A recent accounting error resulted in my checking account being overdrawn by $250 and me being charged $245 in overdraft fees as a result. Here’s why.
Large to Small Transaction Processing
Many banks these days, in an effort to extract as much money as humanly possible from their customers, have begun processing checking account transactions in order of largest to smallest. This is why I ended up being charged $245 in overdraft fees for what should have amounted to one overdrawn transaction.
In my case, several transactions cleared on the “big fee day” as I refer to it now. At the time I had about $1500 in that particular account. The largest transaction to clear that day was a check I wrote of $1,400. There were 8 other transactions to go through that day, the total of all of these adding up to $350. One of these transactions was a car payment of about $300; the remaining $50 in transactions were small purchases like a pack of gum, a Starbucks stop, etc.
So, had my bank processed my transactions in order of smallest to largest, the $350 in smaller transactions would have cleared just fine and I would have only been popped with one overdraft charge. Instead, they cleared the $1,400 check first, then the $300 car payment overdrew my account, resulting in the first $35 charge, followed immediately thereafter by 6 more small transactions and six more overdraft charges of $35 each!
Just because of the way the bank chose to process my transactions I paid seven overdraft charges totaling $245. Had the bank processed the transactions in the reverse order, the first seven transactions would have cleared just fine, with the $1,400 check being the only overdraft.
So, $245 vs. $35 just because of the way the bank chooses to process transactions? That’s a scam if I ever heard one. And don’t think the bank has any excuse for this either…trust me, I asked.
Bank’s Excuse #1
When I called to object to such a ridiculous system I was told that the bank did a study and the customers prefer to have transactions processed from largest to smallest. When I asked why or for any information at all about that study, the customer service rep didn’t have an answer, neither did her supervisor, and apparently nobody does because they told me they’d have someone to call and follow up with me…no one ever called.
Bank’s Excuse #2
When I pushed a bit more, I was told that processing transactions from largest to smallest ensures that the important bills get paid…the bank is assuming your most important bills are probably the largest. Ok, fair answer at first glance, but wait…every single one of my transactions were paid, including the $1,400 check that overdrew my account. When I brought this up, the supervisor said, “well, sometimes they won’t all get paid.” When pushed, she had no real answer to when those “sometimes” were.
Bank’s Excuse #3
After about 20 minutes on the phone and a handful of questions but no answers, I requested that the order of my transaction processing be changed. No can do, I was told, apparently the bank does not have the ability to change the order of the transactions.
So It All Boils Down to This…
Ok, so let’s make sure I’m clear on this.
- Transactions are processed in a way that will always result in the most fees for the bank.
- Someone, at one point in time, studied some customers and found that they wanted their transactions processed from largest to smallest, but the actual location or means by which someone can get a copy of this study is completely unknown.
- The bank processes transactions from largest to smallest to ensure that the largest, and presumably, most important payments actually clear, but all transactions cleared so that doesn’t make any sense.
- The bank is incapable of changing the order of transaction processing for its customers and they have no idea why that is.
Ok, I think I’ve got it now. By the way, the bank was Fifth Third.
Popularity: 85% [?]
51 responses so far ↓
1 Dan Mahoney // Jan 13, 2009 at 2:31 pm
I had posted about something like this in my Livejournal, and a bot of some sort spammed me, and told me that there was a law on the books that would change this (I think that this was a few years ago).
Nice to know that folks like you and I are enabling them to loan out money to people who can’t pay it back.
2 Mark Gustafson // Jan 17, 2009 at 4:07 pm
Here is one for you done to me this week by Wells Fargo where I have been a customer for over 7 years. I returned home from outside the country to find that my entire bank account at this institution had been taken out by their “Legal Department” and given to the state of California (of which I have never lived or resided and am not a resident of) because of a request by them for all my account funds. It involves a three year old “sale tax action” which they say I owe and I say I do not. But this is beside the point. The account is not even in the state of California. On top of that Wells Fargo advanced funds into this account from my linked Visa account, to be given to the state again the next day, and so on till the state was satisfied with the amount. Beware of your linked accounts at institutions, and realize that money that you give to Well Fargo Bank for “safekeeping” is anything but that. I have yet to see anything in writing from either party regarding this “theft”. I did arrive back intime to notice this going on and closed the account immediately but not before the first cycle from my linked Visa account had occured. I am disputing this, but I am just a small cog in a big wheel and will just end up having a credit score of 800 go to “how low can you go” over this . Beware once your funds enter a bank they are no longer yours.
Mark Gustafson
3 John // Jan 19, 2009 at 6:51 am
Wow Mark, that’s a crazy situation. I can’t believe they’d draw funds from a linked card over and above what they took from your checking account…and why California?
I really hope you get things worked out…that’s a really frustrating situation I’m sure.
4 Rodger Alford // Mar 10, 2009 at 11:29 pm
The State of NY sought to get $50,000 in taxes (was actually $17,000 before interest and penalties) out of a Bank of America account that had a couple hundred in it. The bank the charged me over a hundred dollar in a fee which they showed me is in my. Terms and conditions for not having the money the State wanted. Fortunately I did not have the $5000 connected Visa account I now have or they would have gotten that, too. After reading above post I will now close Visa acct ASAP! Thanx.
5 Emily // Mar 14, 2009 at 10:15 am
I was scammed over Craiglist and bc the money orders of course did not clear, PNC bank took money out of my linked account!! Which was never mentioned to me… Now, instead of taking money out of my checking account, which had enough money bc I just transferred more money into it, they took money out of my savings, KNOWING THAT IT WOULD FALL BELOW THE LIMIT. Now I will be charged with fees for that when they could have taken money out of my checking account. Any advice?
6 Terrance // Apr 5, 2009 at 11:49 am
I was in Bank of America this week. I sat and discussed two overdraft fees with a lady there. They agreed to refund one of the two $25 “NSF (non sufficient funds) fees” they charged me. One of the fees was for going in the negative a few bucks from a purchase at Starbucks. The second for a small purchase at a gas station. Ok, after a half an hour of my time wasted, I got $25 back after they reversed one NSF fee… and I made sure I had plenty of money in my account to ensure my account would stay in the positive. I had also completely stopped using my bank card the day before. Everything seemed fine after I was done speaking with the banker. THEN the Next day I checked my balance and I had 3 More Charges of $35 in NSF Fees. I raced back to the bank knowing that this must be a bank error, since I had not used my card at all. Nope… the lady told me that since additional charges posted to the account (from two days before), that there were additional NSF Fees coming my way… even though I had already brought my account positive. In fact, the charges were now $35 each instead of $25 because it was a “second day” of charges that didn’t previously have funds (or supposedly wouldn’t have had funds). OK, so now I got 3 more $35 charges, even thought I hadn’t used my card since last talking to the SAME woman at the bank. I demanded my money back from Bank of America. The manager walked over and agreed to waive one of the $35 fees (gee thanks!). Now I know why banks made over 37 BILLION dollars last year by ripping of their customers. I will be CLOSING my account with Bank Of America as they are unethical in their practices, and that is simply unacceptable for me. In my own opinion, any person using this bank, or any other bank like this should cancel their account immediately. I propose a “Closure Day” or “Walk Away Day”. Let’s all get “closure” and “walk away” from our banks by lining up to pull out our money, and closing our accounts with them…. and ALWAYS complain and demand your money if any bank ever rips you off. Be loud, and let the other customers hear you say “This Bank Is Unethical and I want my money back”.
Disclaimer: I am not against NSF fees altogether. A $5 or even $7 NSF fee charged in a fair way would be acceptable. This would be a slap on the wrist for the customer, and the bank would still profit. BUT $35 is insane (per transaction.. what the heck?).
Advice:
- Find a good credit union instead.
- Never use a bank card connected to a checking account to make purchases (use a credit card that will not go in the negative, like a Paypal card).
- Do not use Bank Of America, Chase Bank, or any other bank that is unethical.
37 Billion Dollars in NSF Fees earned in ONE YEAR? And what are they doing with that money they stole from their customers?
I am looking forward to walking back in there and cancelling BOTH of my Business Accounts at Bank Of America. I will also be closing 2 personal checking accounts. AND a savings account there. In addition, I won’t ever be going to them for a loan, or mortgage ever again.
Well, it looks like in the long run Bank Of America will lose because I would have been a life long customer (I had already been at the same bank for 9 years). Good Riddance.
7 Jennifer // Apr 21, 2009 at 9:09 pm
I had to laugh when I found this website, only because most of these stories are directly similiar to what has happened to myself over the past year. My husband and I have an account at Citizens bank and a credit union. Last year we started utilizing Citizens Bank by depositing r paychecks into this account and paying our bills, but we always seem to overdraft our account. They always took the largest check first and so on, we ended up switching back to utilizing the credit union the beginning of this year. The Citizens Bank would not stop a transaction that I did not authorize on day from my account, to me that was the last straw, well that and the $2.00 fee that would be charged if you did not have a deposit slip at the drive thru window. (Regardless if you we out of checks and had new ones ordered)
My friend was just telling me at Monday night darts that Hunnington Bank does the same thing.
Who and what stops this kind of unethical behavior? I am all for JUST SAY NO TO BANKS and GOT CREDIT UNION?
8 Beth // Apr 24, 2009 at 10:01 pm
BINGO!! My husband went to Georgetown Savings Bank on April 21 and asked if we owed on our overdraft (comes with getting paid every other week and incurring lotsa fees in the past). The teller told him it’s $90 and that if he paid that amount, it is paid in full. Then my husband deposited $400 in cash and the following day his check went in. Well, on April 23rd, I get a naughty notice in the mail from the bank with fees for insufficient funds saying that on April 20th we went 300 plus into the overdraft. Hmm, on the 21st you said 90 and we paid it, now more posted for the day before my husband went to the bank? Curiouser and curiouser. Seems that all our checks and atm charges come out STAT, but we can’t know about them stat, no..we get to know much much later when the transactions are backdated to scam us out of our money. Closing that account after twenty years. Sad
9 phil // Apr 29, 2009 at 4:19 pm
to terrence and other bank of america victims. i was negative 103 today at 5 pm when i went to the bank. all my own doing, plus 2 35 dollar fees for overdrawing. i got one refunded and my account was negative 68 dollars. i just went and put 80 dollars in and my account is negative 53. i looked online and my statement has -103.45 as my balance, has my 80 dollar deposit and a -23.45 balance, my 35 dollar credit for the one fee they knocked off, a positive balance of 11.55, and then after that 2 more -35 overdraft fees above my positive balance putting my back in negative, as if they were transactions i made. wells fargo did this to me, and when i called, they tried the same shit, they were posted in days before, all excuses YOU have all gotten,and then actually changed my online documents to reflect it. this time however, i have all documents saved and ready to print, and i await tomorrow for them to change them to make it look like they were posted in previous days, and that i never had a positive balance, bcz thats what wells fargo did. and when they do, i will save and print those too, and i will look into my legal options. if anyone wants to get involved, has proof of misdoing like i do, or wants to help, feel free to post or message me, im tired of this scam that it seems ALL banks are pulling now
10 Robert // Apr 30, 2009 at 6:17 am
4/30/2009 BOA
Just happend to me Today. $300+ dollars in overdraft. Over drew on saturday. Put a hundered in my account. Thinking to save some money i buy the cheap chilli fries, and the value burger for 2.50. Turned into a 37.50 burger, and 37.50 fries. Remember they do it for you so that if your at the store you wont overdraw and be imbarrased. If i would have known this crap i would have gone to walmart and had 1 overdraft fee instead of 11.
What happend to your out of money, declined?
11 Raji Rajan // May 6, 2009 at 6:24 am
We used own a restaurant and had accounts with Bank of America. As we had many deposits and withdrawals in a day, we were charged with all the fees indicated above. I have paid atleast $3000 just in overdraft fees as they wouldn’t change the order in which the checks get cleared. The sad part is we have paid $70 in fees for $100 checks, which is ridiculous. Why isn’t the government interfering in this. I even told them they are the biggest ‘Thieves”, no response. Inspite of all these fees, they still get billions of dollars in bailout.
I lost my business and took $700k writeoff. Nobody to bail me out……
12 Jeff // May 8, 2009 at 8:43 am
Banks… I can’t believe what they get away with I recently had a similar issue with sovereign you can read about it on my website.
here’s the direct link – http://www.scamresearchcenter.com/post/Bank-scams.aspx
13 Kay // May 19, 2009 at 2:10 pm
Wells Fargo does this scam, US Bank, Washington Mutual, and Bank Of America!!!!!The only place I can trust to keep my money is Boeing Employees Credit Union! When I am overdrafted, I have 24 hours to return my account to a positive if not longer before I am charged a small overdraft fee. I was overdrafted $800.00 due to a cancelled payroll check, I called B.E.C.U. and they told me they understand and it is unlike me to have an overdraft. NO fees. I will never use a Bank again!
14 Kay // May 19, 2009 at 2:33 pm
Where would these Banks be without us. Ah, how sweet it would be if we all stopped using Banks all together. Would their morals return like back in the day when they had to earn our trust? I’m not using Banks anymore. Not sure about the rest of you but due to this financial crisis I can’t afford to just unwillingly throw hundreds away to my Bank. These days they are taking our grocery money! With no mercy.
15 Kay // May 19, 2009 at 2:41 pm
Us Bank: I was a single mom on my own without choice. After a year of struggling my 9 month old and I got our own apartment. No furniture, plastic dishes, one pan and a low paying job. I wrote a check for a deposit of 75$. I ended up having to buy diapers and food. Told my landlord it would bounce and she said it was okay, she understood. That night she brought me 6 bags of food while my baby and I ate ramen for dinner. It didn’t bounce. Us Bank put it through. I went in with my baby and spoke to a manager. He said they would freeze my account and stop with the overdraft charges that would accur until I got paid. They didn’t. Nor did they honor what he had told me because he was NEW! 270$Later, I had to let it fall on my credit report and plague me.
There is no limit to what a Bank will do to their customers, ALL their customers.
16 Rodger Alford // May 21, 2009 at 10:06 am
Remember, also, if you have a connected savings acct [as I do @ B of A] which is intended to cover over drafts there is still a $10 fee if you dare to use it. And the funds are taken out in $100 increments. O/d for 10c and $110 is taken out of savings. I pay daily attention to my checking, savings and c/c accts with B of A but they still manage to get a good amount of $ in fees thru delayed charging, atm fees (I’ll find a 99c atm and get charged $3.50 by the bank) or them putting through a transaction scant hours before my direct deposit gets creditted at 2am on Friday. I’ve already written them that I will close all but the credit card acct at month’s end (only because I’m already going to be charged this month’s fee). Be careful not to leave a zero balance, close the acct and then have a fee pop up as an overdraft on fee day. You may also not want to close a credit card if it will be detrimental to your credit report (debt to available credit ratio, or oldest card history). They’ve got us by the short-hairs as we’ve been sold into slavery by Congress.
17 Ena Hull // May 24, 2009 at 8:28 am
I just had $235 charged to me in overdraft fees. BofA ran the larger check through first even though the check was numerically later. this triggerd a domino effect when really I should have only had one NSF fee. Those CROOKS!Isn’t there anyway as consumers that we can stop this unethical RIP-OFF!! This is criminal. There needs to be a class-action lawsuit against these types of banking policies. Where’s Andrew Cuomo when you need him. After all this bailout money, these banks need to stop stealing from hardworking people. There needs to be a national law that limits NSF fees and how a banks can run larger amounts first before the smaller ones. This is WRONG and is stealing!!!
18 Kathy // Jun 1, 2009 at 5:06 pm
Add Wachovia to the list. My business account incurred $900 worth of charges because of this in May.
The straw that broke the camel’s back was today when they refused to cash my husband’s US Treasury check because there wasn’t enough in the account to cover it. Like the US Government is going to bounce a $600 check?
Madness. I’m moving to a credit union
19 Donovan Clark // Jun 23, 2009 at 3:41 pm
I use to live in a small rural town in Northern Minnesota. There were only two banks in town, and everyone knew who you were. They rarely charged overdrafts and if they did, the amount was under $10. Getting a house or car loan was as easy as knocking on the door of the loan officer, sitting down with him/her and going over past credit. You were approved within a day or two, or if not they would work with you on getting some other type of loan arrangement done.
When I moved here to Southern California, I was shocked at how the banks here operated. I lived here for 5 years now, and the banks tellers still don’t know my name, or say hello, or take a personal interests in what’s going on in your life or family. Okay, so that’s a part of being in a larger city (rude and impersonal).
However I use to be with Wells Fargo until I discovered they charged $35 for an overdraft and $5 a day for having a negative balance on your account. So if you get paid every two weeks and you have a negative balance 7 days prior to pay day you would owe an additional $35 on top of the $35 overdraft fee originally charge. Got rid of that bank and went to Washington Mutual
Washington Mutual did what so many of the other banks I heard would do – they would cash my mortgage check first and then 3 lesser checks which would give me at least 2 over draft charges. Had they taken the lowest to the highest, I would have only been $1.00 in the whole and and had only one over draft instead of two. This went on for a year and I closed my direct deposit account as well as all other accounts with them. Went to B of A.
Bank of America does this thing called “pending” where instead of immediately applying charges, checks or deposits to your account, they sit there in limbo (sometimes for 4 days) until they are sure they can’t make any money off you for an overdraft and then they apply to your account. I pay most of my bills through them using electronic debit and have them write the checks (a free service) to pay bills. These transactions are processed immediately. Thus the only time I get an overdraft is when I know if I charge something, I’m going to get that overdraft.
But again, back in the little town I’m from, I never got charged an overdraft fee when grocery shopping or buying gas for the car, heating oil, or utility bills. Also, a few stores would let you by groceries on credit and you pay them at the end of the month what you owed them.
I’m 36 years old, and moving to the big city has been an eye opening experience, especially how banks treat their customers. My little home town bank didn’t take any “bail-out” money and they treat their customers (the community) with respect.
20 MH // Jun 25, 2009 at 7:11 pm
Thanks for this! I’m going through this, this very second. I admit I made a mistake and I’m overdrawn by 300 – I’m going to the bank tomorrow because somehow that 300 = 670 in bank fees! WTF! Once this settles, I’m moving this to a credit union.. Mortgages and loans and all..
21 R A West // Jul 1, 2009 at 6:44 pm
Bit different but they just whacked me for $932 in overage fees. Their practice adds up to legalized loan sharking. Unaware my acct. had dropped to zero and sure my card would be rejected if so. Again unaware, a very busy 3 day weekend and also not realizing (The pillaging of my account) for several days added up to Citizens stealing $932
22 Rodge Again // Jul 7, 2009 at 5:25 pm
For a while I’ve noticed this new scam of allowing charges that should be declined @ a point of sale to go thru. And why not? It’s a way for the bank to ‘loan[shark]‘ you at an incredible rate. Say you’re 10c short on your big mac, as stated in a previous post. The burger can generate hundreds in fees depending on the setting and I’m sure they’ve got a computer that can figure that most profitable way to soak you in seconds. But here’s great news. Due to legislation to help some of the victims of these criminal banking and credit-card practices, banks will now go after their GOOD customers to recoup what they may lose by not being able to gouge their previous victims anymore. That little grace period you had on c/c purchases is going to become shorter so you may end up paying a fee even if you pay it back before the month is out. And many more surprises are in store. By the way Bank of America & Verizon are top 2 on the list of companies that expose you to identity theft. I made a sizable cash deposit in B of A and 2 days later I received an email from a hacker using a B of A header saying my acct will be suspended unless I verify my online password with them. I quickly took the $ out in cash and put it in a credit union. Who tipped the hacker off? Had to be an inside job.
23 W // Jul 10, 2009 at 3:34 pm
Your story is mine and mine is yours. It’s that simple. Banks are the biggest thieves out their- take your money out and put it in a credit union, or under your mattress!! We are all victims of thief and thieves should be fined and put in jail. Let your voice be heard!!
24 JOSH // Jul 14, 2009 at 9:24 pm
I have a great idea do not spend money you do not have!
25 Melissa // Jul 15, 2009 at 8:19 am
So the bottom line is that the bank is being allowed by the fed to get away with this, not by us the consumers. The same federal government that is giving billions of dollars to these poorly run banks that stole our money and still had to file for bankruptcy and federal funding. My question is this…How is this legal. It cant be. I know that the banking laws differ from state to state but the fed is the fed. It is really making me sick. I will continue to report these issues until someone, even if it has to be Pres. Obama comes to understand that the hardship is not on the bank but on the customers they continue to not value and take food out of the mouths of children because of their political greed. If I find any info, I will be sure to share it, please be sure to do the same
26 Rodge Again // Jul 17, 2009 at 7:52 pm
Well, Josh, the $ being being spent on bailouts is from our payroll deductions. It pales in comparison to our credit card expenses, which is just the bank a llowing you to borrow a fellow depositors (or your own) assets. Just think about this: Citibank – 4.3 billion profits last quarter. Bank of America – 2.42 billion, while raising fees on good customers [./ing acct = 8.95 per month]. Morgan- Stanley – 5 b+. We are sharecroppers. You, too, have been involuntarily victimized, Josh, if you’re a taxpayer, no matter how sterling your credit may be. Meanwhile the ‘landlords’ have upped the mortgage requirements to a 730+ score for a decent rate and a 30% down payment not to icur points. Still think it’s our own faults, kid? Actually the fault lies in us not paying closer attention during Congressional elections.
27 Rodge Again // Jul 23, 2009 at 1:17 am
Looked up B of A’s fee schedule. Sharp bunch of lawyers worked on that one. I have a ./ing acct that requires a $6000 min bal. Not to incur fees (or direct deposit – right. I’m trustin’ you folks with my paycheck). There is another ./ing acct that requires only a $1500 min. bal. (Or direct deposit) but somehow I ended up in the larger one? Since I don’t ever remember being given a choice I can only assume I got put in the larger one when I signed up for their paltry ‘keep the change’ program a few months back. That’s also when my monthly fee seem to increase by 2 bucks. Since I’ve been in ‘KTC’ I’ve amass the staggering sum of $16 and 10c, while incurring fees of $27. So 2 days ago when all this was dawning on me (yeh, I’m slow on uptake), I say, “…hey, B of A, YOU ‘keep the *#@! change’! Since my taxpayer $ and my deposits and my 16+ year loyalty to you mean nothing, I’m closing my checking acct!” I saw no pending transactions (guess I’m still too stupid not to trust even THAT aspect of their online banking) and proceeded to transfer everything to savings except the$8.95 fee. Well, surprise, surprise. I guess there was a pending transaction after all. A bill payment I had made days before. Yes, I was told the date it would be taken from my acct at the time of the transaction BUT was laboring under the misaprehension that bill payment amounts are immediately deducted from the remaining balance. At least I would’ve thought it would show up as a ‘pending transaction’. Of course my mistake lead to a $10 fee to borrow back some of the same $ from my savings acct. Now, you say, you fool, why don’t you keep a more accurate check on your balances? I, like many, have been lead down a prim-rose path that these folks holding our dough are kindly and wouldn’t dare trifle with our trust. If o/line banking says there are none pending then indeed that is the case. After so much evidence, it is still so hard to believe our financial institution’s (and our government regulators) would misuse our trusts so blatently. It’s gonna be inconvenient, but I’m gonna bite the bullet on this one. It’s time to stuff the mattress. I knew a guy that kept his $ in a shoe box under the bed. The old fashioned ATM – with NO FEEs!
28 Zack // Jul 25, 2009 at 4:38 pm
Bank of America – the same thing happended to me today when I checked my balance and contacted the bank. I had 15 transactions that hit on 7/20 most os which I used my debit card for on 7/17 and 7/18. They chose to run the largest transaction that I made on 7/19 first because it was larger resulting in 12 overdraft fees. Had the transaction been ran by the dates that they occured first I would have had 2 overdraft fees. I spent over an hour on the phone talking to the customer service representative then the supervisor only to get poor customer service and treated without respect. I asked for the next level manager and they were not there. I still have not got my fees refuned but I know that call the 800 number costs them money and I will continue to call every day until they refund the fees. I will waste there time until eiter they refund the fees. If it takes calling 10 times a day it will happen. I hate banks.
29 Rodge Again // Jul 26, 2009 at 8:54 pm
Largest to smallest transaction processing. A very profitable cog in the machinery.
30 Erin // Jul 29, 2009 at 12:18 pm
Old National bank does the same thing as the original poster said. Old national used to be Charter One.
They process biggest to smallest, they don’t seem to have a solid answer for what overdrafted transactions will go thru. And get this – on top of the $35 overdraft fee, per transaction, they charge $8 a day for being in overdraft.
True it is the costomer’s responsibility to not spend money you don’t have but if you DO make that mistake, watch out. Instead of bouncing the underfunded transactions, they will just clear it [randomnly] and then rape you wil fees later.
The way the banks charge for loans and being late, it makes the Mafia look like angels.
31 Rodge Again // Aug 17, 2009 at 10:10 pm
Where do ‘ya think they came up with the idea for some of these financial tactics? Only Capone & Gotti would have been ashamed to pull some of these tricks. And the government tracked THEM down like dogs. Some bank exec figured out it was more profitable NOT to kill you but to make you WISH you were dead. I have an acct in a small farm town in Ohio where I’ve never had ANY of the problems I’ve had with Bank of America You can call up and speak to a vice-president who knows you personally. I think this makes a difference in the way your acct is viewed when the bank has a choice as to how to process your transactions. I think they may have a mental image of a husky planter coming to town loaded with buckshot to ask why $35 was stolen from his feed money. Or why his check to John Deere was returned when he purchased his tractor.
32 Rodge Again // Sep 9, 2009 at 1:32 am
Today’s NY Times:
“This year alone, banks are expected to bring in $27b by covering overdrafts on checking accounts, typically on debit card purchases or checks that exceed a customer’s balance. In fact, banks now make more covering overdrafts than they do on penalty fees from credit cards.”
Way more profitable than the credit card itself! And we all remember the big push to debit cards, some banks giving ‘cash-back’ incentives for the use of debit instead of credit cards. Because credit is way more regulated than the use of debit cards. You don’t like something you’ve purchaased on a credit card you’ve got recourses. Fraudulent charges, merchant misrepresentations, merchant puts you in a ’subscription program’ for any number of infomercial ripoffs ['try it free- we just need your credit card # for shipping & handling'] or just outright theft, you’ve got recourses. Overdraw your checking acct by loosing track of debit charges (not hard to do since they’re widely accepted) and you’re charged an exorbitant fee no matter how small the infraction.
Say someone gets hold of your logoed (having a Visa or MasterCard logo)debit/credit card. As long as they don’t enter a pin#, they can run willy-nilly at every gas station or convenience store from NY to Chicago for 24hrs until you report it stolen and guess what? The bank’ll will eat the charges (I think it’s actually the clearing house the logo represent’s insurance). Let the thief make 1 lucky stab at your pin# and now it’s a ‘debit’. Whole different set of rules. They can clean your acct OUT (and then some) and as long as they don’t show thier mugs on a camera YOU are skewered! [As we know bank cards without logos MUST use a pin#. The logo actually gives you a little protection].
Lemme know if I’m wrong on this.
33 Carla // Sep 9, 2009 at 9:51 am
I have had the same problems. I have been printing out my statement everyday and every time I do…The bank has change the order of my transactions and that is causing more and more overdrafts! One day it will show that something has cleared and a day or two later it will show that its and overdraft! Can’t we do anything about this…? I can’t keep going like this…I have 4 children, one of which has a disability!
34 Misty Williamson // Sep 9, 2009 at 11:31 am
We have Compass and they promise and advertise that they charge no overdraft fee’s, don’t let that fool you. They do charge overdraft fee’s and not only that they put them though from greatest to smallest. Meaning we should have been charged for one $35.00 overdraft fee and instead we got charged over $200.00 but they held the smaller withdrawal’s in pending until the large one made it through and they were able to collect as much as they could. Oh and we realized the mistake and put the money in there before the charges were pending but withdrawals go through first!
35 Patricia // Sep 14, 2009 at 2:51 pm
You know, many people have suffered from overdrafting their accounts at one time or another. I’m one of them. The best thing to do is know what you are spending. Most people today, are so quick to charge their card, and doing a horrible job of accounting for what they have in an account, vs what they spend. The whole process of debits posting to your account can take up to two weeks, but not necessarily due to the bank.
I’m a student that works in the bank industry as well as the service industry at night. Of many of the rest/bars I’ve been employed by, it can take one week or longer to post the correct transaction to your accounts….depending on the establishment and institution.
My advice to you people is to stay on top of your accounts and know what you have to spend in the first place. It’s never the banks fault that you don’t have sufficient funds, and if it were, trust me they’d fix the problem.
Overspending is a problem that we so clearly see nowadays with the economy being so screwed up. If you’ve had problems in the past with overdraft than use an atm and spend only the cash you have. That’s what you’re card is for too ya know!
36 Banker Bill // Sep 18, 2009 at 10:28 am
Out of 34 posts, only ONE made any sense: #24, Don’t Spend Money You Don’t Have!!!
Banking is very simple. You put $100.00 and you can spend $100. 00 Put in $100, and spend $200, and you’re now overdrawn. Plain and simple.
Clearing largest to smallest is a scam, and so is letting transactions clear when ther’s no funds available.
You know that little book they give you when you open an account, called a Check Register? USE IT!!!!
It would be wonderful if all banks that had online banking would do it in real time. With today’s technology, you could check your balance any time, etc.
But they don’t, so it’s up to YOU to keep track of your own money. They prey on people’s half-hearted attempts at managing bank accounts, because they KNOW that 90% of the people don’t manage their accounts properly. So if they can make some money from it, they will.
I’ve done the same thing as everyone else here, and I’ve pissed and moaned, but in reality, if I can’t add and subtract, it’s my own fault.
So, my thing is, I won’t let them beat me at their own game. I’ve unlinked everything, keep track of all my transactions, and one even better: If I think I might be close to a zero balance, I’ll make the transaction a debit and use my PIN. That way, it’s out immediately, and I can go home, get online, and manage the account.
I’m not telling anyone here that they’re stupid for getting wacked by the bank, I’m just saying don’t let ‘em screw ya. KNOW how they’re sticking it to you, and beat them at their own game!
37 David // Sep 25, 2009 at 12:27 pm
The larger banks have now discovered a far more profitable scam. It falls under the new HVCC regulations passed on May 1st. Perhaps they’ll forget about nickel and diming clients to death with overdraft fees now that they’ve found a way to make several billion dollars off the backs of homeowners. For more info on HVCC visit us at http://www.investsmart.com
38 sharon // Oct 10, 2009 at 7:24 pm
well fargo screwed me actually the same way – by paying the largest check first – I was told because I live in Calif – that is the law here. Can anyone tell me if this is bullshit or not? I have been with that bank since 1982 – I am closing my acct this week.
39 kevin // Oct 14, 2009 at 1:39 am
Bank of america just screwed me over, i was charged a bill i was unaware of. that fine what ever, personally they should of declined it cause it would cause my account to over draft. however i placed money in my account twice to cover the over amount. they still charged me two $35 overdrafts. it’s like why should i rush to the bank to cover the amount if your ganna charge it anyways. plus their pending they do just seems like a plan so that can wait conveniently to charge something and over draft it
40 Wayne Knapcik // Oct 31, 2009 at 3:21 pm
Get this one with Chase.
My 20 yr old Son opens a checking account and savings account when he is away at school to have his work checks electronically deposited. He decides to have them draw $50.00 a pay check automatically to savings. Great Idea I thought! Of course they talk him into a Chase credit card with
Overdraft Protection for his checking. Well everything was good an well except now he becomes in debt with his credit card. Small balance but not a good practice to start.
Here’s the scam.
He moves back home after school. No money going into his checking any more because he changed location by 300 miles and job of course. He doesn’t close his checking account because he still has the savings and credit card with balances now for about six months now.
He’s trying to pay down his credit card balance big time each month but starts noticing $50.00 twice per month being charged to his card for ODP? 20yr old kid with not much experience doesn’t catch on real quick! Mom & Dad step in and begin to investigate. Guess what?
NO money in his checking any more so they still try to draw $50.00 twice per month to deposit in savings. Since no money, they hit his CC twice per month for Overdraft Protection. For this $100.00 deposit in savings he was getting hit $22.00 in service fees plus the interest being added to his daily balance on his credit card.
We try to close the account over the phone and they want $8.00 for that as well.
Well we now know why the big Execs are getting these big bonuses and can but castles.
Because they were able to develop a way that makes these banks millions in fees with us not even knowing whats happening till its to late and we have already paid them hundreds, not to mention how are young adults are being dragged into this and being taken advantage of. No wonder these young adults are having to claim bankruptcy at such an early age.
This economy is where it is because of this type of deceitful practices that is starting to backfire.
God help America!
41 John // Nov 3, 2009 at 2:13 pm
Ok, here’s my latest story. Twice I bought coffee on my debit card and they give me a slip of paper with a line for a tip. I write in 50 cents tip on one and 30 cents on the other. Next day a bought slice of pizza, $4.22. Two days after the coffees and a day after the pizza, I go to the ATM to check available balance bc I know I’m getting low bc I’ve been checking available balance at ATM periodically. I have $3.64 cents. I walk into the bank and withdraw $3.00, leaving 64 cents. Later that day, the tips, totaling 80 cents came in. The largest coffee+tip was processed first. Then the second. This brought the alledged ledger balance low enough ($4.06) to where the PENDING slice of pizza (for $4.22) triggered a $37.50 overdraft fee. A day later, when the slice of pizza finally “came in” (was officially processed), another overdraft fee was charged because the account was already $37.66 in the negative. So, together I got two charges of $37.50 totaling $75 because I went 16 cents negative when 80 cents worth of tips came in two days after the fact. Apparently, when I went in to get three dollars, the teller was somehow blind to the pending 80 cents tips, that came in later that day blowing my 64 cent cushion out of the water. I went and ask those places where I bought my coffee how they handle the tips that people write down on their debit card purchases. I was told that they are entered right away through a manual “tips edit” button. So, at the point of sale, and at the time of sale, both the coffee and the tip are entered into the system. So why does the bank pretend that they don’t know what the tip is going to be until it “comes in” days later? Both of these establishments report daily their reciepts. So, where were these tips floating for a couple of days? Why? I will be talking again to the manager of the US Bank branch where this happened. I will probably be told that we are supposed to keep our own ledger with debit cards. I will also probably be told that they have no way of knowing what those tips could be until they “come in”. What does that mean? As far as I can tell, those tips “came in” at the same time that those coffees were listed as “pending” (for two days).
42 Tim // Nov 11, 2009 at 11:08 pm
Yes, i have had this problem also, many times. some banks have once per year where you can retract 1 fee…..
My prediciments are having funds in my account and using those till my account is at 1 dollar, and then having to overdraft that night or something.
Anyone know how they file these charges? If computerized or people doing it manually? if its computerized, it should be able to calculate the best way to charge your account instead of largest to smallest SINCE!!! they are going to OVERDRAFT your account whether or not the FUNDS ARE IN THERE!!!! There is no bills that arent going to be paid…. its ……. all they do is overdraft anyways. or says funds non effecient.
i dont mind paying the fees, until they show up too many times.
43 Lori // Nov 19, 2009 at 3:18 am
Bank of America is the worst. Or should I say bank of i like to srew you. I just got into a fight with them yesterday about everything posted above got all the excuses. Then this morning I went and check my account to see if my husbands check had hit the bank. It did but so did a $100 ATM withdrawl that we did not do. How can you take money out of an account that is already overdrawn???? And then get charged another fee. Now Im going to have to take a day off of work to go and try and get this straight. After next weeks paycheck only because of the holiday. I will be closing out that account. I think Im only going to open an account somewhere else just to have money put in and take it out after it clears. Thats the only way to keep my money safe. The money is not FDIC insured for me its for the banks only.
44 Bernadette // Nov 27, 2009 at 2:18 pm
What is Obama doing about this cheating mess? And we wonder why our government has to take over all enterprise. it might just be the only way to protect us. At least we will just be up against the government instead of a hundered ifferent businesses that screw us daily. make them all under government scrutiny as far as I am concerned. It couldnt be any worse.
45 Darlene // Dec 10, 2009 at 1:14 pm
Wells Fargo did the same thing to me on Dec 7, 2009 I wrote three checks to the same vendor and I had a small transaction from Burger King. They process the larger check first and them the other three transactions. Now I am stuck with three overdraft of $35.00. When I call Well Fargo they told me that how they process transactions the largest first to the smalles. If they would have done the reverse I would only be stuck with one overdraft fee. I cannot understand why banks get away with this rip off systems. I was so mad I told the guy hell we the tax payer bail this bank out and this is how you repay your customers. Something need to be done about this.
46 Plan ahead // Dec 15, 2009 at 8:19 am
I’m not saying it’s easy for everyone, it isn’t… but we try to keep a minimum balance of $1,000 and we view that as $0. I run a business, and even with that system I bounced a check last year. Wachovia here in CT allows so many per yr and the manager droppped the charge. If this happens to you only once or twice, certainly visit your bank in person and remember to be very nice when you ask them to waive the fee. Remember, it was your error, and they covered your charge without contract or guarantee that you’ll return the money either.
Prior to this system we were bouncing checks often enough. I remember sitting down to do my taxes one year and adding up $800 in charges. Business banking fees (including OC) are a business write off if they are from a business account and related to business activit.. Nonetheless, I was incredibly pissed off and realized that that $800 could have been much better spent on credit card debt.
47 'Lil Russian // Dec 23, 2009 at 4:17 pm
I’ve recently closed both of my BofA ck/saving accounts, and returned to my Credit Union. I’m also a So. Cal resident and a full-time student (on a tight budget + tiny income).
Over the past 6 years I’ve spend thousands of dollars (in overdraft fees) and endless conversations with their CSRs. I’ve thrown in the towel and with one promise to myself – exercise a better management of my money. I have to agree with the postings above, one must balance their own check book vs. knowingly spending cash that they do not have.
Though I do not agree with how most banks get away with such unethical practices, we can all put our thinking caps on and take our business else where.
I’m currently waiting to rec’v a refund on a returned amount for a PayPal transaction, after I have closed my acct. So help me God, I will get the check from BofA at some point.
BE SMART, and you won’t have to kick yourself in the a** and be surprised at your own folly.
Same action will not produce a different result.
48 VZ // Dec 28, 2009 at 6:33 pm
Banks have made billions in NSF charges…
http://www.powerpaydayloan.com/overdraft-fees-produce-billions-in-profit.aspx
They are supposed to stop transactions when the balance in the available funds are in the red.
49 Aaron // Dec 30, 2009 at 11:56 am
I just had bank of america hold all transactions for 7 days till a big bill went through and then added all the small ones from a week ago
50 Jane Martin // Jan 28, 2010 at 4:45 am
My daughter had to pay an $800 late fee to GE bank out of El Paso because they never cashed one of her checks till after the due date. All the others were cashed on the same day in Sept but this one wasn’t, and it was an “interest free” trial period until March of this year. We are trying to find what options we have.
51 MIKE // Feb 2, 2010 at 10:17 pm
WELLS FARGO DID THIS TO ME. PROCESSED MY TRANSACTIONS FROM LARGEST TO SMALLEST. HAD A POSITIVE BALANCE ONE DAY OF 800 DOLLARS. THREE WEEKS LATER STILL HAVE NOT USED MY DEBIT CARD. MY BALANCE NOW IS A WHOPPING 2400 DOLLARS OVERDRAWN DUE TO STUPID OVERDRAFT AND NSF CHARGES. COME AND GET IT IF U THINK U CAN. ILL JUST LET THEM CHARGE IT OFF. MY CREDIT SUCKS NOW ANYWAYS DUE TO FORECLOSURE. WELLS FARGO U GREEDY BASTARDS. AND THEY WONT EVEN WORK WITH YOU. OH WELL
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