[ Banks work hard to get you to bounce checks. They cover them for a $25 to $50 charge. It’s just about the most profitable line of business in a bank. One ATM withdraw which will give you the money you asked for even if it’s not there, will domino into a $500 bill in a hurry if you forgot an autodraft for your car insurance payment hits your account. The banks will even putt an autodraft into limbo if it gives them the contractual opportunity to structure your debits to hit your account in just the right order to maximize their fees. They have a computer software program to do just that. ]
Yup! If you have the following transactions to be processed in one day:
Starting Balance - $300.00
withdraw 50.00 - 10:00AM
withdraw 120.00 - 11:30AM
deposit 1,200.00 - 1:00PM
withdraw 500.00 - 4:00PM
withdraw 5.00 - 6:00pm
The will process them in this order:
Balance 300.00
withdraw - 500.00
Balance (-200)
fee - 25.00
Balance (-200)
withdraw - 5.00
Balance (-205)
fee - 25.00
Balance (-205)
withdraw - 50.00
Balance (-255)
fee - 25.00
Balance (-255)
withdraw - 120.00
Balance (-375)
fee - 25.00
Total:
Balance (-375)
deposit 1,200.00
Balance (+825)
Minus Fees (100)
Ending Balance $725.00
If your bank does this, time to find another bank.
They should do the processing in chronological order, but some have software that is TUNED for maximum fees.
It is immoral and it is wrong, and they say the financial system is “solid” a lot of banks will happily scam people who failed basic economics class in high school.
Someone once asked me once why I have “Checking plus” which is a line of credit that only charges a minor daily interest rate for any over drafts. Well I would rather pay $1.25 in interest for three days on 100 bucks of overdraft than $300.00 in fees because I had an emergency because I got their “free checking” which doesn’t have an over draft account.
That’s easily provable fraud.
Forty bucks in a small claims filing will win you $4,000 + costs.
Is that legal. I have seen banks do the same thing.