Tricks to settling a delinquent bank account?

Factual Questions
1

Too late to call the bank collections department, or whoever handles this sort of thing, so I’ll do it tomorrow. Figured I’d ask around here to see if there were any tips on resolving this.

Backstory:

When I applied to get a debit card from my bank, I asked what would happen in the event that there was insufficient funds to cover the transaction. They told me it would be declined. I tried it, to see - and indeed that’s what happened.

Anyway, fast forward a while in the future (2 years or so), and I goofed up - I lent my friend cash I got from an ATM, and then neglected to add that to my mental balance - slipped my mind because it wasn’t money I spent on anything. Anyway, I made a bunch of small, normal purchases - gas, meals, etc. with the debit card. I’d overdrawn, of course, and made 10-14 small transactions overdrawn. None were declined as they were supposed to be.

I can only guess that they either changed their policy silently, or they included it buried deeply in fine print on my monthly statements. I realize that it was my fault for becoming overdrawn, but they changed their policy which should’ve protected me without notice.

So anyway, I never paid off that bank account, because of the blatant ass rape of what they’d done to me. The actual money I owe them - money that I actually overdrew - was something around $60, but the overdraw fees, $33 per instance, were like $350-$400. Ridiculous.

Anyway, I haven’t needed to open a new bank account in a while, but now I do. I tried to open one locally, and they told me I was in the “checks” system, and that they wouldn’t do it.

Here’s the question: They probably covered their asses legally somehow in doing this, so it’s not like I can really threaten legal action, or it’d be worth it.

But is there anything I can do, aside from paying the ridiculous fees that should’ve never accumulated in the first place? Are there national banks, perhaps, that don’t run that particular check to open an account? Would it be practical to try to talk them down on the fee charges?

2

My tip: contrition and complete ownership of your irresponsibility. You can ask them to reverse the fee charges, but they are more likely to do that if you are contrite. Pretending that they have raped you when in fact you have stolen from them is not a good way to start.

3

I don’t know what all your options are, but my feeling is that the easiest way out is to suck it up and pay it off so it gets off your record.

I have heard, however, that with credit report items (and this may not fall under that category), you can dispute the record, and then it gets taken off your report for at least a little while, at which point you sign up for another account and get it before the bad mark returns. I don’t know the details, but it may be something to consider.

-Tofer
p.s. I pretty much hate banks, but I’ve been very pleased with the service and support I’ve gotten from USAA.

4

I haven’t behaved unreasonably here, nor had unreasonable expectations. Most likely they set what essentially amounts to a legalese ambush against the spirit of the agreement I made with them. I have libertarian leanings, but to advocate a society so legally technical that you have to have a lawyer to wipe your own ass to avoid getting raped by bank ambushes is silly.

I specifically asked up front what would happen in the event of an overdraw, specifically to protect against this instance, and to protect against “stealing their money”, a policy that they silently changed on me. It’s naive to paint the bank as the victim here, as they most likely designed the policy to trap people into fees just like this.

5

Did they ever at any point send you one of those “Change of Policy” notices? I know my bank does every now and then. I usually throw them away without bothering to read them. If this is the case then you may just need to do what Liberal posted.

6

I am not your lawyer, you are not my client, etc. etc.

I recommend talking to the bank manager, paying off the original debt in cash but not paying any fees. Inform them that you had a verbal contract with the bank that any overdrawn transaction would be denied, that you have not entered into a credit agreement with the bank and it was their mistake to extend you credit and not deny transactions. Tell them to remove any bad credit marks/checks marks and cancel all your fees at their earliest convinience. If the bank manager denies your request and insists you pay the fees, take the bank manager personally to small claims court for the amount of the fees and try to make it as difficult as possible for him personally - it is his bad and his fault and he should be held financially responsible for this.

7

It’s possible - the gap between when I got the card and when this happened was two years. I generally skim over notices like that, but don’t read them in detail. So I’m willing to assume that they might technically/legally be right.

I guess my best bet is just to call them, and see if they’ll take a reduced amount to pay off the account.

As to my other question - as a matter of principle, if I could get around this, I’d be happy to - are there any banks that don’t routinely run that check?

8

Periodic glitches in the system can allow debits that would otherwise be declined to pass through. Talking to the bank contritely will almost certainly result in them waiving some of the fees. What you might want to check into is if this will then clear you to open an account with the other bank. If someone is turned down for credit because of a bad debt, settling that debt doesn’t mean you then qualify for credit. The same may be true in opening a new account.

9

You’re caught in a mess by Chexsystems.

Here is one site which explains them.

Here is how to get a copy of the Chexsystems report.

Here is a cite which suggests how to get around Chexsystems.

Some banks don’t work with them. That might be a good option.

10

If you’re already on the Chexsystem list, you’re probably fucked. I wound up on their hit list some years ago when I grossly overdrew my account by several hundred dollars, and even once I paid it all off, I still couldn’t open an account at ANY bank for five years. (It was kinda interesting to see the New Accounts lady’s demeanor change from “We’d be happy to serve you” to “Get lost, deadbeat!” every time I tried…)

You could try getting a money market account with some brokerage firm like PaineWebber, or another non-bank that doesn’t pay attention to Chexsystem. A credit union might work for you, too. Frankly, I wouldn’t bother trying to pay off the debt at this point…the bank will be happy to take your money, of course, but don’t assume that they’ll de-list you from Chexsystem if you do. I’d just wait the five years and deal with other institutions in the meantime.

11

Wow. So if I call the bank (not local anymore) tomorrow and offer to pay it off, and they still say they won’t take me off the system, I’m essentially fucked for the next few years aside from happening to find a bank that doesn’t use the system?

12

If I call my bank tomorrow, and they agree to take me off the system if I pay them, should I demand that they mail it to me in writing first? I’d hate to take that extra time, but if they screwed me again I would be quite annoyed.

13

Just remember that Chex Systems is an independant company. They can do what they want to do. They can still report you as a “paid charge off…” Getting off Chex Systems shit list isn’t easy.

14

Well, from what I’ve read, if the original bank asks them to clear you off the list, they do it, right?

15

I just wanted to add that it’s possible they haven’t changed their policy at all and that something got caught in an authorization loop, fooling the bank into thinking there was more money in the account than there was. This happened to me frequently with gas stations - I’d pump gas, and the charge wouldn’t actually hit my account until two dyas later. Also, if a business puts through an authorization, but for some reason is late in putting through the actual charge, the money will bounce back into your account after a certain amount of time (5 days in my case) until they eventually finalize the charge. I had this happen with an internet purchase that for some ungodly reason didn’t get finalized until two weeks later. Money bounced back into my account, I didn’t realize what had happened (because my bank skills sucked) and spent it. Then they finalized the payment and the bank was required to pay it back to them because it had already been authorized, leaving me with a negative balance.

My bankings skills being what they were, I had myself on chexsystems and had a serious struggle in opening a check account. I finally went down to a local savings union type bank - one of the privately held, not affiliated with any national bank in any way type deals - and explained my situation to them. I asked if I could open a savings account with them for six months and, if managed well, then open a checking account with them. They agreed, and gave me an ATM card for my savings account (not as handy as a debit card, but still better than nothing), I monitored my acct vigorously, and six months later, I had a checking account and debit card again.

16

It’s possible that because you were a longish term customer, the bank was extending you credit to help you avoid the embarrassment of a declined transaction. There are many people that would prefer to pay a fee and avoid being humiliated in front of work colleagues or on a first date.

I know that many credit cards do this - if you’re a good customer, keep your account current and go over your limit, they’ll just let the charge go through, assuming you’re good for it.

Obviously, this isn’t a service that you’re interested in having but I bet somewhere in some small print it mentions it.

Now, as to how to deal with the bank, you have to keep in mind that they really have no reason to drop the extra fees, because (if I’m reading correctly) you’re no longer their customer. For that reason, when you contact them, you better be really, really nice. Further, you should probably stop refer to a few bank charges as a “rape” because that makes you sound like a moron.

Ask them very nicely to waive the extra “over limit” charges, and they probably will. If they don’t, you should probably just suck it up and pay them. I suppose that you could take all sorts of people from the bank to small claims court; however, you do have to pay for that, it takes time, the bank representative may elect to have the case moved to a higher court in order to get lawyers involved and then you’re hooped, unless you want to pay a lawyer of your own, way more than the $400 or so that the bank charged you in fees.

Finally, this overdraft really is your fault. It will probably help your demeanor when you contact the bank if you keep that in mind. And really, really drop the rape analogy. If I worked at the bank, and got a call like that, I’d laugh in your face and drop no fees, of any kind. Mostly because that sort of analogy is dumb, and makes you sound like an irresponsible drama queen.

17

Well the incentive would be that perhaps if they halved the fees, they’d get a few hundred dollars from me, whereas if they keep them full they might get nothing.

18

Also - post went through before I could stop it - I specifically went to lengths to prevent this whole incident from happened. If they did inform me of a change to the policy, it was buried in legalese, bceause I at least read enough of my statements to notice anything important. They essentially set a trap for charging outrageous fees (right, like the associated costs of an overdraw come out anywhere near $33 per) by quietly changing the system I had a reasonable belief would work differently. “Rape” is a dramatic term for it, but only if you’re anal about the language involved. “Fee ambush” seems apt enough.

Anyway, I wouldn’t take that tone over the phone with them, obviously, but it doesn’t change my feelings about what they did.

It’s not like I just overdrew and figured “hey, whatever, I’ll see what happens” - I specifically took steps to ensure avoiding this entire scenario originally.

19

I too suggest you drop the “anal rape” and “fee ambush” terminology. Not because it’s inaccurate, but because it’s redundant. It’s like calling O.J. Simpson a murderer or Michael Jackson a child molester – we all know it’s true, so let’s just assume everyone knows it and speak no more about it, shall we? :cool:

That said, I’m sure the bank would be more than happy to waive 1/2 the fees and take the rest of your money. It doesn’t help your current problem, which is you’ve been essentially blacklisted. I still think it would be best to find an alternate financial institution rather than fight to get reinstated with this one.

For future reference, banks will almost always remove at least some of the overdraft fees if (1) you ask them nicely, and (2) you ask them right away. (They’ll call it a “one time courtesy”, but Wells Fargo has done it for me six times already!) Being nice is the key – you catch more flies with honey than vinegar, after all.

20

Oh, definitely. I had no plans and calling them up and being aggressive or hostile - how I talk about them here is how I actually feel, not how I plan to deal with them.

I’ll just have to call tomorrow and ask if repayment will cause them to take me off the blacklist.

There are a bunch of sites out there that claim to have a list of non-chex systems banks, but you have to pay them for the priviledge of the lists. Anyone have experience with these?
I may just end up foregoing having a checking account entirely, and rather just buy prepaid debit cards - that’ll mostly duplicate the functionality I need a bank for, hopefully.