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Reader Sounds out against "unjust " banking fees

In Uncategorized on December 23, 2008 at 4:57 pm

How is that, you ask? They take fees unjustly; pulling stunts to collect overdraft fees of $35.00 a pop.

Here’s how it is done. Say you have $100.00 in your checking account. You make a purchase for $20.00 with your debit card at 4pm. Your balance shows $80.00. Now, if you have a $101.00 transaction that posts that night from your automatic bill paying system that you forgot about, Bank of America will hit you with an overdraft fee for both. You see, the bank posts automatic bill payments between 12:01 am and 5:00 am the next day and dates the transaction for the previous day. This allows them to charge you an overdraft fee of $35.00 for each, even though they had authorized the debit card purchase for $20.00 earlier the day, when in fact you had the money in the account to cover the purchase.

But wait you ask, you had the money in your account when you made the debit card purchase. How can they charge you a $35.00 overdraft fee? We all know that if you don’t have the funds in your account, a debit card purchase is declined.

Bank of America has found a way around that fact. Bank of America’s policy is that they allow for the $20.00 deduction because they couldn’t know of the impending automatic withdrawal for later that night. But overnight, when they reconcile your account, they deduct the highest withdrawal first. Having done that, all other purchases made prior can now be classified as overdrafts too.

Get how this works? Even though at the time of purchase you had funds to cover the transaction, and it was approved by Bank of America, they then reverse the order of the transactions to ensure that they can charge you additional fees by deducting the highest withdrawal first. This guarantees that all smaller withdrawals are posted as an overdraft too, even if you had the money to cover the smaller transactions.

Thus they can charge you an overdraft fee of $35.00 for the lower debit transaction. Even though this defies logic and common sense, Bank of America says that it’s their policy, it’s written down.

This is a shameful scam. One that Fleet, Nat West and Ridgewood Bank would never perpetrate on its customers. After 25 years, I guess it is time to find another bank. Bank of America is just too big and doesn’t care about its small customers. Goodness knows, it was my mistake to have forgotten to transfer the funds to cover the larger automatic payment.

This policy is duplicitous and a shameful reflection on Bank of America. No customer should be treated in such a manner. This is just another example of the arrogance endemic of huge banking institutions such as Bank of America, the largest bank in the U.S. I think I shall have to find a smaller bank, one that values my business and does not take undue advantage of its customer’s mistakes.

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  1. just because you have a debit card or a check doesn’t mean you have money in the bank…perhaps, you should hire an accountant, if you can’t keep track of your balance..

    on another note, if you are a long time customer and made a mistake, then I’m sure the bank will waive this one time fee…if you continue to be an offender..than see paragraph above

  2. Banks have gotten creative to rob people of their money.

  3. As an added feature, the self-righteous 1:29 provides free lectures you on all of your faults.

  4. I am sure a phone call to your local branch will get the charge reversed. Banking is competitive and they want your business unless you are a habitual deadbeat who does not pay a mortgage. Actually..if you bounce checks and overdraft all the time they REALLY want your biz..it pays them the fees to stay in business so responsible customers such as I can have free checking. THANKS and keep up the ‘usual’ lol

  5. Welcome to Bank of America, the bank of fees. Switch banks if you do not like them. I dumped them a long time ago.

  6. The service dept. at the BOA in H-H-K are very accomodating and a pleasure to work with. Even though it is BOA=Big Bank, they treat you like a small bank and care. I recommend talking with them if you don’t get satisfaction at the Ridgewood branch.

    That Ridgewood office is like a masoleum….huge bank of days gone by!!!

  7. In over 20 years of banking at 25 N. Maple Ave. in Ridgewood I was never charged a fee by United Jersey Bank, Summit Bank, or Fleet Bank. That chnged when Bank of America took over. I constantly had to remind them to live up to the agreement of the banks they bought and reverse the fees.
    I got fed up and moved all my accounts to the newest, smallest bank in town, Citizens Community Bank. They are so much better than that big bank.

  8. This has been done to me and my husband. Sometimes things happen and stuff gets mixed up not everybody is rich like a lot of people. Times are hard for some of us and the bank of America is not good to customers when they do this. My husband asked the officer in the bank about it and he was told there is nothing they could do they don’t have control like they used to. Bank of America took away their power to refund our money if this happens. There is nothing they can do. The bank just gets to keep the money they took when they could have paid the smaller items and not charged us a fee for each. It is not fair. We are not rich and both of us work hard to live here in our home in Ridgewood.

  9. got to payback the bailout money somehow …btw fleet was a sh*t bank and it was forced into a shot gun marrage

  10. there are many choices out there. if you dont like a bank.. go to another one..after all this IS Ridgdwood where people bitch that we have TOO MANY BANKS??? so enjoy your choices..PS>> Bank of america has been VERY good to me..when i needed the flexibilty of a line of credit one of our other 'hometown' banks couldnt do it on favorable terms..whereas B of A did…and for the life of the loan its prime MINUS 1.01 so i currently pay 2.29 %..great deal if you are a RESPONSIBLE borrower. And I agree that FLEET sucked.. i removed my accounts from there. Commerce was great and i see the takeover by TD BANK as being just as friendly as commerce was

  11. The Bank of New York (now Chase) also rearranges your transactions to ensure maximization of fees. I go to the Bank at 8:00 and transfer money into my account and they post small transactions prior to my transfer. I’ve only bounced a check once but they do it repeatedly hoping I will.

  12. Bank of America processes direct deposits last. You can have 4 overdrafts before the direct deposit is credited.

    The system is designed that way. They could process direct deposit first, but how would that benefit them?

  13. if you want to avoid overdraft fees, why not ask for a small line of credit called overdraft protection. there is no annual fee and it sits there unless you overdraw then it takes out enough money to cover the transactions. If you have online banking (which is free too) you can catch it within a day or two. the payoff to the line of credit is a pennies compared to $35 dollars.

    since preaching at 1:29, I thought I’d provide some additional advise. Sign up today for overdraft protection. You’ll be happy to know that I don’t work for BofA, either.

  14. I’m amused by some of these comments here. People are blaming the banks when they do not balance their own check books? Its really simple, keep a record of the money you have and don’t overdraw your account. If you do, make sure you don’t do it again. Its simple money management.

  15. 11:17

    The bank makes the decision to apply withdrawaly before deposits. Payroll is deposited as cash. Why should a person get charged multiple times for overdrafts if there is more than enough in payroll to cover the withdrawals?

    The computer only does what the people tell it to do. They could do direct deposits first, but then they would not make all the fee income.

  16. Hey, let’s not blame the banks. They’ve only cost our economy around $2 trillion dollars so far. Not nearly enough to actually blame them for something.

    Blame starts at $5 trillion!

  17. 11:17am –

    Clearly you have not read the posts. It’s not about balancing checkbooks. It’s about unscrupulous and questionable banking industy actions.

    People are managing their money but the banks rearrange deposits/withdrawals to their benefits. Someone who goes to the bank and transfers money at 8am in the morning and then makes a purchase at 3pm in the afternoon presumes the bank will organize their activities chronologically HOWEVER, the bank will organize the activity in a way which benefits them. The bank ignores the sequence of events. Tell me what other industry gets to ignore actual times and sequences of events. The point is that people who manage their money well still get screwed. It would be lovely if we all had high balance checking accounts but most of us do not. Lots of people living hand to mouth and paycheck to paycheck these days. Have you been reading the newspapers lately?

    A line of credit is a terrific line of defense and an excellent suggestion but still does not excuse the banks from these questionable practices.

  18. Banks advertise the fact that their transcations are “real time”. B of A used to advertise the way a transcation showed up immediately. In a commercial that showed a couple in a “Starbucks” the couple saw the debit to their accounts immediately after paying for coffee with a debit card.

    They can do anything they want to – even Process Government payments and payroll deposits before the ach debits.

  19. 9:44 PM .. and All, be aware and check out the BANK RATINGS available on websites as:

    http://www.bankrate.com/brm/safesound/ss_home.asp

    (ratings: 5 highest,5,4,3,2,1 )

    http://www.thestreet.com/screener/index.html?src=ratingsindex&tab=3

    (ratings: A highest,A,B,C,D,E,,F is failed)

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