Overdraft Fees

[astanley]

Long story short: I have multiple bank accounts, most with one bank. This past weekend, I grabbed the wrong card out of my wallet (I just changed wallets...), and paid for a purchase which hit an account that couldn't cover the charge. Rather than having the purchase declined, the purchase went through and depleted the account and then some. I got hit with a $33 fee. Of course, I used this card a few more times that day, and now have $132 in fees awaiting me.

Now, before something thinks I'm whining, I realize I did something stupid. C'est la vie, dumb mixup.

What in the world? I can understand needing to "penalize" and cover the costs of covering my mistake (which stinks), but $33 per transaction? This is pretty extreme, and I can't imagine how long they would let it go on for. It's a pretty out of control fee and I seriously wonder just why they do this. A while back, I put a "overdraft protection" on my account, which my bank stopped offering in lieu of this. Man, with the over draft protection, I would have paid a few points of interest and said "Stupid mistake!" But now, I'm fumed. $132? This is pretty outrageous.

Cheers,

-Andrew

 

[mikea]

The banks like lot's money on fees like that, also charging you $2 to draw out $20 from an ATM...or $2 for using a "foreign" ATM that charged you $2 to use it. Nothing like 10%-20% to give you your own money.

 

[jesse]

BTDT. It was even worse for me.

My bank charged a $30 fee.

When I worked at Best Buy my income was way on the light side and I would buy a pop or two or three at work. Each time using my debit card. Well one time I was stupid and messed up and managed to overdraft three days before I got paid. Well those three days I wasn't aware of this and kept buying several pops a day each on their own transaction at 75 cents.

Said and done I had $7.50 in mountain dew cost me $300. Now I didn't have enough money to pay my bills and overdrafted again on the next paycheck. Finally I was able to get out of the overdraft cycle but it wasn't easy.

 

[bjohnson]

I have banked at the same bank for almost 20 years now and have established a relationship with my branch manager. She always takes care of any issues that come up whether they were my fault or the banks fault.

 

[Chache]

Long story short: I have multiple bank accounts, most with one bank. This past weekend, I grabbed the wrong card out of my wallet (I just changed wallets...), and paid for a purchase which hit an account that couldn't cover the charge. Rather than having the purchase declined, the purchase went through and depleted the account and then some. I got hit with a $33 fee. Of course, I used this card a few more times that day, and now have $132 in fees awaiting me.

Now, before something thinks I'm whining, I realize I did something stupid. C'est la vie, dumb mixup.

What in the world? I can understand needing to "penalize" and cover the costs of covering my mistake (which stinks), but $33 per transaction? This is pretty extreme, and I can't imagine how long they would let it go on for. It's a pretty out of control fee and I seriously wonder just why they do this. A while back, I put a "overdraft protection" on my account, which my bank stopped offering in lieu of this. Man, with the over draft protection, I would have paid a few points of interest and said "Stupid mistake!" But now, I'm fumed. $132? This is pretty outrageous.

Cheers,

-Andrew

They'll let it go on, heartlessly, for as long as you keep authorizing payments against insufficient funds.

The only thing they care about, is "their bottom line".
Same thing happened to me a number of years back.... (some 20 +)
Only mine was a checking account, which seven checks were charged $28.00 each, (yeah, 196 bucks!) because another check for a few thousand dollars, deposited 4 days earlier (more than covering the amount) had been "floated" for the intere$t it made them, and they delayed crediting it to my account.
When I complained, the branch Manager (Sphincterous Analous) self rightously said

Well.... Stop spending money you don't have!

Needless to say, I ceased to be a customer that day.


They were merged with another bank a few months later, which was taken over by another bank the following year, and have been absorbed, something like three more times in the time since.

What's with that??

What I find odd, is that: just because they, charge you.... It's a legal debt, and collectible.

Just try charging them some outrageous fee for making an error on your account......

They'll laugh you out of town!

 

[TMetzinger]

Credit card companies like to do the same thing - even though they are technically supposed to decline charges that are presented for authorization and would go over your limit - they approve them anyway and then hit you with a fee, and possibly raise your interest rate as well.

You can TRY to send them a letter requesting that they don't authorize electronic debits against insufficient funds, but don't hold your breath.

However, I think that enough people are sufficiently annoyed at the way the financial companies can alter the terms of an agreement at any time, that there is support growing for regulation both at a state and federal level to prohibit some of these predatory practices.

 

[silver-eagle]

How to make a bundle of money... Be a bank, crdit card company, or insurance. It's a license to print money. Banks - you get .5% on a savings account but overdraw a penny and you get nailed $25-$50. And haven't all the other fees gone up *like the fee to use the ATM" which they provided us for our convenience. Credit card companies are charging intrest rates up to 27% and still charge for the privelege to carry their card! Insurance companies charge for time payments, keep charging more every year and reduce what they cover.
With enough money, I wouldnt care. But then with enough money, I'd get a better deal all around.
I'm still trying to make a small fortune in aviation. My problem, I started with a lot less than a fortune.

 

[KennyFlys]

What most people do is try to resolve an issue over the phone with "customer no-service." (Sorry Nick! ) The best way to handle it is go into a branch and speak to a live body before you. As long as it's not a recurring theme and simply a single or short stream of events that piled on in a short amount of time, they'll usually give you the credit and things are back to normal. The folks on the phone... they don't care. They tell you "no" then laugh at you after the phone call is ended. I've always gotten a positive response in person, even when it was a blatant error on my part. The same goes true for credit cards. Live bodies in front of you will see the importance of keeping your business in the long-term and you showing up in person shows an effort on your part. Use that to your advantage.

 

[Richard]

This thread is the reason I said, "I thought all banks are tightwads." in Dave S's thread. With your money, I might add.

The best solution is for you to go in to talk with a bank officer. Don't plead, just state your case. Be sure to specify you have multiple accounts with the bank and that you have sufficient funds to cover the original amounts. (You do, don't you?)

If they do not agree to waive all the fees right there on the spot, be sure to let them know you will be immediately closing all your accounts. Perhaps even add something about a new car loan or all new furniture you are about to finance.

 

[SkyHog]

Right after I got mono, I had it bad, having gone a month without income. Not checking my bank account often enough, I didn't realize that I was almost out of money because of rent and stuff. I bought a Dr. Pepper at a gas station for $31.05 ($1.05 + $30 NSF fee). Then I remembered I needed a pack of cigarettes, so I bought one for $35.00 ($4.00 for the cigarettes, $30 NSF fee). Later that day, I ordered a pizza and spend $52.00 for it ($19 in pizza, $3 in tip, and $30 for NSF Fee). Add a few more stops to get sodas and cigarettes, and I wound up spending my next paycheck just getting rid of NSF fees. Thankfully, I have direct deposit, so I never saw my next check.

Damn banks.

 

[RogerT]

I have banked at the same bank for almost 20 years now and have established a relationship with my branch manager. She always takes care of any issues that come up whether they were my fault or the banks fault.

This is one of the nice things about small banks. But it's getting increasingly
difficult to find one. They keep getting bought up by large national ones. I've
had to change twice in the last 5 yrs or so. First one that I'd banked at for
30yrs got bought by USBank. So I switched to another local one. Then
they sold out to Wells Fargo. I hope this one stays locally owned.

 

[astanley]

What most people do is try to resolve an issue over the phone with "customer no-service." (Sorry Nick! ) The best way to handle it is go into a branch and speak to a live body before you. As long as it's not a recurring theme and simply a single or short stream of events that piled on in a short amount of time, they'll usually give you the credit and things are back to normal. The folks on the phone... they don't care. They tell you "no" then laugh at you after the phone call is ended. I've always gotten a positive response in person, even when it was a blatant error on my part. The same goes true for credit cards. Live bodies in front of you will see the importance of keeping your business in the long-term and you showing up in person shows an effort on your part. Use that to your advantage.

I tried this just a half hour ago at my local branch. Got the big old middle finger -
"We're sorry sir, but the bank cannot allow you to overdraw your account"
"This was a mistake! I used the wrong card, if you look in account XX I have enough to cover this many times over!"
"I know sir, but you still overdrew your account. It costs us a great deal of money to cover you in those situations, and someone has to pay for that."

I'm bank shopping today. I have two local banks in town, however, both have been subject to M&A rumors. What a load of cow feces!

Cheers,

-Andrew

 

[jshawley]

Little over a year ago, family member need $$. Decide to help by tappping into my HELOC with a major, very "Wide"-ly known mortgage/bank. Have better half call 'em up, they suggest we close out that particular HELOC, open a new one at a lower rate, "can I pay it off at any time?" "Yep". "But I don't need $xx,xxx.xx." "Just take the check, send back what isn't needed."

We go with the new HELOC account, lend the family member the $$, and he immediately starts making interest only pmnts. Five months in, he makes a $170.00 (out of a 5-digit loan) principle pmnt.

Next month, the statement shows a $700.00+ charge, and when I call, NOBODY knows why!

A week later, I finally learn the big secret: If the note goes below the original $xx,xxx.xx by so much as a cent, a penalty of $700 is assessed.

I jumped up and down on the 'phone desk, and explained that during my cell 'phone discussion with the loan officer while standing on the mezzanine of the Smithsonian Air and Space Museum (I was on a day off on a business trip) I was ASSURED there were to be no penalties assessed. Didn't do any good.

Suffice it to say, that mortgage company, located somewhere in the "Country", will not ever get any of my business again. Period.

Keep warm, y'all

Jim

 

[Dave Siciliano]

I tried this just a half hour ago at my local branch. Got the big old middle finger -
"We're sorry sir, but the bank cannot allow you to overdraw your account"
"This was a mistake! I used the wrong card, if you look in account XX I have enough to cover this many times over!"
"I know sir, but you still overdrew your account. It costs us a great deal of money to cover you in those situations, and someone has to pay for that."

I'm bank shopping today. I have two local banks in town, however, both have been subject to M&A rumors. What a load of cow feces!

Cheers,

-Andrew

There's a very negative consumer trend in that industry. We have some pretty large balances at our banks (currently have two) and still get hit with all sorts of charges. We always get them reversed because we are good customers, but it sure shows me what would happen to a small customer.

Think about what's happened in that industry: most banks were shuttting down retail branches and taking away teller services. They all wanted to be Mr. big and didn't need Mr. and Ms. small CD and checking account.

Then, at some point, it became apparent they couldn't make it without that retail person that wasn't as cost sensitive: now, I have Capital One and Wachovia putting branches on all corners and opening on Sunday. You won't believe what they paid for some of these locations: more than was CVS would pay in a couple spots. (How does one think they will make money on that <g>)

So, I go in the other day to set up a Uniform Gift to Minor's account for my Granddaughter. During the converstaion I'm given a fee scheudle a full page long. I ask the "personal banker" why all the fees; it's going to be in CDs and the money market. She says: "oh, it doesn't matter, you can't take it out of the bank until the minor is 21".

I said, you mean I can't take it out of her name, right?

She repeats, "no, it has to stay in our bank, in this account until the minor is 21"

Guess what, it never went into that bank!!

Sorry Andrew. I think you've been given the best advise. Try to find someplace that will value the relationship. Direct what you can there and hope someone wants your business long term.

Best,

Dave

 

[woodstock]

if you talk to a customer service rep they may waive some or all the fees.

if they simply won't, take your money out and go elsewhere. it will help if it is a LOT of money you are taking out and going elsewhere...

 

[wsuffa]

Sorry Andrew. I think you've been given the best advise. Try to find someplace that will value the relationship. Direct what you can there and hope someone wants your business long term.

Best,

Dave

Agree.

If you've got enough money, you ought to be able to get a private-banking type relationship with one of the small or regional banks. That helps - a lot. (at one bank it was $1 m in assets, or income > $150K/year to participate in private banking).

Some kind of overdraft line also helps.

 

[jason]

I was one day late paying off the full balance on my card a couple of months ago. They tried charging me $35 for that. I called and asked for the cancellation department. Told them I would send them a check for the $35 but could they please close my account. I'll be taking one of the other 20 offers in my mailbox.

Still have that account open and still have that $35 in my checking account.

I'm done borrowing money...and it feels fantastic. I only use this card to do my online shopping so that my debit card number isn't sitting in some database somewhere that gets hacked into and my account cleaned out.

 

[gkainz]

Suffice it to say, that mortgage company, located somewhere in the "Country", will not ever get any of my business again. Period.

But, but, but... they "say" their on "your" side! that's sad ...

 

[imQ]

Can you say "Credit Union?" I've had it with banks. Been with my credit union since 86, and loving it. "Hi Doug? I'm thinking about buying an XXXXX for $XXXXX. "Go ahead Mr Dunn, just bring us the paperwork when you're finished. I made the mistake of financing with a major name bank when I bought my house, and the only good thing I have to say about the experience is I only have 5 years left on a 15 year note.

 

[jesse]

Can you say "Credit Union?" I've had it with banks. Been with my credit union since 86, and loving it. "Hi Doug? I'm thinking about buying an XXXXX for $XXXXX. "Go ahead Mr Dunn, just bring us the paperwork when you're finished. I made the mistake of financing with a major name bank when I bought my house, and the only good thing I have to say about the experience is I only have 5 years left on a 15 year note.

I've had bad luck with my credit union. I can get another bank that I've never even spoke with before to approve a loan at a decent rate but yet the credit union that I have banked with for almost two years won't even consider it for a second.

I suspect as a credit union they are more cauitious with younger people with little credit to protect their members?

 

[SkyHog]

I've had bad luck with my credit union. I can get another bank that I've never even spoke with before to approve a loan at a decent rate but yet the credit union that I have banked with for almost two years won't even consider it for a second.

I suspect as a credit union they are more cauitious with younger people with little credit to protect their members?

I'm with you, Jesse. I have a credit union account, but I only keep the minimum balance in there ($25 or so I think) because they used to refuse to cash checks, saying "You have to deposit some!" I had more than enough money in the account to cover the check, they just didn't think my measly $1000 was worth keeping, apparantly.

I will say this: Bank Customer Service really are jerks, on the whole. I think they are trained to be. I've never had or heard of helpful service from a bank call center rep. In person, I've had some help, but the CSRs can go to hell.

 

[woodstock]

just because a bank will lend you money doesn't mean it is your friend. especially if there is collateral involved. they don't have to be risk averse - they will just come take your stuff. depending on how tiny your CU is it may be fairly risk averse.

I belong to NFCU and they are AWESOME. best thing I ever did.

 

[bstratt]

I'll stay out of this one because I don't want to push it into the spin zone but suffice it to say that we lose far more on overdrafts that never get recovered than we collect in fees.

 

[imQ]

just because a bank will lend you money doesn't mean it is your friend. especially if there is collateral involved. they don't have to be risk averse - they will just come take your stuff. depending on how tiny your CU is it may be fairly risk averse.

I belong to NFCU and they are AWESOME. best thing I ever did.

Good point. I guess I should also mention the great service, friendly attitudes, lack of fees for services, etc.

 

[mikea]

I just heard on NPR that he payday loan sharks are claiming their rates are reasonable compared to the overdraft fees that banks are getting. I think it was payday loans costing $8 billion a year in interest and banks getting $27 billion a year in overdraft fees.

 

[gprellwitz]

Been with a credit union for about 20 year now, an wouldn't consider going back. I was going to jump in on the thread to push them, but Quentin beat me to it.

 

[astanley]

I'll stay out of this one because I don't want to push it into the spin zone but suffice it to say that we lose far more on overdrafts that never get recovered than we collect in fees.

Barry,

I would be interested to know just what the breakdown is of recovery versus fees collected. I personally feel ripped off.

Cheers,

-Andrew

 

[astanley]

Been with a credit union for about 20 year now, an wouldn't consider going back. I was going to jump in on the thread to push them, but Quentin beat me to it.

I've been with a credit union for years now, and I really like them. However, they have no branches near me, but then I realized, I do 99.99% of my banking electronically, I could deposit checks through the mail . . .

Hmmm, why didn't I think of this first?

Cheers,

-Andrew

 

[mikea]

Another "customer focus" procedure the banks have is "largest draft first." It goes like this:

You have a balance of $1150 on Monday morning. 4 withdrawals arrive, $1200 for your house payment, $35 for you phone biil, $67 for the cable bill, and $17 on the debit card at Denny's.

The bank pays the $1200 overdrawing you $50 and charging you $29 for the overdraft. Then they "bounce" the next 3 charging you the $29 fee for each one.

Result: You got hit with $120 in fees and three bounced payments when you would have bounced only one check if they paid the smaller ones first.

 

[TangoWhiskey]

Result: You got hit with $120 in fees and three bounced payments when you would have bounced only one check if they paid the smaller ones first.

True, and frustrating, but given the choice I'd still rather bounce my Denny's bill than my house payment.

 

[imQ]

My all time favorite. My wife set it up with her C/U to cut and mail a check for the house payment on the 1st of every month. Payment is due on the 15th. no problem right?? The mortgage co. that bought our loan found a way around that. They change the mailing address every so often. We have to check our statement every month to see which mail drop to send it to. So far we've had Denver then Dallas for 4 mo. then Salt Lake, now we're back to Dallas. If you send it to the wrong mail drop, they go ahead and process the check, but we've been hit with late fees every time, and had to call and fight it out to have them dropped. I had the same PO box for 10 years before that. (Where is the head banging on the wall icon when you need one)

 

[Dave Siciliano]

My all time favorite. My wife set it up with her C/U to cut and mail a check for the house payment on the 1st of every month. Payment is due on the 15th. no problem right?? The mortgage co. that bought our loan found a way around that. They change the mailing address every so often. We have to check our statement every month to see which mail drop to send it to. So far we've had Denver then Dallas for 4 mo. then Salt Lake, now we're back to Dallas. If you send it to the wrong mail drop, they go ahead and process the check, but we've been hit with late fees every time, and had to call and fight it out to have them dropped. I had the same PO box for 10 years before that. (Where is the head banging on the wall icon when you need one)

Quentin:

I don't know what your loan docs say, but there is usually a legal notice section. If they are going to change addresses, they have to provide you with legal notice. You might see if the notice complies with the docs if they get huffy.

Also, there is this thing called the Uniform Commercial Code. It specifies what one has to do to make legal delivery. You can contract for different terms, but the Code specifies when something is "legally delivered". Most states have adopted this. Your docs may have amended it, but it's worth you knowing about.

I went through some c*%P with a credit card company over this once. Sent them the provisions of the UCC that showed I was complying. Asked them to point out where I was not. Never heard another word and fees were waived.

Some folks prey upon people that don't know the rules.

Best,

Dave

 

[imQ]

Thanks Dave. I think I'll do some reading of fine print this weekend. That is if I can still comprehend anything after we finish our inventory. (Anyone want to help count $14 million in car parts tomorrow? )

 

[jason]

sure, for 1% of the value of everything i count!

 

[imQ]

sure, for 1% of the value of everything i count!

I see we have a volunteer to count nuts, bolts, fuses, and the key blanks!!

 

[jason]

I see we have a volunteer to count nuts, bolts, fuses, and the key blanks!!

I was thinking more along the lines of engines and tires.

 

[imQ]

That's how we find out if we're on someones list around here. If you get to count engines and transmissions by the assembly or by the component parts!!
Just one of the ways the warehouse manager keeps us sales guys in line

 

[flyingcheesehead]

Man, with the over draft protection, I would have paid a few points of interest and said "Stupid mistake!" But now, I'm fumed. $132? This is pretty outrageous.

Two words: Credit Union.

My last-deal-with-a-bank story goes like this: I was going on tour for the summer and called the bank to tell them that I was going to be taking as much of my money as possible with me for the summer and did that new ATM card I just got have any fees associated with it?

No, no fees, I was told. So I paid a bill (forget what it was), and took all but about 3 or 4 bucks of what would be left when that check cleared and left on tour.

Three months later, I arrive at home to find out that they nailed me with a $10 fee for that ATM card after all, the check bounced, and they'd charged me $20 for the bounce plus $5 a day since then!

Luckily, I managed to get a good chunk of that reversed, but I'd had it anyway. I've been a member of a credit union since about 1988 and simply hadn't had my money there until the bank ticked me off. It's all there now.

Yes, it does seem to be a bit harder to get credit from my credit union than some big national behemoth bank, but what I do get has better terms, lower interest, and I trust them.

if they simply won't, take your money out and go elsewhere. it will help if it is a LOT of money you are taking out and going elsewhere...

It's rather unfortunate that that's the case, however. They should treat ALL of their customers with respect.

Believe me, I was one of the "little people" until quite recently. I remember VERY well who was courteous to me anyway, and who treated me like dirt. Those that treated me with courtesy then, get my business now. You'd think they would get a clue and respect those without a big pile of money, because damn near everyone's been a starving student type at some point in their life.

*edit* Oh yeah, I forgot the most important part: How my credit union treats me for an overdraft. It's linked to both my savings account and a line of credit. I forget which order they're used in, doesn't really matter to me. The bottom line is, they transfer enough to cover the check, free of charge, and then send me an e-mail notification so I can move money around if I screwed up somewhere. Free free free.

They also have lots of automated stuff available. My car loan payment (also with them) pays itself each month and they automatically cut checks for my other bills every month. Combined with direct deposit from my employer, I really have no money headaches ever any more. Money goes in, money comes out without me having to pay any attention (or time!) to it. I look at the account every 6 weeks or so to make sure there haven't been any surprises, but they take care of the rest. Very nice.

 

[mdreger]

I'll second, or third, or fourth the suggestion to try a credit union. The last time I bounced a check with them the charge was somewhere around $7. They also transferred the money from my savings to checking and paid the check eliminating the NSF charge from the company that I wrote the check to. They also immediately sent me a receipt/statement to let me know what had happened allowing me to transfer money to cover any other checks I might have written. The bank I used to use, would have charged something like $25, the establishment that tried to cash the check would have charged me $25, plus they would have sent it through again, incurring another $25 charge from the bank. This would happen for each check, and the bank would not have notified me, except for the EOM statement itemizing the charges.

 

[ScottM]

I have a bunch of money at a local bank, I say a bunch because I also manage a trust fund for my brother in law. All together with there is about $100k. The mascot of the bank is a lion and they give stuffed ones away from time to time. I had to go in there and beg for stupid stuffed lion for my niece. I even offered to pay them for the thing. You would think with that amount of cash in their bake they would just give me the stinking $5 toy. I finally got it when I walked in one day and said I want to close 6 accounts. When they asked my why I said because I could not a get a Hubert the lion toy from them.

I'll tell you I was really reading to walk that day to, my town has 7 bank in it so it is not like they are the only game in town.