Bank of America Overdraft Rip Off Internet
My complaint is with Bank of America, I feel they have created an overdraft system that is designed for them to make huge profits off the people who are the least able to afford it.
I know that I was in the wrong when I wrote a check on a Sunday that I knew was $100 over what I had in my account. But I also knew that I would have cash the next day to deposit and cover the check. Unfortunalty a car accident prevented me from making it to the bank the following day in order to deposit the necessary money.
With the system that BOA has in place, all charges that are made as credit typically pend for several days before they post to your account. So what BOA does is when those charges actually post they arrange them in order from the highest to the lowest, which I think is absolutly unfair and done specifically so they can reap the most money from an overdraft.
So, instead of me having one fee of $35 for that check, I ended up with about $350 in fees because of 8 transactions that had been made the previous Thurdsay, Friday and Saturday before I even wrote the check.
Because checks don't pend, they just automatically post that whole Monday after I wrote the check my account was fine, but then Tuedsay morning, it showed that the check had posted on Monday and of course it was the first transaction of the day, leaving me with 8 other transactions that were made prior to the check to be charged with overdraft fees.
On top of that I was going out of town on a business trip that Tuesday morning and wouldn't be returning until Sat. So I went to the bank that morning to see what could be done and because I still had two other transactions pending and I wanted to avoid two more fees. They told me nothing could be done because the actual overdraft fees hadn't been charged to my account yet. So I deposited enough money to bring my account into the positve and to cover the two pending transactions.
I explained that I was going out of town and wouldn't be able to deal with this until the following Monday, because I was concerned about a new fee that BOA has adopted, if you don't pay your overdraft fees within 5 days they charge you another $35.
An employee told me not to worry, that I had 5 business days from when the overdraft fees were charged to handle the matter. Well he misinformed me, it's actually 5 bus. days from when your account becomes overdrawn.
In addition to that, they rearanged the transactions again so that all the overdraft fees were posted and then my deposit that I made to cover the two pending transactions. So I ended up with two more $35 dollar fees and an additional $35 fee for not being able to pay it all off within 5 days, making that a grand total of $350 in overdraft fees.
When I called customer service all I wanted was for 1 or 2 of the fees to be removed. I though that this was fair considering that their employee misinformed and the fact that I was out of town with no vehicle and no way to deal with the situation and they refused to help me. They just kept saying unless it's fruad or a bank error we can't remove the fees. Well how is their employee giving me the wrong information not a bank error.
Any way I ended up borrowing the money, paying off the account and closing it. I know most banks have the same polocies, but I just really wanted a fresh start with someone else. I hate BOA and will forever discourage anyone I know from doing business with them.
In my opinion this whole overdraft system is set up so that banks can make money off the people who can least afford it. Why do they think people overdraw their accounts, because they are rich, not likely. And then they come up with this new fee for not repaying in 5 days. Obviously if your account is overdrawn it's because you don't have money, so lets make you even more broke than you already are.
Honeslty I would prefer that they just didn't cover anything. If I don't have the money then the card shouldn't work. Or if it's a check send it back to the merchant. If that's what they would have done I would have had one $35 fee from the bank and a $25 fee from the merchant. I don't know about you but, $60 sound a whole lot better than $350.
Something needs to be done about this banking system, it's hurting the people who can least afford it. The fees should be a % of the amout you overdraw, not a set fee. How does it make sense to be charged $35 when you overdraw for under $5. Thats over a %100 they are charging you. Absolutly insane, it should be illegal.
4 Updates & Rebuttals
Karl
highlands ranch,Colorado,
U.S.A.
Quote: "BANKING WAS CONCEIVED IN INIQUITY AND BORN IN SIN. IF YOU WANT TO CONTINUE TO BE SLAVES OF THE BANKERS.....
#5Consumer Comment
Fri, September 11, 2009
AND PAY THE COST OF YOUR SLAVERY, THE LET THE BANKERS CONTINUE TO CREATE MONEY & CONTROL CREDIT." - Sir Josiah Stamp, former head of the Bank of England. You can 'Google' JOSIAH STAMP, and read about him, if you'd like.
Ronny g
North hollywood,California,
U.S.A.
You messed up..but the bank still did wrong as well..
#5
Fri, September 11, 2009
You were wrong to write a check that was greater then what you had in your account. That is called floating and although the bank will cover it in most cases..it is technically not legal. So although you had good intentions to make a deposit to cover it, I can't in all fairness blame the bank for this, an unfortunate circumstance prevented you from getting the deposit in on time..and hence it was going to cause an overdraft as per the overdraft policy of your bank.
Has far as the re-sequencing the bank did from highest to lowest..I have to agree that correct..this practice allows the bank to charge additional fees for transactions that actually had the funds available at the time of transaction..and hence many feel this practice should not be legal..and question if there is any current violation.It is true that many banks do this..but regardless of what some may tell you..not all banks or credit unions do. It is up to you to make sure of this before to open an account..as the banks that do this are certainly not going to advertise it. what they are going to do is anything they can to encourage overdrafting..as they make billions off the additional fees brought on by the re-sequencing scheme.
You seem quite aware of what caused the overdrafts so I need not waste space explaining how to prevent them. For someone like you what you should do is request from ANY bank you deal with to opt out or decline this type of overdraft protection. What this will do is cause the transaction to be declined at ATMs and point of sale..and will prevent the avalanche of fees. You have the right to request this..but of course it is not in the banks best interest, only yours.
I understand you are upset about this...and I hope you are more careful now that you are fully aware of what will happen when you overdraft. You will believe you are going to incur a fee for the overdraft, but will find the bank will resequnce you transactions to charge additional fees. The bank does not care if it causes you hardship so yes..you need to carry some responsibility.
As far as what can be done...no promises can be made as the powers to be are very well connected and funded. But as a citizen and and consumer..you have rights..and together perhaps we can start to bring on change..how we vote etc. As well..I will pass on the following information, use it as you see fit...
H.R. 946, introduced in the US House of Representatives on February 8, 2007, would increase regulation of overdraft loan programs. The proposed legislation would Amend the Truth in Lending Act (Regulation Z) to clarify that overdraft fees are covered, require written consent before enrollment in the overdraft loan program, require financial institutions to warn the customer when an ATM withdrawal will trigger a fee, and prohibit financial institutions from changing the order of check clearing or delaying the posting of deposits solely to increase overdraft fees. This bill was referred to committee in April 2007 and died in committee.
As of February 2009, the FDIC was taking comments on the issue.
I am not allowed to give out websites or phone numbers here it seems but if you google "Finkelstein Thompson LLP" you can find out how to contact them to help with an "investigation" if you have been a victim of this "re-sequencing" which directly caused the ADDITIONAL fees on top of the actual legitimate overdraft(s).
Not unlike so many other rip off reports on the banks doing this..almost every one thinks this should be illegal. Whether it is or isn't..many agree it should be so we can either sit on our laurels and do nothing..or fight a little for it.
It is alleged that some banks, are in violation of 12 U.S.C. 4303(b)(1) for their failure to disclose that the condition precedent of a pre-existing overdraft could cause the assessment of additional overdraft fees. Instead, the banks have been lying to consumers that the condition precedent was insufficient funds.
[The true reason why you were assessed the additional overdraft fees that you did NOT cause is because you actually had a pre-existing overdraft in your account that the bank used to manipulate your account to create additional overdraft fees by a creative accounting practice].
[The bank then falsely accused you of being at fault for the additional overdrafts you didnt cause by lying to you about having insufficient funds in your account. In fact, without the pre-existing overdraft(s) in your account (condition precedent), it would have been IMPOSSIBLE for the banks creative accounting practice to have assessed additional overdraft fees against you that you did not create].
[That is why the bank engages in tactics to make you overdraft your account. For example, the bank will not immediately post your correct available balance or the bank will drop a hold on your account to only apply it later to make you believe you have more available funds in your account then you do. The bank will also split two pre-existing overdrafts created on the same date so it can create additional overdraft fees on two different posting dates instead of one].
Jim
Anaheim,California,
U.S.A.
This Post Exemplifies The Problem
#5
Fri, September 11, 2009
To the OP, your overdraft wasn't caused when the money was removed from your account; it occurred when you spent the money you already spent while the items were still pending. If you had kept something most people in the United States keep (and that would be a check register), you would not be in this mess because the real balance in your account would be in your register. This is not a matter of a banking system needing to be modified. This has to do with educating consumers that there are no shortcuts to managing your finances. That's what you did. There are zero shortcuts to managing your money.
When you wrote the check, it wasn't simply for $100 more than what was in your account. It was for far more than that. The 8 pending transactions reduce the actual account balance and since overdrafts are based on available balance (account balance less pending transactions), what you had available was far less than what you believed. As you already surmised, anything that is pending and the account goes into the negative - results in an overdraft. You can't even race to the bank any longer; because you can't float transactions with a debit card. No such thing.
Accordingly - this is not a bank issue. This is an account holder issue and it will follow you to the next bank and the one after that. Why? Because all banks are the same with the same policies and the same functions. The only difference between banks is the name in front. There is not a bank in this country you can go to any longer that doesn;t have the same exact policies as this bank. If you don't believe me, I encourage you to go on this website and plug in the name of any bank you can think - go ahead! Do it. You'll find the same complaints written by the same types of people who equally fail to grasp any idea or clue as to how to manage their finances.
Finally, the $35 overdraft fee is a penalty - not interest. Penalties are fixed - just like a ticket for making an illegal turn or running a red. They don't alter the penalty for running the red by how close you were to actually making it while the light was yellow. All of these fees and penalties are very well documented. Even if you overdraw by one cent, you get a $35 overdraft fee. The amount of the overdraft is never the issue and it doesn't matter what you think or what I think. It only matters what the T&C's of the agreement are and since you agreed to abide by the terms of the agreement with this bank (and the next one - and the one after that), you will pay the fee if you overdraft the account. Since the T&C's have been found by the courts to be legal, there is nothing illegal going on.
There's a lesson here when you go to the next bank. Learn from it.
Karl
highlands ranch,Colorado,
U.S.A.
MAYBE THE COMPANY THAT MANUFACTURES THE VOTING MACHINES THAT CAN BE RIGGED TO WIN ELECTIONS...
#5
Thu, September 10, 2009
HAS COME UP WITH A WAY FOR BANKS TO 'MANIPULATE' ITS CUSTOMERS OUT OF THEIR MONEY TOO, right?