No. I agree that terms of a contract can violate public policy and be voided on that basis, too. But I don’t agree that processing transactions in a specific order should reach that bar.
False dilemma, and hasty generalization.
Here’s an example of how that practice could really screw the consumer. You have your paycheck direct-deposited into your checking account. The bank policy is to give you instant credit for direct-deposits from your employer so there is no period of “check clearing” or processing - it’s an instant deposit just the same as cash. You also have your rent, utilities, phone, and internet, etc. all scheduled to be directly paid on the first of the month from the same checking account. On the 31st of the month you do not have sufficient funds in your account to pay all those bills, but at midnight your paycheck will be direct deposited.
In this situation (at least as of 5-6 years ago when I had a BofA account) they would hold the automatic deposit until they first processed each and every one of the entire day’s automatic payments - from highest amount to lowest amount. This would result in a whopping $45.00 overdraft fee for each charge and then the next transaction would be the deposit. (from which they deducted all the overdraft fees) This happened to me several times and I’m not an irresponsible spender. Sometimes one must budged right down to the wire, but they were just screwing me for hundreds of dollars on a technicality. There was no actual overdraft except in the way they chose to write their own books.
So then your problem is you think people like Crazyhorse don’t have a legitimate complaint. where as the majority, and the law disagree.
Yes or no, contracts written by lawyers can have meanings, terminology, and implications a nonlawyer wouldn’t expect or be familiar with?
If so is, is a layman stupid if a laywer plays gotcha with a contract, nailing the laymen with something they didn’t expect?
How about if the lawyer nails the layman, who’s generally busy with nonlayer things such as earning a living, famioy, etc. with a huge document, as most contracts do?
Further everytime you install windows updates, software, log on to a site with a changing user agreement, or the like, do you read all the click through agreements? If not by your own definitions you’re stupid.
Look, I think most people will agree that the recent regulations regarding the application of debits/credits and associated overdraft charges were a GOOD thing. I’m IN banking, and I would agree, simply because of two reasons:
- Customer goodwill (the most important)
- The chance of recouping actual overdrafts (still pretty important)
As I have said before, I work for a small bank that never engaged in those shenanigans (though I did work for a Huge Evil Bank whose name rhymes with Segovia, and they did, and it was one of many things that put a bad taste in my mouth about huge corporate banks). Not the point, though.
I am all for most of these new banking regulations. I am a slightly-left-of-center Independent, and I am definitely in favor of keeping an eye on the banks. But please understand–when you’re talking about banks pulling in HUUUGE profits, you’re not thinking of the small regional or county-based banks like the one I work in. Our CEO barely makes 6 figures. Our branch presidents don’t make 6 figures. Our bonuses aren’t insane (we get a month’s pay extra at the end of each year). We haven’t had a cost-of-living raise since 2007. And while the big banks do control more of the country’s money, there are more of us than there are of them.
You want to change how banks run? Start investing in your local and regional banks. The more revenue you give us, the better we’ll become technologically. And there’s no need to pick just a couple of us until we’re juggernauts that are no better than Wells Fargo or BoA. There are ways to get around the disadvantages of small banks and CUs that don’t involve patronizing a bunch of people who will screw you over. And you’ll be doing your local economy a pretty big favor.
This happened to you more than once?
Newsflash: you are irresponsible. If that happened to me once I would have changed my payments to happen a day after the direct deposit to avoid the problem.
Yes. That is why I said “should.” I am expressing my opinion about what the law should be. I recognize the law favors your view now.
Yes, they can have. However, in recent years, the trend has been to write terms more simply. I just got a new cardmember agreement from American Express, for example, and it is not written in what I would characterize as legalese.
So I am not prepared to conclude that the specific agreement here was not understandable to a lay reader.
Well, my primary OS at home is one of two Linux distros, but yes: I do read all the user terms before I click yes. Why wouldn’t I?
Isn’t it about 5 cents a transaction?
This isn’t a question of legality. It is a question of Ethics. Legally you can enter into any sort of retarded contract providing it does not contravene some existing law. The law has no ethical bearing, it is merely the lowest common denominator of acceptable behaviour. In fact it is such a minimum that we found it necessary to enforce penalties against those actions. An ethical business does not operate on the cusp of what is legal, it does what is right by it’s customers, employees, shareholders, and partner merchants in an effort to make things more profitable for everyone. Unfortunately, those days are mostly gone, and now success is not measured by steady growth, employee retention and loyalty, and sturdy finances, but by quick, wild profits at all costs.
The banks are no different and found loopholes to exploit that never existed before. Yet before the loopholes they were still profitable, and sturdy industries because their services were needed. They still are needed. A legal question of right to a specific revenue stream in really irrelevant, we can decide that with a vote at any time. Ethically, though it can get much stickier. Something about charging people for using their own money feels slimy and wrong. The bank has no more “right” or “need” to that particular stream of revenue then I have a “right” to say…charge customers a fee for helping them to their vehicle with purchases. I could put it in little print at the bottom of their credit card receipt and charge them a ten percent gratuity, offer them the service and enforce their signature. No verbal warning at the time of purchase, no big sign making it clear, but the language is there on every slip. every little contract.All nice and legal. Also slimy, underhanded, and blatantly unethical. Would you then think I have every right to go crying when customers noticed I was screwing them for ten percent every purchase?
Again the amount of people this got shows they weren’t notified. Most people do not have the spare time to waste reading pages and pages of legalese, even if it’s getting better it’s still a problem.
You read this every single time you open the straight dope in case there’s any changes?
http://www.straightdope.com/pages/privacy
Every single time? Really? Really?
Log on to make one post and you set down and read this first every single time in case it changes?:dubious:
If not, again, by your own terms you’re stupid.
And if a company won’t change their automatic payment without another huge fee?
I did something even more responsible than that - I dropped their thieving asses and went with an honest bank that doesn’t have the same criminal practices. Since those times, apparently lawmakers have stepped in so it must not have been just me who felt I was getting screwed despite not spending irresponsibly.
Elizabeth Warren was pushing to make credit card agreements and mortgages more simple to understand. The banks have been involved in deliberate obfuscation. Pages of microscopic fine print in Credit card deals has been their method of keeping users unaware .
Who would have thought that simplification would be so controversial? But like Sen. Durbin said, banks own the place. They can jack up interest rates practically at will. There are no rules regarding credit card and banking fees.
The banks blew up the economy and want to recoup their losses at the expense of their customers. They sure don’t want to cut salaries and bonuses.
This depends on what you mean by legitimate. It is legal? I suppose so. Does it serve a legitimate business purpose? Not even remotely, unless you consider “soak my less savvy customers for every penny possible” a legitimate business purpose.
Frankly, this is why we have consumer protection laws, so that people who are not lawyers, or bankers, can do business without fear of being taken for a ride.
If these customers are not profitable enough, refuse their business, don’t pretend to do business with them, and simply hope they screw up enough for you to fine them into profitability.
Irrelevant to the topic under discussion. One might as well dismiss the Eighth Amendment to the Constitution as unnecessary because one may, after all, avoid excessive and abusive punishments for crime by not committing crime.
A more precise analogy would be if the board had a rule against repeating known falsehoods, and the admins lumped repetitions that occurred before someone pointed out the factual error together with repetitions that occurred afterwards, treating the former as equally culpable.
Because loshan posted a rather convincing bit of evidence to the contrary:
(emphasis added)
Clearly, one of the following is true:
-
BoA engaged in deceptive practices.
-
BoA settled because it would have needed to spend more than $410 million to show that it did not engage in deceptive practices.
(2a. Obviously, if BoA had in fact been sending information to its customers describing its overdraft practices, evidence thereof could have been obtained for a sum much closer to $4.10 than to $410 million.) -
BoA is not concerned with protecting its financial assets, and is willing to just piddle money away.
(3a. Obviously, this is incompatible with BoA’s willingness to take flak for imposing the fee in question.)
Wells Fargo seems to be the least of the evils as far as large banks are concerned; I’ve never had a real problem with them, and they don’t go out of their way overly to screw you, as far as I can tell.
Unleash Elizabeth Warren!
I think this is what gets me about the whole thing.
I take the point, being made by Bricker and a few others, that the agreements between bank and customer are voluntary, and that people should read the terms before they sign up for an account.
But i also believe that there’s something fundamentally problematic about a business model whose profit relies so heavily on obfuscation. If your profit level depends on deceiving your own customers into fees and charges that they wouldn’t incur if your practices were transparent, then that’s ethically problematic, IMO, even if it doesn’t violate any laws.
It’s not that different from those “free” credit report services that automatically enroll you in a monthly fee-based program. Yes, if you are careful and read every piece of small print in the agreement, you will probably notice the conditions, but it requires an above-average level of vigilance. It’s clear that the companies themselves are not relying on informed and knowledgeable consent in order to generate income; they are hoping that as few people as possible notice that they’ve been signed up for a monthly charge. They also go out of their way, in their advertising, to make their service look as much as possible like it’s the free credit report mandated by government. This got bad enough that the FTC felt the need to do something about it.
Also, while the whole caveat emptor thing might be reasonable when you first sign up for a bank account, another problem is that banks are constantly changing the terms of their customer agreements, and often do so in such a way that only a very vigilant person will notice the adjustments.
I receive mail from Bank of America every week. Basically every piece of mail i receive from them has something like “Account Information Enclosed” stamped on the outside. Yet, when i open the mail, at least fifty percent of the time it does not contain any actual account information that i might be interested in, but is simply another attempt to sell me more services. When companies send their own customers so much junk mail, is it any surprise that some people might reduce their vigilance and miss an announcement about changing terms and conditions?
Some time ago, i noticed that my BofA checking account, which had previously been free, was now having $8 a month deducted as an account fee. The charge was taken for a few months before i noticed it. Now, i’m sure that BofA sent me a notice informing me of the fee, but i’m equally sure it got shredded and recycled like most of the mail they sent me. I’m pretty watchful about this sort of thing, but i still managed to miss it. I have been able to avoid the fee by simply bumping up the balance to the required level; i’m not arguing against the fee, per se, only against the obfuscatory way in which it was introduced.
As i said in a post i made a couple of years ago, i think that financial institutions should be required to highlight any rate increase, fee increase, or other adverse change to their terms and conditions, in such a way that they are both obvious and written in plain language. And by obvious, i mean announced clearly at the beginning of the correspondence, in red letters, something like this:
Also, with respect to the junk mail argument that i made above, i also think financial institutions should be required to refrain from describing every single piece of mail they send as “Account Information Enclosed.” I’d also like them to be required to mark clearly any correspondence that makes changes to the account agreement.