Bank Overdraws (ATM and Debit Cards) End!

Miscellaneous and Personal Stuff I Must Share
41

It’s about freaking time.

Banks will even charge the $35 fee when you attempt to take money out of their ATM, and it is declined. Yes, an attempted and declined ATM withdrawl from a checking account is charged an overdraft fee.

Think about that for a minute and then try to defend it.

My bank continues to allow purchases on my debit card up to two or three hundred dollars in debt, over multiple days.

I’ve spent two or three days slowly accumulating overdraft fees and not even been aware of it. The fact that they have been able to front me that kind of money and then charge me exorbitantly for it without notifying me is close to criminal. This is a change that has been a long time coming and is most definitely the right thing to do.

For those who are worried that their banking is now going to cost more because of a lost revenue stream for the banks, I bleed for you, I really do.

42

Anyone with a brain could predict it. “Mortgages are at historic lows!” and then these dumbasses take VARIABLE rate mortgages that can go up as rates go up. I had that fight with a former co-worker. Take the fixed rate mortgage at 5.75% back in 2006? Oh hell no! Let’s go for the variable rate on this house we’re already massively overpaying for! When I pointed out what rates had been in my lifetime and what his mortgage could allow to happen - not to mention the odds of his house being worth that in a couple of years - he scoffed at me because all he cared about was what his payment would be NOW. He straight out said that he wasn’t worried about what happened 2-3 years down the road, he just wanted the lowest possible payment TODAY. Now is that the bank’s fault? Fuck no. It is entirely his fault.

Today, his house is worth about 60-70% of what he paid for it. Fortunately for him, his rates probably haven’t gone up, but someday they will, and he and his wife will probably end up defaulting or just walking away.

43

The law says they have to tell you what they are doing and you have to opt in. What is wrong about that? It is enrolling you in a program that can cost you money, without telling you, that is wrong.
Not long ago it was a 5 buck charge for a check bounce. It just keeps on going up. There are no laws stopping them from cranking the charges up more. They will.

44

Assuming this is meant in the snarky sense I’m taking it, that’s not exactly engendering sympathy, even though your bank was indeed being dickish. It’s not the fault of people who haven’t had this problem that banks found a very predatory way of cashing in on the misfortune/bad planning/hard times/totally not paying attention and overspending like whoa/whatever other reason of others. The banks will just be turning it all around and slapping people who’ve been very careful and/or fortunate, and that’s still no way to treat customers.

My bank sent out the panicky ‘OMG change in your debit card!’ repeated letters to my house. Due to the exceedingly fine print and strangely-worded way, I thought this meant I had to opt in to having overdrafts being handled out of our savings account (for a very small fee). Nope. Nice tricky way of wording it though, guys, thanks.

45

If Warren gets the job in the Consumer Protection Agency ,one of the things she said she will address ,is the microscopic pages of information that banks and loaners provide to obscure instead of inform. She is a breath of fresh air against the group of financial thieves .

46

Would you complain if these same people had simply stopped going overdrawn? Because that would have had the same affect on the banks bottom line. It is not the fault of the charge paying customers that the banks business model relies on unethical charges to make the required profit, and that now that revenue stream has closed EVERYONE will have to pay their share of the required income.

47

Well, that’s a tough one. On the one hand, if the banks never had a chance to get used to all those excess fees, we wouldn’t be talking about this. OTOH, I really don’t think that’ll ever happen. I can’t imagine all of the US suddenly being so financially responsible that the banks can’t make their money off the fees. There’s always going to be people bouncing checks. Just like your city/county/state government will always be able to count on money coming in from traffic violations. No matter what you do, there will always be that subsection of drivers racking up two or three speeding tickets a year and parking illegally.

On the other other hand, I’d guess I’d rather have to pay more money because people started being responsible then pay more money because the irresponsible people dug themselves so deep I have to help them out. Also, if suddenly all those people became more financially responsible, I’d think we’d see savings in other places. If suddenly no one bounced checks any more and no one overdrew their account anymore, then banks would go back to really wanting your business and fighting over it with lower rates on checking accounts and higher rates on savings accounts.

48

I have had two overdrafts on any account of mine in 32 years. Both of them happened before the age of 19, therefore no overdrafts in 30 years. It isn’t that hard to avoid overdrafts, people.

49

I’ve only overdrawn my account once in the last three years, at least, and it was because one transaction had gone through later than I expected it to, and the bank actually waived the fee when I asked them nicely if they could – I was told I wasn’t on “the list.” I guess if you were on “the list” you were expected to bend over and take it.

I’m super careful about it, but I do live check to check and can get pretty close to the line. I opted out; their website really wanted me to opt in, but screw them. I would rather wait a few days to buy something instead of having to pay back the actual overdraft plus a fee which has always been larger for me than said overdraft, the few times I’ve done it. Silly me.

50

Eh, it can be a bit more convoluted than you think, given the arcane rules of how they process your transactions. I got nailed in more fiscally lax days by the following:

  1. Transactions after 3 p.m. on Friday get settled at 8 a.m. on Monday
  2. First, withdrawals are processed, then deposits.
  3. Withdrawals are processed in the order of highest to lowest. And, yes, the reason they give is it’s “a courtesy” because it could be embarrassing when your rent check bounces. Thing is, my bank used to decline debit card withdrawals if the account was NSF. And they’d happily bounce checks, as I found out in college. But that was three banks ago (NBD became First Chicago became Bank One became Chase). So, somewhere along the way, the rules had changed.

So, here was my scenario: I made three little purchases and one large purchase over the weekend. I deposited some money on Saturday evening, and then on Sunday decided to use that money to buy the larger purchase.

So, on Friday night, I had $50 in my account. I bought something at McDonald’s for $5. Bought a book at the bookstore for $15. Took out $20 in cash. So, I should still have $10 in my account. Saturday, I go ahead and deposit $200 in cash (just to give myself more room to work with in my checking/debit account). Sunday, I decide to buy something for $100 or so.

So, by my accounting: $50 + (-$5) + (-$15) + (-$20) + $200 + (-$100) = $110

At no point am I overdrawn. This is the chronological accounting of the weekend’s transactions. I figured, hey, we’re in the 21st fucking century here, there’s time stamps on all these ATM deposits, and even so, why in the flying fuck would they NOT process a cash deposit BEFORE the withdrawals? Well, we know exactly why.

So here’s how their math worked out:

Initial balance: $50 + (-$100) = -$50 OVERDRAFT $35 fee, and down fall the dominos: the next three transactions all get overdraft fees. So, before we get to my deposit, we’re at -$90, with 4x$35 in overdraft fees, for a total of -$230. The deposit goes through, and I’m still in the hole $30, rather than being up $110 if they processed my deposit first or if they simply followed the chronological flow of the transactions. I mean, seriously, there’s no good reason I see to process Sunday’s $100 withdrawal before any of Friday and Saturday’s transactions. I mean, hey, even if you discount the deposit because, hell, anyone could put in an empty envelope or bad check and say it’s $200 to avoid overdraft fees, chronologically, it works out to one overdraft instead of four.

They ended up reversing two of the four charges, but that left a bad taste in my mouth, so I transfered most of my banking to another bank, which isn’t much better in terms of fees but, luckily, these days I don’t really need to worry about my checking account.

51

I’m thrilled with the change, although I haven’t overdrafted in several years. My bank was sending all these notifications about it, tying it to the overdraft protection. When I read all the literature, it basically stated that if I ignored everything, the declining debit purchases when there’s not enough money would take effect by default. Being reasonably lazy by nature, I went with the default: Don’t do a damned thing.

Instead, I kept getting phone calls at home and they insisted I come into a branch and sign a form that said I understand how it works. What a blooming waste of time and energy!!! Even when I told them over the phone that I understood it and that I wanted them to decline, they wanted the form. Idiots.

52

Y’know, I’m not sure about the argument that since they’ve lost this income stream, they’ll raise fees or lower savings interest rates or something to make up for it. It’s not like the bank has a target amount of profit and they’ll do whatever it takes to make that much profit. Rather, they want to make as much profit as possible. If they could have gotten away with adding those extra fees or whatever, they would have done it even before the overdraft rules changed.

53

I think that this is the next in the line of bullshit that needs taken care of. This isn’t the 1930s where Banker McBevis needs to enter in your deposits on his ledger pad.

The bank can surely deduct your debit purchases on weekends, why not deposits? Do the computers need weekends off, or can only one side of the program operate outside of business hours?

54

I would agree. There is no excuse for a large bank to NOT be processing things 24 hours a day, 365 days a year. 3am on Christmas morning? Why does the computer care? It’s still there and operational.

55

It’s not even that. Even if they had just processed my debits, completely ignoring my deposit, and did it in chronological order, it would have led to only one overdraft (the one on Sunday), instead of four overdrafts (since it went from highest-to-lowest and all the transactions between Friday 3 p.m. and Monday 8 a.m. were considered the same business day or something like that.) This was in 2004. I had even been tracking carefully my account balance and amount available over the weekend on the ATM receipts and was told, point-blank by the bank when I complained about all this, that the account balances may or may not reflect the reality of what’s in you account. WTF?

And, in fact, the receipts were correct if the weekend transactions were processed the way any sane individual would process them: chronologically. It’s only after the Monday morning accounting shuffled around the order of the transactions that the bank’s reality differed from the universe’s reality.

56

My wife and I found out the hard(and expensive)way that even though our Social Security is direct deposit, that doesn’t mean we can use our debit card that day. Even though we can call at 3 in the morning and get told the account balance is $xxx.xx.

Had to fight tooth and nail to get those fees reversed.

57

The ONLY logical explanation of why pulykamell’s bank processed those transactions in the order that it did was to get and maximize the overdraft fees. And that’s predatory. The bank was not operating in good faith. If bank users get withdrawals processed over the weekend, then they should have every reason to believe that their deposits will be processed, too. And the nonsense of processing withdrawals first is just a way to try to force people into the hole.

If a bank does not honor a check or a debit card withdrawal, I don’t think that they have any excuse to charge an overdraft fee. Nor do I think that an OD fee of $35 is in any way reasonable, until we’re talking about a check for over a thousand bucks or so.

The banks went to the well too often, and drew out too much water each time. If they’d been a little less greedy and outright predatory, then these new laws wouldn’t have been proposed. I have no sympathy for the banks.

I remember when banks were able to offer free checking with even a very low minimum balance. Somewhere along the way, the banks got accustomed to dinging their users with fees and charges for EVERY little transaction.

58

I figured the banks were going to lose major dollars when they started sending me notices, both via snail mail and via online messages that popped up before you could to your account information. Of course I immediately opted out of this important “service” but that didn’t stop the notices.

A few days ago, I got a phone call for my daughter. When I informed him that she wasn’t home, they asked for me. Turns out it was our bank (Since my daughter was underage when we opened the account, my name is on the account as well), trying to talk her/me into signing up for overdraft protection. This, after the umpteen letters and digital notifications! I told them no thanks, and they went into a spiel that basically said, “You’ll be sorrrrrrry.”

What a crock of crap.

59

Here’s another one, more recently. I have my credit card, savings, and checking accounts at Bank of America. Every two weeks I have money coming out of my checking account into a Vanguard investment account. A long time ago, I decided to sign up for overdraft protection, linking the checking account to the credit card account, and specifying an amount of $1800 to be transferred over in the case of overdrawing. One day, I forgot to transfer some money from savings into checking, so when my Vanguard transaction went through, I overdrew by a couple hundred dollars or so and triggered the overdraft protection.

I check my credit card statement a few weeks later and notice a finance charge. WTF? I never carry a balance, why is there a finance charge on this?

What I stupidly didn’t realize is that the overdraft protection is charged as a cash advance. So, I pay a cash advance fee, plus interest from the time of the cash advance (there is no 30-day grace period for cash advances.) So, rather than incurring a $35 fee if I didn’t have overdraft protection, I incurred a $54 transaction fee (3%) and $4.11 in finance charges. :smack: I’ll own that one, for not carefully reading the fine print.

60

Here’s another fun example.

We have our checking account with First Commercial Bank. We also have an overdraft protection program that’s tied to a credit card with the same bank – if we have an overdraft situation, the credit card automatically covers it.

A couple of months ago, we’d accumulated a balance on the credit card due to some overdrafts. I decided to transfer money from the checking account to the credit card account to pay that off.

The same day I transferred the money, some checks cleared the bank.

You can guess what happened. Transferring the money from our checking account to the credit card didn’t leave enough money in the checking account to cover all the checks that hit.

But that shouldn’t matter, right? The overdraft protection through the credit card would kick in to cover the checks.

Nope. The money from our checking account hadn’t been posted into the overdraft protection account, and the existing balance on the card meant it didn’t have enough remaining to cover the checks. Essentially, the bank said our money disappeared from the checking account for 24 hours before appearing in the overdraft account.

I got most of the overdraft fees reversed, but not all. I kept repeating “The money never left your bank. If I’d left it in the checking account, there would have been no overdraft on the checks.” They never could explain to my satisfaction how the bank essentially lost my money electronically for an entire day in the course of transferring it from one account to another.