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Posted July 24, 2006 8:00 AM | Permalink
Alice, I'm glad that you could get yours changed to an account that would decline if it would cause an overdraft. I asked my branch's manager specifically if they had a product that would do exactly that. I was told categorically: "No."
As bad as Wachovia might be, if they have that financial instrument available, I might switch from one bad bank to one that at least has the product I want.
Sep 8, 2007
Having worked in banks for a long time, I can tell you that "predatory overdrafting" is being practiced by virtually all large banks. And, if you read the Endless notices that you are given for your accounts, you essentially have no actual rights or recourse and the banks have no responsibility. Did you know that your home mortgage can be "called in" any time the bank just happens to want to do that? It's in your note, check it out. Face it, our money is issued by a non-governmental company and our monetary system is regulated by companies whose sole purpose is to make money.
Sep 10, 2007
My wife's business account is at Compass bank also, and I've had the same problem with them. I'm a big boy, and understand that Compass is going to apply the largest outgoing transaction first, and that all transactions are going to be applied before any deposits, and that if this creates a shortage in the running balance during the day, she's going to be charged overdraft fees.
What really burns me though, is that if at the end of the day, if there is still a positive balance, why would they send my overdrafts back? That is just adding insult to injury, and costing both of us money.
Sep 10, 2007
When a hurricane was headed towards us a couple of years ago, I went a little crazy stocking up on supplies, gas and cash. Luckily, it turned at the last minute and hit somewhere else.
Well, I spent a little more than I had in my account and incurred an overdraft charge. No problem, my bad. But then the next day, I had a second overdraft charge. I looked at all the charges, and there should have been only one transaction that went over, no matter what order they posted.
After looking at a detailed printout of the account, I saw the problem. My grocery purchase bounced because they were "holding" funds for my gas purchase. Then the next day, the gas purchase had bounced because of the overdraft fee from the grocery purchase. I thought it would be no problem to clear this up, and called the bank.
After several infuriating hours trying to explain how one of the charges should be removed because of the overdraft paradox, and hearing over and over about the bank's computer, and how it was their policy, I thought that I would have better luck just going down to the bank in person. Surely, they could not look me in the eye and tell me with a straight face that this was their policy.
Not only was it just as infuriating to try to point out the basic unfairness of having bounced a transaction because they were holding money, and then to bounce the transaction that they had held the money for, then the bank manager started questioning my expenditures. "Starbucks is a hurricane expense?" with raised eyebrow - darn skippy it is! I can live without electricity or water, but not coffee, and what business is it of yours anyway?
Mostly because the manager could tell that I was going to sit there and argue about it until closing time, I was offered an account adjustment, with no admission that they had made a mistake. I took the adjustment, and also took all of my money out of that bank the very next day. I might not have had much in my checking account, but I had over $10,000 in my savings.
Sep 11, 2007
After reading some of the unpleasant stories about Wachovia, I just wanted to relate my very positive experience with them.
After I pulled my money from the horrible overdraft paradox bank, I opened an account online with Wachovia. When it got to the part about ordering checks, I said I didn't want any, as I was planning to order them from one of those cutsie check companies.
Well, a week or so later, I got a big box of checks in the mail (ugly ones) from Wachovia. After my recent bad experience, I was dreading having to fight to get the $16 charge removed for these checks I had never wanted.
When I walked in to my local branch for the very first time, someone in one of the glass offices noticed the box of checks in my hand, and walked up to me to ask if there was a problem even before I got in the line for a teller. I told her I hadn't ordered the checks, and she immediately ushered me into her office, and removed the charge from my account, with no further questions.
She told me if I wanted, I could keep the checks, since they would just destroy them. But, I already had the other checks I had ordered on the way and really didn't need the Wachovia ones. I ended up keeping one book of checks to "tide me over", and she took the rest to run through the bank's shredder.
Whenever I walk into any of the local Wachovia branches, I am treated pleasantly and personably. I haven't had any further problems with my account, but I have seen them handle other people's issues quite nicely.
I agree that you can't beat most credit unions for great customer service and reasonable fees, but if you have to deal with a big bank, in my area Wachovia is the best.
As a former banker of "The Good Ol Days" when customer service was the norm, not the exception, I have noticed several major changes in how fees are looked at by bankers.
ITOD (in the old days) an account was closed if it had too many NSF checks. Today, they keep them as they are a great source of profits.
ITOD, the physical checks that would have overdrawn the account were sent to the branch.
Each officer would go over the list and pay or bounce checks based upon their knowledge of the customer. Fees were charged or waived. Fees were NEVER charged for overdrafts of up to $5.00.
The checks were sent back to the main office for processing. So then it was labor intensive and NSF fees were $3.50 to $5.00.
If someone had a lot of checks in the NSF status, then we would adjust the total fee to a very reasonable level, unless that customer had bounced a lot of checks previously.
Then came the bean counters. In old system the banks had no real idea how many fees were waived. It was at the total discretion of the branch.
They started automatically charging the fees for every check on the NSF report and you had to "refund" any fees you waived.
Then they saw just how much money was involved and just how much was being lost. They started tracking all of the "lost" revenue and woe unto anyone who was too generous by waiving fees (hence the current attitude of tough love by banks).
They also found out they could make even more money by increasing the fees. So they did.
The cost of processing NSF checks is now a pittance. It is all done electronically so there is no direct relationship of cost to price. The cost has declined dramatically but the NSF Fees have risen dramatically. Nice win for the banks huh!
ITOD deposits were ALWAYS posted before any checks or other charges. Today way too many banks post the checks and other charges first, creating more $95% pure profit NSF Fees.
ITOD the smallest checks were ALWAYS posted first to minimize NSF Fees. Today the largest checks and other charges are now posted first to increase those wonderful NSF Fees.
With total electronic posting, your check is never returned to your bank, only a digital copy is made by the initial receiving bank with the charge being sent directly to your bank's computers. This can happen most any time of the day.
ITOD all of the checks, deposits and other charges were processed after the close of the bank. Today, many of them post continually during the day so if you have a check post at 10AM that would overdraw your account then an NSF Fee would be charged even if a deposit was posted even a couple of seconds later.
It is all geared to, well, uh fleecing the customer. No other way to put it.
The banks make BILLIONS each year on these fees. Yes that is correct BILLIONS.
Presently I use credit unions. They are more like the old time banks but they are starting to catch up with the big banks.
If you can, use a credit union or a small bank. You will be sooo much happier and you will get to keep more of your money too.
With a credit union you can actually talk to an executive that can and will try to take care of you. Try talking to any executive above branch manager at any major bank. It is almost impossible. If you do somehow get the number and actually talk to one of them, usually the first thing they want to know is "How did you get this number?
If they abuse you, you can file complaints with the state banking commission, FDIC, Comptroller of the Currency and or your attorney general. Federal charted banks answer to FDIC, Comptroller of the Currency, your state and federal attorneys general.
You can also file with the local Better Business Bureau. For the really ridiculous fees (Mine was Compass Bank charging $122.00 for a TEN CENT overdraft) then let your local tv investigative reporter know about it. Banks just HATE negative publicity.
If they are wrong and just ripped you off, sue them in small claims court.
Happy banking (probably not in this life though).
Sep 17, 2007
Some of the stories here are really horrifying, as though the banks really are out to squeeze the customers HARD... mine is a story of mere low-value incompetence but I took it as a sign to steer well clear of that bank in future.
When I was just a boy, my parents took me to open my first account with Barclays Bank and I got a moneybox in the shape of a bank, yippee. A few years later I opened an account HSBC (then the Midland Bank) and got a free sports bag. Fifteen years later I'm in my first job and still have these two accounts; for whatever reason I use the HSBC for my paycheque and my bills but Barclays had a branch right next to where I lunched so I used it to pay in small cheques from stuff I'd sold (ebay and whatlike). Because I use HSBC for most of my banking I don't pay much attention to the statements from Barclays...
One day Barclays send me an advert for a debit card and I think "hey, why not" and send off an application. A few weeks later it's declined... because my account was closed six months ago! I go into the branch to find out why and apparently it's "policy" to close accounts that haven't seen any transactions for six months... but (a) why wasn't I told my account had been closed, (b) where is the balance now, and (c) where's the money from the cheques I paid in only a few weeks ago???
To cut a long story short, I opened a new account with them but it took about a couple of months for the bank to "recover" my old balance (a couple of hundred UK pounds), and another month to "recover" the money I'd paid into the "closed" account (another hundred pounds or so)... how can you pay money into a closed account anyway, shouldn't this have led to something in their system screaming? I didn't make a fuss, but I took it as a signal never to do major business with Barclays, as if they can "lose" a few hundred pounds of my money of course they can "lose" much much more.
Every business can make mistakes - banks are no different in this respect - but it's how they deal with the mistakes that distinguishes them. Fix a mistake quickly & easily and you'll have a happy loyal customer. Refuse to address the mistake and yes, you may keep a few extra pounds in fees or overcharges or whatever, but you'll lose much more in the future business that customer would have conducted with you.
A few years later I went overdrawn in my HSBC account when my wages weren't paid (long & boring story) - fair enough, I should have noticed and moved some money from my savings to cover the direct debits. Immediately I noticed I went to my branch to find out what I'd be charged for this... but the manager couldn't tell me, or even take a ballpark guess! As it happens it was only a few pounds, but the mere fact they couldn't give me any information beyond "you should pay this off ASAP" rubbed me up the wrong way so now I've left them too.
Oct 2, 2007
I've got a few to share as well:
About 10 years ago, my aunt sent me a check for $20 for my birthday. I didn't have a bank account, so I went to her bank to cash it. I was told without an account, I'd have to show proper id. No problem I said, and produced driver's license, photo health card (this was in Ontario), SIN card, birth certificate, student card, library card, video cards, etc...
Apparently that wasn't enough.
When I did start banking, I just used ATMs and phone banking. I think I went about 4 years without actually setting foot in a bank. Then one day at work I was asked to go to the bank next door and get a ten changed for a roll of quarters. I was kinda shocked to see that a teller now has to get money passed through this hermetically sealed fortified bunker... but not as shocked as I was 25 minutes later when I got to the front of the line and was told I couldn't get change unless I opened an account with that bank.
I gave up on the bank I'd been using when my rent check bounced because the $600 CASH I'd deposited into the ATM NINE BUSINESS DAYS earlier was "being held until it clears."
The last straw for me came when I was checking out which bank to switch to, and read the fine print. Among many other things which have already been mentioned, the one I refuse to accept is this:
EVERY major bank reserves the right to disclose your demographic information at their discretion. [Meaning: Sell to marketing groups your age, occupation, what sort of places you spend money at, how much, and how often, etc.]
I've been with the smallest credit union I could find since then.
Oct 11, 2007
Recently I was unceremoniously "dumped" by an employer for whom I had been a loyal hard working employee for over 10 years. I had been in their 401K program for 9 of the 10 years there, amassing upwards of $75K in my account. I had taken out a small loan ($5,000) to help my son with his college expenses. Of course I am borrowing from myself as all interest paid goes back into my account.
At the same time as my termination (end of business fiscal year), my former company announced that they were transferring all 401K accounts to a new holding/processing company. The new company would be CITISTREET who would henceforth handle the retirement accounts. Within several weeks I received a notice that they were informed of my termination and that I had an outstanding loan which needed to be paid back. I was given the option of bank draft direct from my bank account.OK, fine, I was already paying it back through the previous processor using payroll deduction. I called the customer service group that specifically handles my former employer's account to discuss how to set up payment drafts from my bank account.
I was told that there was no such option and that I would have to pay the loan in full immediately or it would be considered a disbursement of funds (which I would have to pay "today's tax rate" on). This was completely opposite of what the letter had stated. Obviously the person telling me this didn't know what she was talking about (just a place holder in a call center somewhere).
I decided to visit the website and attempt to set up a payment plan. My outsanding balance was now around $1,750 and I was successful in setting up a payment plan to fully repay the plan at approximately $149/mo for about 12 months.
The first month's payment was successfully withdrawn from my account. In the meantime, I started receiving auto-generated notices of termination notification and loan reammortization. HOWEVER, the reammortization was for $5,000 and the payment plan was requiring $162/mo for 31 months! I called the same customer service group and again talked to someone who had no idea what she was talking about. This CS agent just restated what the letters were stating. She seemed unmoved by my plight that well over half the loan had already been paid and the required payments would equal an amount much greater than the balance owed. It was explained to me that she could not actually look at my account to review the situation. Workers at her level were not privy to the information. I asked if I could speak to someone who could review my account and she said no because their telephone conversations weren't being recorded like hers was.
I then asked to speak to a supervisor and after a lengthy wait was connected to a gentleman who explained that only supervisors were allowed to review accounts. OK, fine, again. He looked at my account and saw the errors and said he would have to talk to the accounting department (the same folks I'm not allowed to contact because their telephone conversations aren't recorded). About two weeks later I received a "corrected statement" showing aproximately 11 payments at $162/mo, to fulfil the loan repayment. Since then I have received, like clockwork, auto-generated statements with notice of termination, outstanding loan, reammortization and 31 months payback. I emailed the supervisor about two months into this comedy and again received a corrected statement now showing 10 months of payment required. Since that time, I am regularly receiving additional auto-generated notices of termination, loan reammortization and 31 month payback. I now have a file folder almost 1 inch thick with all the paperwork.
MY GREATEST CONCERN is that if they are screwing up this end of the company so badly, what on earth are they doing to my retirement funds??? I am now looking for somewhere that I can roll my funds to be done with them once and for all!
Oct 20, 2007
I do not understand why we "we the people" can not initiate a bill or law that limits banks from charging these NSF fees. Why doesn't some one stop them!! a check is a contract between the issuer and the payee and we have a legal system to enforce the law.
So why has no one attempted to rally the banking commission and have fair practice like if you overdraw your account and the bank pays it you have 24 hours the deposit the money and after the 24 hours the check is returned and a small ($5 or 1% fee) is charged. If you need more time then a 1% per day fee is applied so on a $1000 check it would be $10 per day, now that is fair.
If I knew how to go about stopping or regulating them I would, anyone have any ideas?
Oct 26, 2007
(Read the article that everyone's commenting on.)