit card without realizing she was out of funds. She learned a brutal $200 lesson with her hard earned money when she saw what had happened. It’s robbery and the banks are taking our hard earned money for what possible sensible, explainable reason??? I vow next year to stay on top of this to avoid feeding bank of america more of OUR money. I am relieved to see someone in govt. starting to look at this problem.
My son, because of his mistake, was slightly overdrawn. He used his debit card for ever thing. Including coffee on the way to work and lunch. His bank continued to charge overdraft fees of $35 every time he got a cup of coffee. Never did they advise him they were doing this. After five days when he deposited his $750 paycheck, the receipt they gave him reported his balance was zero. The unannounced fees ate up his entire pay check. Not a single purchase was over $15 and most by far were under $7.50. He protested. Did no good. Asked for his check back. Did no good. Asked that this “customer service” be turned off on his account. The bank (TCF) refused saying all customers are required to retain this important service. (Important for who?) My son closed the account and TCF blackballed him making it difficult to get a regular checking account. TCF then sued my son for the $245 that was “stilled owed” TCF in unpaid Customer Service fees. When it is a banks policy to not advise you when this is occurring AND is also their policy to require all customers to have this service, then run not walk to another bank. According to Consumer Reports, the largest single profit line income in the banking industry is penalty fees charged to customers.
ARRRRRRRRRRRGGH! I must have paid Bank of America at least 500$ in these fees. I would prefer that my debit card not function when there are not sufficient funds!
I think, as an idea, overdraft fees are ok. They allow you to have an emergency charge even if you don’t have the funds available at the moment.
The problem is that it is disproportionate to the charge. It should be the amount of charge + 20% and that’s it.
Another problem is that most banks have a system setup to process deposits slower than transactions thus sometimes you will deposit an amount only to not have it available for a few days while you have transactions accruing overdraft fees.
It’s a very obvious way of income for them and it’s not necessarily a bad idea, but their unethical ways of delaying deposits so you intentionally accrue fees is a huge problem.
We got hit by Overdraft “Protection” big time. I do not think that this is the feature designed to Protect the customers, but this is the feature, which is a loophole in our law, that designed to rip-off customers for their financial purpose.
I definitely think that the Congress should step in with a law to stop this abusive and greedy behaviors from the bankers. We all know that they have to make money, but charging customers like us 6 times of small charges (coffee) in a day is just flat wrong.
Can’t really see why being extremely lazy is an excuse for charging a debit card when you have no money or writing bad checks.
This is the age of telephone and internet banking. If you can’t be bothered to balance your checkbook and keep track of your debit card purchases, why does the responsibility for your laziness fall to the banks?
If they simply returned every bad check and overpayment, you think that would be better? When your mortgage and utility payments bounce tell me how well that works out for you.
And the banks should seek your permission to charge a fee because you were too lazy to make a phone call or surf the internet before buying something?
Sorry but if you spend the bank’s money, you’ve already given consent to being charged a fee. It’s in the agreement you signed when you got your checking account.
Why people expect banks to hand out free money because they have bad paying jobs or life’s legitimate expenses prove too much is beyond me too.
By meeting your financial obligation to the businesses you’ve charged a debit card to or written a bad check, the banks are doing you a huge favour.
Believe me the fees involved if they simply bounced those payments would be far worse. As would the criminal charges for stealing. Because when you write a bad check or make a bad payment, that’s exactly what you’re doing. You’ll find most States are quite strict about you doing this, and saying “I didn’t know I had no money” is not going to go down too well if you actually end up in court. As far as I know being too lazy to check your balance isn’t much of a defense to writing bad checks. But again, see how well that works out for you.
I know, I know, this is America and no one is responsible for their own actions, or their finances, or their children, or their behavior, or..
These overdraft charges are criminal in light of the fact that when Check21 passed a few years ago, banks secured the right to take our money the minute a check is written. As a result, they can take money out of our accounts the minute a check is accepted by a business or deposited into an account. But often the deposit doesn’t show in the recipient’s account for up to 10 days. That is THEFT.
As if that wasn’t insult enough to their average working customers, now they hit us with outrageous overdraft fees. I have been hit with these fees after relying on the balance and completed transactions I see online. But there’s a difference between balance they show online and the reconciliation that appears on my final statement. Often the transactions are reflected in an order different from what was shown online–to benefit the bank, of course. Sometimes they put a single large purchase ahead of many tiny purchases, so they can charge multiple fees instead of a single fee. In other cases, the bank holds a deposit made early in the day so that purchases made with a debit card after the deposit result in overdrafts.
I’m seriously considering cutting up the debit card and dealing in cash for regular purchases (gas, groceries, etc.), money orders for bills, and PayPal for online purchases. I cut up my credit cards years ago. Is this what the banks really want? Because this is what they will get.
“My mistake, but….” Doesn’t count. People screw up, own up to it. I recently got nailed with OD fees at my bank. The bank refunded some of the money after I talked to them. The thing making the difference is the bank rep said business’ sometimes place a hold on a transaction without telling you. So while it says you have the money in the bank (Even according to your records & the banks) the money with a hold will be set aside causing you to overdraft. To me, the “Holds” are a bigger scam than Overdrafts.
Early in my marriage…we were hit with overdraft charges…it usually happened when we deposited our checks and the bank credited it to our account. But, then I found out our bank offered what they call “fast draw” which is like having a certain level cash loan that kicks in when your checking account goes into the red. It is a lot cheaper as you are only charged for the interest once the fast draw money is used. So, instead of $25 charges…you wind up with only a couple dollars to pay…depending on when you pay back the fast draw account.
Yes I have been hit and agai, usually from small ATM withdraws. It is a total rip off and should be against the law. I am ready to just keep my money in a tin can. The banks do not offer any real interest on accounts anymore, so I do not see any reason to give them my money.
No, that is why you should use credit cards and pay them off every month. Use a credit card like a debit card, but make sure you pay it off every month.
The other day i did 3 purchases, and by the time i got home i transfered money to cover for it. Well, the next day, i checked my satement online and there were all 3 purchases on red and then overdraft on all 3 of them, even when i had the money on the acct. Bank of America told me that the funds werent available when the purchases were made and that i had topay for the overdraft. But what they failed to mention me was that when it wen in overdraft, the $35.00 x 3 fee wasnt available. So guess what??? They had the guts to charge me the fees again. So now i am down $35.00 x 6 for the 3 purchases that don even add up to $80.00.
I tried disputing the charges, because they failed to mention me about it when i called, the lady i spoke to should have noticed it on her system and told me, but there was no luck there. I could have transfered more money in it just to cover for it. They just want your money!!!
I cancelled my accounts with them!!!
It doesn’t happen often, but sometimes, before I realize it, I’m getting hit with overdraft fees and I even have my checking account linked to my savings account. There will be more than enough money in my savings to cover the NSF’s in my checking account, but the bank will only allow 6 withdrawls per month from savings to cover the overdrafts and after that charge me $35 per overdraft transaction. It’s pretty frustrating knowing you have the money in your savings account to cover the transactions, but the bank will still charge you the $35 fees because they have a limit on how many times they will take the money from your savings to cover your checking. As soon as I realize I have NSF’s in my checking I transfer funds from savings to checking, but sometimes I’ve already been hit with several overdraft fees.
one problem with the system is that when I make a deposit whether it is cash or a paycheck after 2pm it is pending until the next business day while debits are pushed through at all hours of the night
I think another great question would be why the bank will deduct immediately for a transaction and take days to process a deposit. I’ve had similar situations as the start of the article with depositing cash (I understand a delay for a check to clear) and the next day spending money with my debit and getting hit with overdraft charges.
I used Bank Of America, Business Account since 1995. When my business ran into some trouble I was hit with close to $300 in overdraft fees at $30/overdraft. I’m now trying to settle with the bank. The outstanding amount owed was less thean the overdraft and now I owe them more than double. NOT FAIR.
If your bank puts the largest debits through first, join a credit union. They’re more interested in using fees to lower costs and improve savings rates, where banks are in it for profit.
If you get stuck with overdraft fees often, just carry cash.
Sure it sounds ‘wrong’ when you get hit with the $35 fee for a $5 Value Meal, but that’s what usually happens when you either live paycheck to paycheck or fail to both setup your accounts properly or read the fine print when opening an account.
Besides that, you don’t really think all of those ‘free’ services are really free do you? They’re paid by the fee payers.
I was recently hit with overdraft charges due to a mis-calculation on my part and an auto-payment that I had forgotten about.
Because of the way the system worked I was hit with 6 overdraft charges that totalled over $200. The thing was when I made the purchases there were sufficient funds in my account but the auto-withdrawl posts instantly and the debit card purchases (which totalled $90) all took 3 to 4 days to post. Had I withdrawn cash to pay those purchases I would have been fine.
Now the bank did withdrawl the overdraft chagres but not without talking to 4 different people and spending about 2 hours on the phone.
Many, many of us have been hit with these charges but neither we or the article written by Ms Dickler are looking at the REAL issue – the banks and how they “conveniently delay” money transfers and get charges which, if the corporations didn’t own the govt, would – or at least SHOULD – be illegal.
These transactions are done on & by computer which take fractions of a second. Thus, WHY is it taking a bank a day – or more – to complete the transfer? Because it is in their interest to delay it. Just like when you cancel a land-line or cell-phone, you get a bill forclosing the account and then you get another bill after the fact – something that shouldn’t be happening in the 21st century with current technology. It’s done to rip you off, nothing more.
If you keep track of the money in your account by using a simple and generally FREE check register you won’t unknowingly overdraw your checking account and you obviously won’t get fees. Also, when you open a checking account you are notified of the bank’s funds availability practices so if you don’t pay attention and spend money that is not yet available it is your own fault.
I used to work at a bank and they had “free checking accounts.” At internal meetings they used to call them “bottom feeder” accounts. They would suck the poorest people in to getting accounts because they kew they would overdraw them and they could mkae big $$$$ off the fees.
One time they charged me with overdraft fees for purchases made before I ran out out funds because they claimed were credit purchases not debit and therefore wouldn’t clear until after. My husband was able to get them back after proving to the manager it was wrong. Since then, we opted out of the overdraft protection and we haven’t missed it.
Like the article says most of the overdraft occurs in debit card, which means these are small purchases mostly less than the overdraft fee of $35. Overdraft fee is totally ridiculous. Its not like I’m taking half a month loan of a grand or something.
Apparantly Tim from Irvine,CA has never made a mistake in his life. Good for you Tim! I got whacked with overdraft fees a couple weeks ago. My mistake, that I forgot about an online payment. Anyone here ever make a mistake? I know I do once in awhile. You shouldn’t have to pay through the nose though. So I had to pay $105 on the $75 overdraft. Yes, some folks will say I am whining for something I could have prevented. But if I happend to break somone’s window with a baseball should I know pay for all the windows in the house to be replaced? I think that is an appropiate analogy with the overdraft fees. By the way I happend to keep most of my money in an ING savings account which at least gives me some interest. Checking accounts are horrible so I only keep enought in there to pay bills and some petty cash. I do agree there should be some penalty but it should be based upon the total amount overdrafted. I shouldn’t have to pay $105 on $30 worth of small charges.
I deal with Bank of America and I have paid them dearly in the past year with $35 charges and understand I am going to be charged if I do not have the funds available but what I have discovered is that they are moving my transactions from largest to smallest. I use my debit card and expect the funds to come our immediately upon my purchases. I have found that Bank of America will have my transactions Pending and will pay a larger amount that was spent at a later date first. An exapmle is I had funds available for a purchase I made and the next day made another purchase that went over what I had left. Bank of America took the purchase I had made the second day and paid it first, and charged me $35 because there was not enough funds and of course the first purchase I made that I did have funds at the time to cover was over since they took the second days purcahse first. I do not understand what gives Bank of America the right to move my purchases around. I this case I was charged to seperate $35 fees. I can understand the one because the second days purcahse I did not have enough left after my first purchase the day before to cover it. I feel that the purchase I made the day before should have been taken out that day, not held and moved so they could charge me first. This has happened quite a bit with them moving the purchases so they can charge more fees. I have automatic deposit through my company but actually just sent a message to Bank of America that I will be closing my account and my direct deposit. We are just a number to the bank not a customer or even a person, just a number and how many fees they can total up with moving my transaction. This is my money that I work hard for – I am not a number and I will not be a number to Bank of America any longer either. i will go back to paying cash – all of my utilities are within my city so I am just going to drive by and drop off payments in cash now. Online banking is easy and fast but I am sick of the bank taking my money and spending it the way they feel they can. It is my money!!! Sorry to be so long this is a touchy subject. I could go on and on
I have been. It seems my bank has a policy of clearing the largest check first, which can result in a number of smaller checks bouncing. Then they get to hit you for numerous overdrafts. If they would clear the smaller ones, you would possibly only get one overdraft charge. Sounds like a racket to me.
I have been hit with thousands of dollars this year in NSF fees. I have broken down and cried. Why would theh bank allow the transction to go thru and then 3 days later charge a $35 fee for each transaction!!
they pay the $500 ck first which causes the $ 5 AND $ 10
CHECKS TO BOUNCE. so they rack up 6 fees. If the $ 500 was paid last, i would have one od fee and not $ 180 in overdraft fees for six checks.
That is criminal
While sometimes the $25-$35 fee might save you a bigger headache if your check would have bounced (imagine car payment or mortgage payment penalties). But, if you are using your debit card at a store to make a purchase and you have insufficient funds, your purchase should just be flat-out denied.
I was hit with a $30 overdraft charge for buying a gallon of milk, and then I returned back to the store in a moment because I forgot to pick up some other item. Right there that cost me $70 extra.
I wouldn’t have bought those items at that time if my card was declined instead.
I just got hit with the overdraft fees. I had some ‘Pending’ transactions which would have have casue a negative balance when they posted to the account, I made a deposit to cover the transactions but because Comerica Bank considers the transactions to have already posted they hit me with 3 $36 overdraft fees which of course gave me a negative balance so when the transactions did post I got hit with more overdraft fees for the same transactions.
Yes,
I was hit instantly by these charges and went to the local branch to complain. They assured me they would look in to it and when i did not hear back from them, i called back again and again. i eventually was able to get 5 out of 7 refunded. Not doing business with this bank anymore
I have two accounts fromt the same bank, one is my checking and the other is my savings. I transferred $200 from my savings account into my checking. The money was taken out immediately and it showed that it was out of the saving and it said it was AVAILABLE in my checking, the next day, I was hit for 3 charges of $35.00 for 3 transactions that were all under $15.00. After arguing with them for about an hour, they refunded 2 of the charges, and said this is the only time they will do that, they will not do it again. I can see if the money wasn’t there at all, but they had to see the transfer was there. I definetly think something should be done about these huge fees they are charging, it is unfair.
I also have been hit with the fees. I overdrafted with 23 cents. Not $23, but 23 cents. So they were so generous as to hit me with a $37 fee. The funniest part was that it cost MORE to put a stamp on the letter telling me I overdrafted than it was to just wait 1 day for a deposit to clear.
I called the bank to complain and they said the fee was because it costs the bank time to file these things. I’m sure that $37 was to lick the envelope.
2nd comment–to remarks about just keeping your checkbook balanced.
The policy of largest clears first negates that completely. You can have several small things you charged when you had money, then by accident make an overcharge, and if that overcharge, which you made last, is large, it will clear first, making all the others get fees.
I had this happen once, where as soon as I realized I didn’t have all 66 dollars in my account, I was at the bank that morning when they opened to deposit it. And I was prepared to pay the one charge, but not eh 8 more when they put the 66 dollars through which caused items I’d charged days ago to bounce. The register you keep would show you the same… One item should have bounced, not 8.
We changed banks because of this. In one day, our former bank hit us with 5 $35 charges for a $30 overdraft which was due to the change in timing of an automatic bill payment. The only reason we got hit with 5 charges was because the bank’s policy was to process transactions from the largest $ amount to the smallest.
Meanwhile in our savings account at the same bank, we had plenty of money that would have covered the transactions. The ONLY overdraft protection option that bank chose to offer was the high interest loan route.
So we moved all of our accounts to another bank that offers a protection plan where you can link your savings and checking in such a manner that you authorize them to make an automatic transfer from you savings to your checking to cover any shortfall at the end of the day. The fee: $10 per transfer. Since the transfer is done at the end of the day to cover the ENTIRE balance, you don’t get hit with a fee on every transaction, just the $10 for the day.
Shop around for a bank that treats you right. Take your money/business with you. Show the bankers that outrageous fees based on cost structures from when banking was done on paper only serve to loose them customers….
Yes, I’ve had my share of these overdraft fees as well. I have direct deposit and a savings account with Washington Mutual and they still charge me these fees when my direct deposit is sitting there not yet processed. I think that the overdraft fee should kick in if the charges are not paid by a particular time set by the bank. Those fees can take your whole pay check if you’re not aware of your balance.
The timing of this article was uncanny … I just got hit with an overdraft fee with 5/3 last week … but I called the customer service department and they were able to reimburse me over 100 dollars of the overdraft fees … it wasn’t all of the fees, but it helped …
I was pretty well killed with overdrafts by Wachovia – check clearing lags on my deposits – but not on my withdrawals. Once, I wanted to check my balance at the ATM by trying to withdrawal $20 (thinking that it would deny me if my balance was below that) – no, it gave me the money but hit me with a $35 charge. What happened to “request exceeds balance” message? – Historically, dont the money lenders always end up abusing their position? – Fight back
Everyone has similar stories to mine and its very sad. Banks will profit at peoples misfortunes, no doubt. I’m going back to using ready cash for those small transactions and switching my checking account to a credit union that does not have these greedy policies.
My son just had three $35 overdraft fees waived that hit in one day. One was for a $0.06 charge because he pressed the wrong button at the gas pump. Banks and credit card companies are looking for every opportunity to hit you with an extra charge. The lesson he learned – Make the call and ask that the overdraft fees be waived.
Before we were married, my wife had a bank (First National) that was particularly deceptive. She kept getting overdraft charges and couldn’t understand why.
It turns out, that she had overdraft protection (which usually banks only charge $5-7 for using the actual protection that is like a standing loan), however the fee to use it was $35!
What’s worse is that when she looked online, she would see “Balance” and “Total Available.” In most banks those two would only be different when you have a deposit that hasn’t cleared, but they will let you draw against.
Not at First National! Instead the “Total Available” was the balanced plus the $250 overdraft available! It wasn’t stated anywhere though that that is what it was, so my wife kept thinking she had $250 more to spend than she really did and overdrafted the account causing huge fees!
Completely fraudulent, IMO.
yes! and the bank would hit us for 35.00 for a 1.65 charge that took place on a debit card. The bank’s attitude about it was so aweful we switched banks. We now have a different arrangement set up for a actual over draft protection account that will only charge us 10.00 per transaction which is much easier to deal with than 35.00 a pop. Banks are very greedy and do not care about the common folk trying to make it this poor ecomony/increasing cost just to live and get to work.
Wellsfargo charges individual overdraft fees for each charge. At one point where I hadn’t realized that a check I deposited hadn’t cleared, they charged me individual $25.00 fees for the $3.00 checking account fee and the $1.00 secured transactions insurance, both of which go to the bank. So really, the bank hadn’t cleared my check, but charged me $4.00 in fees and collected an additional $50.00 on those fees.
Bank of America hit me with a $34 overdraft fee and my account was 22 cents over drawn. The over draft occured because I used somebody elses ATM. That is HIGHWAY Robery & I went into BofA and had a discussion with the manager and they would not wave the $34 overdraft fee.
I told Bank of American what I thought and uses a few colorful metaphores and closed both my accounts.
I was filling up my car with gas, and I overdrew my account my .10 cents, and the Regions Bank overdraft fee on my account was $35. I was mad, it just made me feel that my bank was robbing me.
The majority of clients who blame banks for overdraft issues tend to be irresponsible spenders to begin with. To imply banks trick clients into overdraft programs is also irresponsible journalism. Consumers sign signature cards at account opening acknowledging receipt of Agreements and Disclosures including fee schedules in regards to overdraft programs. It is the clients’ responsibilty to know how much money they have. It is very simple if you do not want to pay fees,do not spend more than what is deposited and do not spend money based on intentions to deposit later. By taking responsibilty and balancing checkbooks regularly, overdraft fees would diminish. By having congress intervene and hold consumers hands for something that is within their control is ridiculous.
I had a checking account at a bank that would re-arrainge the order that the checks/debits came in from highest to lowest.
I once got nailed with $231 in fees on a $20.00 mistake because I was using my debit card for lunches at the time and I had 7 debits that fell in that $20.00.
If they hadn’t re-arrainged the order I should have had only 1 overdraft because I had another 7 debits over $20.00
Has anyone else had this happen?
I think it has been a scam by the banks for a very long time. They will clear your biggest checks first so that the ones you bounce are small and numerous – adding up to several overdraft fees. Then it takes 2 or 3 days for you to get the notice in the mail, meanwhile racking up more negative numbers! And I agree with the person at the beginning of this story – if there is a transfer pending, they should not be allowed to charge overdraft fees.
If people keep an up-to-date check register, then they should rarely (if ever) have an overdraft fee. The only real exception to this is some sort of unauthorized use/stolen identity activity. But if you take the time to log all of your transactions in a check register, and keep it up-to-date, then you’ll always know how much money you really have in your account. You can’t rely on what your online balance says through an online banking website; that doesn’t show you the true amount of money you have. Only an up-to-date check register can do that.
I think too many people either don’t log their debit card transactions in a timely manner, or just simply rely on their online banking account balances, or both. Things like debit cards and online banking are convenient for people, but that doesn’t replace the need for properly balancing their checkbook.
Are the fees that banks charge high? Yes. But it’s still everyone’s responsibility to properly manage their own finances. If people keep up with their account balancing, then the amount of the overdraft fees won’t be an issue, as you won’t be getting feed in the first place.
I too tend to agree that people in today’s society don’t want to shoulder the blame for their own actions, but rather just point the finger at someone else.
People can also look into joining credit unions, as their fees are typically lower than banks. So if you are going to get feed, then at least go to a financial institution that offers lower fees.
I was nailed with a few all in one day a year or so back. I had a check clear that put my account slightly over. As a result I bought some gas at the pump, which I ended up paying the price of two tanks of gas and then went inside to buy an unsuspectingly 30-sum-dollar hot dog. Then later that day I bought a 30-sum-dollar pack of smokes. Needless to say I was furious. It’s not like you know you are even doing it. After talking with the bank and finding out that even if I had overdraft protection linked to a credit card I would be charged like $10 a pop, I promptly closed all my accounts with that bank. I have been banking with USAA ever since. They don’t charge me a fee if I accidentally overdraft when I have it linked to my credit card. As a result, I probably save $200 a year in overdraft fees. It’s human nature to overdraft occasionally, but banks certainly shouldn’t stick it to you multiple times in one day. What they should do is just decline your debit card purchase for insufficient funds, but I guess they don’t make any money that way. My advise: Pick a bank that doesn’t use these ridiculous practices to seemingly rob you of your money legally.
Bank of America is one of THE WORST. It all started because the check I wrote to pay my electric bill on the same day as I deposited my pay check miraculously was debited from my account over the weekend, while at the same time a 3 to 5 day hold was put on my paycheck deposit. BOA paid the check and charged me $35 for an overdraft fee. I didn’t know about that additional money taken from my account, so my check register was off by $35 when I deposited my next paycheck and used that money to pay bills. That caused me to get six or seven $35 overdraft item fees, THAT DAY ALONE. Also, Bank of America charges you a daily fee every day your account is in the negative. I did everything I could think of to make the fees stop being added again and again and again….but I was told I couldn’t close an account with a negative balance and as long as the account was open it would continue to accrue more fees, fines, and penalties. The grand total so far? $1800.00 and counting………BANK OF AMERICA IS SATAN!!!
I’ve been hit on numerous occasions, but the real issue with me is that I never was informed of process/charges till one day I went into the the bank and asked what it was about. I was told a piece was included in with my monthly statement in ’small’ print. Surprise!!!!
Bank of America has now started to charge 35.00 for pending charges even it I go in to cover before they have cleared. They take my cash and still charge me 35.00 for up to 5 pending transctions…I have been there 21 years and this is the first time in the last 2 months they have reamed me, I called them on it and got some of it back…This new policy is going to kill me if they keep this up, I have now transfered money to my money market to have to keep things covered, but what they are doing is not fair…
Overdraft fees are the most repulsive and dishonest part of banking. I can not possibly describe how much I hate overdraft fees.
I use Bank of America, and I will say they are the worst. So why am I with them? Because I can’t open an account with any other bank since I close a B of A account years earlier when I was sick of their overdraft fees! I put in just enough money to cover what the bank actually lost, then left them sitting with the OD fees.
B of A has several completely dishonest and unethical practices.
First, they pay highest to lowest, so you could have 10 items all get OD fees when they all would have been paid if the highest was paid last.
Second, they DO not keep your account online up to date. They even (and I have screenshots to prove) will go in and change dates of items deposited in order to squeeze more overdraft fees. Not long ago, I deposited some money, it showed as deposited and cleared online the next day. I made purchases, but then the next day the deposit was changed to “pending” so then I got hit with OD charges.
Third, if you make a CASH deposit into your account at a teller, it won’t credit to your “account” immediately even though you can take the money out at a teller. Essentially they are gaining interest on your money before it’s “credited” to your account.
Fourth, their system will allow you to spend the money from your account while it’s pending, yet will give you overdraft charges at the same time. How is that possible? They will allow you to spend the money even though they will overdraft you if you do???
This is theft, pure and simple. We have no choice though, you HAVE to have a bank for your money. Many companies now won’t even print out a check for you anymore, they require you to direct deposit your money.
Yea, I have been hit with overdraft fees. $35 bucks a pop for 7 or 8 little purchases of about 2 to 10 dollars each. My money had not cleared and when it did they took their un-fair share.
Me and my wife live in different towns and wanted to choose a bank that has branch offices near each of us. We chose Wells Fargo and that was a huge mistake. We found that our US CURRENCY would not be posted until the next business day and this caused us several overdraft charges of 35.00 apiece because they will surely bebit our account as soon as a purchase was made with our card but hold our deposits. We have since changed banks and we will never recommend this establishment to anyone and if asked we will tell people how they treat their customers/indentured servants.
I too have been hit with them. wellsfargo also charges 35 dollars. so last time i paid almost 40 dollars for a combo meal at a fast food place because everything takes so long to clear and always shows “pending” on my online account. oh well. I guess I just should start doing everything cash.
The only reason that banks charge these overdraft fee’s is because just like any other business, the banks need to make a profit, and due to all of the online loans given out from websites such as lending tree etc giving out much cheaper loans forcing the banks net interest margin to be squeezed, they were forced to find another way to get the income they need to survive.
I had this happen to me because I had paid a bill online and forgot to deduct it. My bank – Farmers & Merchants Bank of SC – not only charged me for the use of the protection, they also charged me for overdrawing. I paid a total of $65 for the overage which was less than $30 and had never used this before. If that is a “protection”, as you said in your article, Americans are better off just paying an overdraft charge.
I wanted to be correct on my information. Riverside NB in Florida
Insufficient Funds charge is $95.79 if there is a continuous overdraft fee $6.00 a day is added on top.
I have been banking with B of A now for over 2 years. In the last year I have been hit with the rediculas overdraft fee of $35 per item. There is a snowball effect to their system they have set to their advantage. Their system automatically takes the higher amount of a transatcion and either pays it first or holds those funds for a day or two while other small transactions either by check or by using your debit card come in and there are not enough funds to cover them in your account. Even if the smaller transactions were done a day or two earlier than the larger transaction they have picked to pay it first. That way they can then charge the robbery fee of $35 for each NSF. I have had 5 NSF fee’s taken out of my checking account in one day which is the maximum they can do ($175) and then they wait till the next day to take out more if need be. This should be totally against the law. I have had over $500 – $1000 just in NSF fees taken out in one month and when I go into my bank and complain they usually have some answer why it’s justified and tell me that it was the general public that wanted it this way, that the larger amount transactions would be paid first even if they were made a day or two later than the smaller ones. Well, I have never gotten anything in the mail or from their bank per internet for my opinion on that matter. WOULD CONGRESS PLEASE STEP IN AND STOP THESE THIEVES STEELING FROM THE GENERAL PUBLIC AND THEIR NOT EVEN USING GUNS TO DO THIS!
i got hit with 3 35 dollar fees for a 3 dollar, 5 dollar and 9 dollar transaction. 105 bucks for 17 dollars overdrawn. needless to say, i left the bank. Whats sad is i work for them.
Yes-I’ve been hit too–with money that has been taken out of my account as a direct deposit, and they claim it needs to clear. CitizensBank is the worst offender for making money off the bottom of the food chain.
I was hit with 3 overdraft fees on the same day for $5.00 (in total). So the bank made $105.00 for $5.00 that they had to pay because I didn’t have enough funds. That just doesn’t seem fair. I rather they tell me that I don’t have enough money at the register. I take the embarrasment instead of making the rich, richer. That is absolutely ridiculous. I understand that the bank has to make money but it seems $105.00 for $5. To say the least, I am frustrated.
I had this happen to me with Wacovia–I will tranfer the money myself from my back-up account–but when I got home they had already withdrew the amount and charged me a $35.00 overdraft fee and a $10.00 transfer fee-which I think is not fair the money was availbale in my savings account.
I have OD protection, but also have money in a savings account. I was recently hit for $35 fee and deposited cash to make up difference. then fee was posted and to pay the fee the cash was not credited yet and I was OD’d again. they made $70 on that all over a $6.75 overdraft. this despite the fact that there were several hundred dollars in my savings account. When I went to bank office they told me I should have put more in my account. and they had already returned a fee and only one per customer per year
heres an idea, put 100$ extra into your account. then ledger this to 0 ballance. If you overdraft your 100$ is there to back you up. If you find on your statements that you over drafted, charge your self fine your bank usually charges and out it in your savings then repay the loan from the 100$. You get exactly the same service the bank provides and the fines you pay go into your pocket.
Sorry for the sloppy post, im working and trying to be furious at this articles topic lol.
Its like a really over the top mafia. You owe us 23 cents, now give us 35 bucks…is that fair? You should have to pay the amount back, with a percentage, or they shouldnt let you overdraft. If i dont have the money, i dont spend it. The same reason I own no credit cards. If I cant afford it, dont get it. Simple as that.
When I initially opened my bank account, I was offered overdraft protection for my account, and declined, as it was essentially a credit product that I had to apply for. I was then informed that in the event of an overdraft, the bank may or may not pay the overdraft item to the payee, but they WOULD charge $33.00 regardless of whether they paid it or not. So, in the event of the overdraw, not only would I pay the fee, but any retured charge/check fees charged by the payee should my bank decide not to pay the draw.
In an instance where charges were debited from my account before a deposit made 2 BEFORE were posted, I was charged $33.00 for each of 4 different PENDING charges totalling less than 29.00 dollars. It was the bank’s assertion that the possibility of them paying the charges was the same as having paid them, and at the time that they may pay them, the deposit may not be posted to my account, so I may be overdrawn at the time of payout. In short, the possibility that I may or may not be overdrawn on my account by up to no more than $30.00 was going to cost me $132.00 in fees. Adding insult to injury, they charged me, I kid you not, an Excessive Fee Fee. That’s right…they charged me $3.75 for having to charge me $132.00 in fees. After a long and vociferous conversation with the bank manager, you better believe I got the charges reversed. It was clearly an unethical practice, and should have by all rights been illegal. hopefully under new legislation, it will be.
Oh, and I haven’t even let myself come close to overdrafting my account since this incident…
2 times a coffee at and a sandwich, my daily 3 transfers, around 100 dollars that day, asked the back to get rid of this and deny a transaction when theres no money on the account but that was not an option, apparently these are manadory loans that come at a rediculous cost
I’m so thankful you did this story. We are closing our accounts with Bank of America today and switching to a credit union, specifically because of overdraft fees. They have cost us hundreds over the last year. ($35 fee when my husband bought a .99 cent song on I-tunes comes to mind) They know most people are living paycheck to paycheck, instead of making money on deposits, they will make it on fees.
Banks say that they charge us these fees because they are viewed as “Mini loans”.
When I make a transfer from one bank to another, the withdrawl hits the first bank immediatly. However it takes up to 11 business days to be credited at the other bank. Isn’t this a “mini loan” that I am making to the bank that I am transferring too? If so, where is my $35 fee? If not, where is this money at for the 11 days? This is not fair to consumers who need the money much more than the banks do.
Happened to me at Associated Bank. I had an incorrect insurance amount drafted from my account. They cleared the biggest charge of the weekend first (although it was made last) and they dinged me $29 for each of 8 small charges and $25 a day until I checked my balance two days later. I complained that I didn’t know about or want the overdraft coverage but they didn’t let me opt out, so I went to a credit union.
I have been hit by this fee numerous times. Sorry… not everyone carries their checkbook with them all the time. Also, why is there a delay in transfering of funds? This is the 21st century. It should be instantaneous. Banks say they protect your money, but really they are out there to nickel and dime you every chance they get. I can see a $10 overdraft fee, but $35??? These and other fees may seem reasonable to some people (The people who always have a large money cushion to fall back on), but when you already have enough trouble keeping money in the bank, living from paycheck to paycheck, the last thing you need is the bank taking more.
OMG! It’s about time. The banking industry has been robbing us for years with the perception of over draft protection. I had been hit with $325.00, in overdraft fee’s from BofA. They indicated the reason was because the merchants I had visited place holds greater than the amount billed. They charged me for the “Possibility of being over drawn”. When the charges did post, minus the overdraft fee’s. I had more than enough in my account. They were only willing to remove 25% if the fee’s as a courtesy. Wachovia is guilty of the same thing.
30 CENTS = 35 BUCKS, THEYRE NUTS. aND WHENi GET TO THE COUNTER, DENY ME!!!!!!!! ITs the banks fault for letting someone charge our cards. If you have an overdraft and for some reason you dont know, you get hit. and hit again. I think if you redeopsit the money within one business day, there should be no fair. Bank of America sucks like that. Completely unforgiving. Thats where they make their free money at 35 a whack. How many people do you think OD on a daily basis? lets say its 500 (a small # considering the # of clientel) Thats 17500 bucks! Crazy and stupid.
Here’s the biggest scam of all with these fees. Banks will actually process the LARGEST payment first – so say this person had transferred $400, it didn’t hit, and he had only $10 available. He has four transations, one for $40, and three for $2. They will clear the $40 first, and then the $2 transaction, resulting in FOUR overdraft fees instead of the ONE that would have been assessed if they had cleared the lower transactions first.
The banks justify this by saying they would rather have a mortgage payment clear, which is a blatant lie. Their policy is to take the consumer for as much money as they can.
I switched to ING online bank(which doesn’t do this “overdraft”) when I got hit with $300 worth of overdrafts because my automatic deposit didn’t go in as expected when I was off on vacation. The total ended up being -$1650.00 Wachovia refunded one of these but refused to back off on any more despite the circumstances.
This shows you that these are not for our “conveinience” the are money making machines for the banks. They could charge only one of these fees per a certain number of transactions or only allow a certain number to go through. This would stop all of the extra money they are making doing nothing though so I don’t expect them to do that. It will take laws and outraged customers to get this changed.
Overdrafts Fees are not Interest Rates; they are penalties for not managing your checking account. I don’t understand why people think they can buy things for free?
I have Bank of America and I deposit CASH and the still hold it (when I complained, they told me I have to specifically ask them to credit it immediately, they have since recently changed this policy)and they tout their website for banking as “being up to the minute” when in reality, they back date the charges to the account. Over Christmas, I had over $3k in my checking account and was back east visiting relatives and did some shopping at an outlet mall. I bought a purse, found one I liked more at another store, so I returned the original one I bought. This all transpired on 12/29.Fast forward to Jan.8th, and I still didn’t see the charge back to my account and now had an overdraft. When I went to complain at the bank the next day, it mysteriously popped up in the online banking and dated 12/29, when it hadn’t been there the day before. I also have my overdraft protection linked to my savings account, which I keep a minimum balance because I get a better interest rate with their cash maximizer account and they don’t ding me for having less than $300 in my savings, well, I was overdrawn by $.50 in my checking and because I had less than $50 in my savings ($48 to be exact) they would not cover the $.50 and I got a $35 overdraft fee. Its ridiculous. Their excuse…You have to have at least $50 in your savings account for them to be able to transfer funds. I sat with a personal banker when I orginally set up these accounts for my needs and was told repeatedly that I wouldn’t be charged certain fees, and I get charged for them monthly and every time I go in to get it rectified, it happens again the next month. It is so frustrating, especially when the money is there, its MY money, yet they want to ding you for every little thing!
My bank: Bank of America issues $35 fees even if you purchased a 99 cent item. Up to a maximum # of charges per day. When this happened to me it sent forward a domino effect when my direct deposit went through on pay day. Then I did not have the funds to pay my bills, which were setup to automatically come out of my account. This snowballed to cost me over a thousand dollars in fees by the time it came under control. To top it off I had plenty of funds in my savings account to cover the original fees. The accounts were supposed to be linked. Unfortunately my checking account was in a different state then my savings and were not linkable. It seems the person who signed me up to link my checking and savings missed that. After spending hours and days on the phone with BoA reps, I was forced to contact the Better Business Beareu and explain my story. In the end the President of Card Services contacted me and refunded all charges since I was told my accounts were linked when I opened up the savings account. The story had a happy ending, but mostly only due to BoA’s original mistake, my perseverance, and the BBB’s involvement. Any charge that is less than the fee, should incur a smaller reasonable fee. Especially when the Bank has programs such as “keep the change” to encourage you to use your debit card everywhere for everything.. hmm.. sounds like a money-making scheme to me..
Bank of America is notorious for this type of transaction fee – $35 – even if you go over your account by 1 penny. I have asked them if I could opt-out and I always get the runaround by their tellers, saying that the Overdraft Protection can be linked to my savings. They do not understand that I do NOT WANT ANY Overdraft Protection. Not only that, but their website is not updated 24/7 and is 3 days behind. So Bank of America cannot use the excuse that the web site is there for the consumer. They don’t even update on the weekends. Bank of America is ripping people off – plain and simple. For a person like me who lives with a meager income, one cent over my account will ruin me financially.
I was charged about three hundred dollars in overdraft fees by Fifth Third. I made about 7-8 purchases in one day, most of which were under five dollars, and they charge me 35 dollars per overdraft and five dollars per day. I knew that I didn’t have a whole lot of money left in my checking account, but I figured that they reject me and then I would just use my other debit card, which did have funds in the account. As soon as I discovered the overdraft, I transferred money from savings to cover the overdraft as well as the fees. Then, I requested that they remove the overdraft protection from my account, so that I would just be rejected if I did it again, and they refused to remove it.
I am in the process of switching banks this week precisely because this happened to me last weekend. An automatic payment that Bank of America was supposed to withdraw from my account on July 31st was not posted until August 5th. I figured this was because I asked them to postpone the payment until my next payday, August 7th. The entire weekend (Aug 1-3) I spent about $100 dollars at a bunch of different locations with my debit card, knowing from my online checking account statement that there was plenty of money. On August 5th, the payment was taken out, but because the date of the payment was written as July 31st, Bank of America charged me $35 for each and every transaction the entire weekend. This has amounted to over $400, more than half of my next paycheck. I’m not sure how I am going to pay any of my bills this coming week nor be able to eat.
Thanks a lot, Bank of America, for once again making our lives extremely difficult.
I had an account with Compass Bank. I made a deposit to an account with a postive balance. I paid a couple of bills online, bought groceries, a couple of burgers and a few other things. In total there were about 11 transactions not including the deposit. The amount I spent DID NOT EXCEED the amount I had on hand and the amount I deposited. Compass bank held ALL of the transactions until all the debits had cleared and rearranged them so that the largest transactions would come out first. Only after all the debits were through did they credit the deposit. They withdrew me by the time the second transaction had hit and continued to withdraw me for every one after that. Including the deposit – that would have kept my account positive – I ended up with a negative balance. They turned it over to collections and that is now on my credit report. They are thieves and lower than pedophiles. I hope all involved end up in jail.
Bank of America is the WORST offender. I am in the process of moving five accounts from them. They charged my son $105 in fees for a $.02 overdraft caused by a hold, not a real charge. The first fee they charged for the two pennies was $35 which caused about $20 in other small debits to all be NSF, hence two more charges.
The Bank Manager (at the Fry Road & Morton Road location in Katy, TX – BoA are you listening?)pretty much told my husband that they didn’t really care about fair and right…and to take a hike. So we did.
It’s criminal in my book.
I don’t have much of a problem with the fees because they should never kick in (i.e., you should not overdraw your account). My biggest problem is situations like the one Terry Read experienced where the same bank “transfers” the funds taking them out of the one depositor’s account on Friday but not puting them into the other account until Monday. When depositors pull that stunt with the banks’ money, it’s called check-kiting and the customer gets arrested. The article should have said the name of the bank.
I’ve been hit with them, too.
I support the idea, but when they charge you $35 for a $5 overdraft, it’s abusive. The overdraft fee needs to be in proportion to the overdraft amount, not in the 100 or 1000% range, based on the amount of the overdraft.
I have had an account that I had over drawn by just a couple of dollars. They charged me the $35 fee, but because of the fee I had 8 pending charges that had not gone through yet. It became a rolling effect creating 8 more $35 fees per transaction. Costing me over $300 in fees. They should have charged me over for the one transaction and left the pendings alone.
The most onerous of this is the practice of clearing “largest first”. I’ve seen $200 in overdraft charges on a grand total of about $5. It’s my fault for making the miscalculation due to forgetting about an auto-payment, I know. The banks already “loan” you the money, they just make more money this way. It’s not even a matter of “turning the payment down”: They’ve proven that they will loan you the money. Now, you do the math: $2 debit, $35 fee. There’s just something about that that’s wrong. I understand the principles of profit, but this is just wrong. Kick a man when he’s down long enough, don’t be surprised when he bites back via legislation.
Yes, I’ve been hit with the fee but is almost a good thing.
If I make a mortgage payment and during the transaction I’m short money, the bank will provide this service – pay the mortgage company and charge me $31. If they did NOT do this, I would assess a late fee from my mortgage company which would be both higher than $31 PLUS affect my credit with them. Same with credit cards. If you’re late, not only will they charge you a late fee, they’ll up your interest.
The $31 bank fee is almost a bargain !
Why do you think most overdrafts happen? I’ve been un/underemployed for 2 years and it’s been a titanic struggle to make ends meet, make the mortgage, car payments, electricity, and hopefully have some money left over for food. And in that time when I’ve often wondered how I’m going to be able to hold on to my home, Bank of America has gotten rich off of me with more than $1,000 of overdrafts this past year alone.
And it gets worse. Way worse. Bank of America, and other banks, have worked out the strategies to not only hit customers once, but many times with overdrafts, while making it difficult for their victims to get out of a an ever deeper hole.
Things like… keeping a transaction pending for more than a day, so that when one transaction overdrafts, they’re overdrafted too. And sorting the transactions so you’d have to pay the biggest one first, that same day.
Bank Of America has gotten rich off its poorest customers. It views us as milk cows that it can slaughter at its whim.
This must be stopped, and they must pay.
A few years back I got hit with an overdraft charge from Washington Mutual. A paycheck had been directly deposited and reflected online in my account so I used some of my balance to buy something on my debit card. They credited the purchase before the deposit (both on the same day). I complained and the branch manager promptly removed the charge.
I still have my paychecks deposited directly and sometimes use the money the same day with no further charges. However, when I check the transaction details the debits always show up before the credits both made on the same day. My transactions sometimes look like I spend more than I have, even though the deposits always occur first thing in the morning. This hasn’t cost me anything but it does make me nervous to see transactions misrepresented that way.
IT THINK OVERDRAFT FEES ARE A ROBBERY
SOME BANK CHARGE TOO MUCH SOME TIME THE OVERDRAFT FEES ARE MORE THAN THE AMOUNT YOU OVERDRAFT.
Look up your bank’s CEO’s salary… That is from these fees!!! They allow you to go into overdraft and then charge you $35. They are giving you a loan you did not ask for. If my account is empty, the n the ATM should deny me – Not Bank of America – they give you a buffer as they call it. Buy a gatorade at the 7-11 and pay $3 – no yo9 pay $35. Then Bank of America will charge you $40 to close your account!!!!
I had gone into the negative with checking account without knowing it, and went on to purchase several songs on iTunes over the weekend. Each song was charged to my debit card (bank) separately, so I had about 7 charges of .99 cents, each with an accompanying charge for $25 overdraft.
Paying $181 dollars for those songs was just too much to believe.
I called my bank on monday and expplained to them.
Luckily, they were understanding about it and removed the charges promptly.
I had this problem with Bank of America. I was hit with 13 overdraft charges at $35 each. I didnt realize that my account was so low when I made the purchases. I had transfered money from a savings account into my checking (which is tied to my check/debit card), but because the deposit was still “pending”, it did not register my deposit right away. I ended up using my card throughout the weekend and getting slammed with all the overdraft fees. Not once during the entire weekend of using my card was it ever declined due to insufficient funds. I think that it should have been. I think that I should have been warned that my account was low or that the deposit was still pending. Upon speaking with my local branch about the $455 in overdraft fees and explaining to them what happened, I was told not to use online banking to balance my accounts. They set me up with an overdraft protection plan where if my account does become overdrawn again, it will automatically withdraw money from my savings account to cover the charges. Basically, I just wish that Bank of America offered a text messaging service or some other kind of service that lets you konw when your accoutn is overdrawn or about to be overdrawn. Currently, i know of no such service.
This happens when there is a delay from the time of the transaction to the time of it posting. Because of this your debit card won’t be denied when you go over, it will be denied when you went over two days ago and posted 10 transactions at $35+ each for the overdraft! The system is designed with this delay. If they wanted to they could change it so that a hold is put on at the time of the transaction for the amount just as a credit card does. But they don’t want to because they make money from this.
This is a real problem for the consumer. The bank charges additional fees to process your money through debit cards, charge cards, and regular checking applications. Even when you have direct deductions the bank charges interest and fees. I believe in this most current tight credit market that the banks are in a win fall cirumstance: the are tighting credit, making the consumer pay a higher interest rate based on his or hers credit hsitory, and the banks are using tax payer monies to do this! not their own. This is a reaL SCAM!
Here in Florida I use Riverside National Bank. There overdraft fees are $90.00 plus dollars and some change. I went on vacation did not check this balance (true my fault) My account was over by $6.00 I had to pay the 90+ dollars plus $5.00 continues overdraft fees added on daily. That $6.00 cost me $130.00…. When I started banking with Riverside the overdraft charge $34.00 that was about two years ago.
i was hit with 5 overdraft fees a few months ago on the same purchase, only a $5 dollar overdraft turned into $175 in fees because i was unaware of that small $5 i overdrew.
I cannot stand automatic overdraft protection (I do however enjoy the OD coverage between my savings and checking accounts). I would much rather endure the so-called “embarassment” of being denied while trying to buy a $1.75 soda at 7-11 than be hit with a $35 fee.
Well, I personally do not have a problem keeping a balance in my checkbook. If you make a transaction, write it down in your ledger. How difficult is it?? If you don’t have the money, don’t spend it!!! I can understand a mistake here and there, nobody’s perfect. Take responsibility for your own actions of not keeping a balance in your account. If you have fees to pay, please don’t blame the bank for your mistakes, take responsibility and pay your fees.
I work in banking and have for over 11 years now. My first employer is one of the largest banks in the country and at the time I was a Branch Manager. In one of our regional manager meetings several Branch Managers expressed thier unhappiness at the increase in overdraft fees. Our Operations Manager looked at us and said “do you honestly think our bank is going to lower the overdraft fees or change thier policies on when to charge an overdraft fee when the bank made $35 million in overdraft fees last quarter”. It’s a cash cow for banks and in today’s banking environment they are not going to give it up, its easy money for banks.
When I lived in California, if a deposit was made and had not cleared, but a check was presented for payment the same day, NOTHING was paid until the deposit cleared, so there was no overdraft made, hence no fees. The time it takes to clear from one bank to the next is 24 hours. To me it is ridiculous that a bank will put through the withdrawal before the deposit, just so they can charge a fee and call it “policy.”
Yes… and on top of that… why is it that banks put the biggest charges first… then the little ones.
During Christmas, I was charged about $350 in overdraft fee for a mistake on my part, but bank placed $35 fees 10 times. If they would’ve put the biggest transaction last (and it was one of my last purchases), I may have had to pay 1, maybe 1 fees.
Of course, the bank refused to refund any of the fees.
I find it unfair that Banks use the banking system completely to their advantage. They expedite transactions when its in THEIR favor, but not when its in the consumers favor.
We live in the Digital age, transactions should be posted most immediately.
“Corporation, noun, An ingenious device for obtaining profit without individual responsibility!” – Ambrose Bierce
Here in Canada, banks offer overdraft privileges for a small monthly fee of about $4 (for a one thousand dollar limit) and then charge daily interest for the actual period of the overdraft. The interest charge on a typical overdraft will be just a few cents.
I had my identity stolen and had three charges taken out of my checking account by the use of my debit card number. My own checks bounced. I was refunded my money from these transactions by the companies that things were purchased from but my bank wouldn’t refund the overdraft charges.
I have to agree that the way banks do these transactions is a load of crap. Recently, I had a problem when I had made three electronic purchases, and one check written.
There was also a charge on my account from an insurance policy that I had canceled…
SO there was enough money in there for the three electronic debits, and the check written. The electronic ones were done first, yet the bank cleared the check first.. because it was the bigger amount. I ended up over $300.00 in the hole because the bank clears the larger ones first.
I think the banks need to look at the customer’s needs, and try and get as many of the charges to clear BEFORE they start charging the OD fees. It is ridiculous.
MY BANK HIT ME WITH 4 OVERDRAFTS AT ONE TIME.I HAD SMALL ATM DRAWS AT THE BEGINING OF THE WEEK THAT THEY HELD UNTIL I MADE A LARGE CHECK PAYMENT ON RENT 5 DAYS LATER.INSTEAD OF PLACING 1 OVERDRAFT ON THE LARGE ONE THEY CHARGED OVRDRAFTS ON ALL THE SMALLER ONES WHICH SHOULD HAVE BEEN ALLREADY PROCESSED.iT COST ME OVER $200.00.M&T BANK OVERDRAFT FEES AT $37.00 EACH
I had this issue with Bank of America years ago. Due to a typo at my cable company, about $400 was auto-debited from my account which shouldn’t have been. I had no idea I was overdrawn until a few days after my first overdrawn transaction, when I received a letter from the bank. They don’t even bother to call you and let you know that you’re spending money you don’t have. When I talked to them to explain the situation, they wouldn’t cut me any slack. I left that account open just long enough for the cable company to give me my money back, then I went to a credit union where my overdraft fee is $3.
I used to have Wachovia and got hit with an overdraft WHEN THERE WAS STILL MONEY IN THE ACCOUNT. After calling and harassing I got it reversed, but I closed that account immediately after. Wells Fargo charged $35 a pop for overdraft, plus $5 a day for every day you were over. Now I have ING, and the overdraft protection is a line of credit, which charges 9% a year. The most I’ve paid for an overdraft is $0.06. Lovely!
This has been going on for 30+ years. Where’s the news about why this is even allowed to occur. Corporate welfare is the # 1 problem in the world today.
Mark Twain said it best, “A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.”
During one particularly bad year we paid over $6,000 in these fees. Stupid consumers, yes, but…we tried to Opt Out of this ‘convenience’ and they would not allow it. That is the fact I find disturbing.
Of course, ditching the debit cards is the easiest way to solve this problem. Go to a strictly cash system people…if its not in your wallet then you can’t buy whatever it is you want at that moment. Period. Banks serve a purpose, but they are not geared towards Joe Consumer.
I haven’t been hit with overdraft charges, but my sister has. What drives me crazy is that her bank (and most other banks) put the largest charges through FIRST. My sister had enough money in her account (without the deposit she had just made that hadn’t cleared) for 3 out of the 4 checks/debits, but because the bank put the biggest check through first, she got hit with 4 fees instead of 1 overdraft charge.
ummmmm…yeah they give you the money first before they credit a deposit on the same day. what’s the shock here? That deposit has to CLEAR before it actually is money in your account. What if that check that you deposited bounced? Just because you gave the bank a check doesn’t mean anything. In the meantime, YOU asked for a loan by virtue of that debit card purchase that you did not have the funds to cover. That service costs money. Is the fee out of whack? Sure, but if you think so, THEN DON’T ASK FOR THE LOAN! I have never paid an overdraft because I know how much money I have. Try it and stop whining.
America has turned into a bunch of finger pointing whiners…seriously. Stop blaming others for your actions.
Yeah. .and it’s ridiculous!! First the fee is hefty.
But guess what.. if you put money in the same day you overdraft.. they take the money OUT first before they credit your deposit and you get hit with the overdraft fee!! INSANE!
Banks are crooks when they do something like this
It is absolutely ridiculous when the bank does this. It is especially hard now on people that are struggling to pay for their groceries and gas. If they make a mistake it could cost them hundreds of dollars very easily. I also hate that they if the bank get multiple checks they will put the biggest check in first which could cause overdrafts on the smaller checks that may have been covered by the money of they would have done the smaller ones first. I know they do it that way to get more overdraft fees for each one of the little checks. I had this happen with some RedBox charges once for a little over a dollar piece. There were 3 of them and we were charged $35 for each one. So for borrowing $3 for a day I was charged $105. Figure out the interest rate on that one. The first check was a large utility bill that the company was supposed to hold on to for a few days until I got paid again and they never did. These banks are completely taking advantage of the people that can least afford it.
I think banks are robbing the poor with that much of a fee and overdrawns are going to get worse as the economy worsens. Banks you stop this robbers go to jail and your just like them. Thanks Bobby Moore
Bank of America charges $35 per overdraft. If you have a few a day until you cover the balance you will pay a lot of money. Yep, this just happened to me. They waived the first but still had to pay all the others. The fee is very, very expensive.
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How many of you have contacted your How many of you have contacted your congressman/congresswomen about these Usury tactics. Please do so immediately.
I believe an active campaign to prevent these horrendous predatory fee practices by the banks (such as 1. charging overdraft fees on each smaller check
first rather than the one larger one, when they are not sending the checks back anyway, 2. crediting deposits AFTER debits, 3. holding deposits for days even if drawn on their bank, 4. counting debits and over drafting account even though the transaction was cancelled or never completed) of hiding rates that far exceed 4000%, far greater than Payday loans fees and charges. At least you choose a payday loan vender. But, they both prey on the poor, unlucky and uneducated.
Michigan restricts the rate of interest on personal loans to 7% per annum, most states have similar Usury statutes. However, the powerful banking lobby, funded by the 19 Billion in late charges and the 700 billion Bailout money, have convinced congress with campaign contributions and lavish trips that usury laws are not needed.
If you need help contacting your congressman/ congresswomen or would like join a possible class action suite, please call me email me Steve @ Vear. com
Do the RICO act laws on “loan sharking” (charging twice the state usury rate) apply to banks? If so, the 19 billion the banks made last year on excessive overdraft fees could be the result of Racketeering in violation of Racketeer Influenced and Corrupt Organizations Act of 1970 (RICO) So all the credit card companies set-up in state that allow usury