Posted on 09/09/2009 10:21:54 AM PDT by BGHater
When Peter Means returned to graduate school after a career as a civil servant, he turned to a debit card to help him spend his money more carefully.
So he was stunned when his bank charged him seven $34 fees to cover seven purchases when there was not enough cash in his account, notifying him only afterward. He paid $4.14 for a coffee at Starbucks — and a $34 fee. He got the $6.50 student discount at the movie theater — but no discount on the $34 fee. He paid $6.76 at Lowe’s for screws — and yet another $34 fee. All told, he owed $238 in extra charges for just a day’s worth of activity.
Mr. Means, who is 59 and lives in Colorado, figured employees at his bank, Wells Fargo, would show some mercy since each purchase was less than $12. In addition, a deposit from a few days earlier would have covered everything had it not taken days to clear. But they would not budge.
Banks and credit unions have long pitched debit cards as a convenient and prudent way to buy. But a growing number are now allowing consumers to exceed their balances — for a price.
Banks market it as overdraft protection, and the fees it generates have become an important source of income for the banking industry at a time of big losses in other operations. This year alone, banks are expected to bring in $27 billion 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.
(Excerpt) Read more at nytimes.com ...
You obviously do just fine with your finances. There are those of us, however, that have had issues with banks posting deposits late. This has happened several times with our B of Am accounts. Luckily, it took a simple discussion with the bank mgr. to reverse the charges.
Those of us that run small businesses have to deal with things like late payments from customers—that can really eat into cash flow. Which in turn, affects our payments. It’s happening more and more, and is pretty indicative the the economy is not “on the mend”.
This happened to me. I transferred a grand to my checking account at the ATM at the bank. Then I went shopping. I was hit with $125 worth of overdraft charges for using my Debit Card! When I went to the bank’s manager to complain, he informed me that ATM transfers take overnight to go through. That hadn’t occurred to me! Transfers at the teller’s window go through immediately. As I was a customer of that bank for over 30 years, they dropped the charges, and I learned a lesson! Use the tellers!
$4.14 for a coffee at Starbucks
$6.50 student discount at the movie theater
He paid $6.76 at Lowe’s for screws
**************************
Each of these items should have come out of an envelope marked “Blow $” and sufficiently filled with cash at the beginning of the month. He would then only have to manage one ATM withdrawal a month.
$40 billion in over draft charges last year...that’s unreal. The banks are catching a lot of flak for this practice and I imagine that it won’t be long until they are forced to stop either because of lawsuits or gov’t intervention.
Sure they will, below some given amount.
They also slap a hold of three to ten days on larger checks, or questionable checks, or even payroll checks - and you (or I) get all ticked off because the money isn't available despite its being a "perfectly good check".
The solution is to understand that banks are in business to make money and to actually keep an eye on what you have and what you spend. Debit cards themselves aren't the culprit although they DO require more work in order to keep your balance straight.
Sure, people should know how much is in their account, but stuff happens, and if they make a mistake, the charges are seriously excessive and designed to give the bank an extra source of revenue, not to protect the bank from the danger of overdrawn accounts and the administrative costs of that.
Oh the Humanity!!!
I can’t believe a poor person getting fined for spending money he didn’t have!
Ever hear of over-draft protection bud?
In addition, a deposit from a few days earlier would have covered everything had it not taken days to clear.
In other words, THE BANK FAILED TO PROCESS HIS DEPOSIT!!! That's a complete scam. Not only should he pay no penalties, but the bank should also reimburse him for interest that should have been earned while they were dragging their feet.
The banks can sure as hell take money OUT of my account instantly - money I put into my account should go in just as fast.
In other words, let's say I deposit $500 on Monday. Tuesday through Friday, I spend $300. Am I being foolish or reckless? Hell no, I deposited $500 and have $200 to spare. If the bank fails to deposit the check until Friday, the bank is at fault - not me.
Ha, well officially without a post to prove your presence, then it ain’t official! ;-)
Keep living like no one else, it will be amazingly worth it. I’m still trying to wrap my arms around banking cash instead of paying on debt. For some reason it isn’t as exciting, but that is because my thought hasn’t had time to shift yet.
I use cash for everything, however I do have to execute a 1 time ATM withdrawl to fill my envelopes. I have no issue managing my bank accounts.
If that were the whole story you'd be right. But intentionally posting the transactions in the order likely to generate the most fees is bad faith on the part of the bank. They either take an agnostic approach and post them in the order of occurrence or do so in the order that will generate the FEWEST overdrafts. You pay them a fee every month after all, they're working for you.
The way his bank works, which is my bank so I know from experience, is that they hold back a certain amount of your deposit, making it not available, until they know the checks you deposited will all clear the bank upon which they are drawn(which usually takes between 1-5 days). If you look on your online account, you can see what available funds you have each day, and it is specifically explained there.
Sure. He knows that now...
And they used to do just that. Charging massive fees is a relatively new phenomenon.
Maybe that's why they went from calling them "debit cards" to "Check cards."
Yes, they should simply deny the charges. Or allow the customer to configure the account either to deny or pay the charges incurring an overdraft fee. They shouldn’t be able to make a decision on the basis of the fact that it’s adverse to your interests. You’re the customer.
“Sure. He knows that now...”
Cash is not a new concept for a 59 year old.
Yuck. Makes me glad I use USAA. I can deposit checks from home (scan them from my home computer) and the money is available *instantly.*en 10 minutes to the restaurant to get something to eat using the money
its the "stupid tax"....
live and learn....
next time this guy won't be so careless.....
All true. But the banks should then post any debits in the order that they occurred, not in the order that generates the most fees for them. It’s blatantly dishonest.
Maybe the government should take over your checking account for you so these kinds of won’t happen...
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