Bank of America ripoff Transaction Processing Structured to Exact the Highest Fees Charlotte North Carolina
Last week I was running my balance pretty close to the bone, it being christmas and all, spending money on loved ones all of that good stuff.
I was not surprised to find that I had incurred an overdraft fee while waiting for some checks to come in and clear. What I was astonished to find is that Bank of America has structured it's transaction processing in such a manner as to increase the number of overdraft fees it can charge customers. I am not saying that Bank of America has structured it's transaciton processing this way for the sole purpose of ripping off customers, but I haven't found a compelling argument to support any other claim.
How is this accomplished. Bank of America Processes all transactions from Highest amount to Lowest amount. That means that if you have 5 checks that clear on the same day they post the largest amount first, the second largest amount second and so forth. Can you see how this increases the fees charged to customers for "Overdraft Protection"?? If not here's an example using some numbers.
Scenario 1: Customer X has 500 dollars in their checking account. On the 5th day of February 5 checks post in the amounts of $425, $80, $50, $35, $20. Using the BofA approach the $425 is processed first leaving the customer with a balance of $75, the other four are then processed resulting in 4 Overdraft fees.
Scenario 2: Customer X has 500 dollars in their checking account. On the 5th day of February 5 checks post in the amount of $425, $80, $50, $35, $20. Using what I consider a more reasonable approach the $20 is processed first leaving a balance of $480, then the $35 resulting in $445, then the $50, resulting in $395, then the $80 resulting in $315 then the $425 resulting in one overdraft.
I am not arguing that an overdraft has occured. I would fully expect the account holder to pay a $30 overdraft fee. What I do object to is that the order of the processing, which seems capricious at best is resulting in much higher fees being assessed.
When I explained this to the BofA customer service rep he was combative and obtuse. He kept bringing up the point that BofA has the right to process their transactions however they choose. I was not debating this point with him, I simply stated that if they process their transactions in such a manner that cause excess fees to be charged to their customers that they should be willing to waive some of those fees. It's unfair for BofA to assume that customers will know when checks will be processed by the bank. Balancing a checkbook is one thing. Timing when the bank is going to recognize cash flows is quite another.
Rusty
Charlotte, North Carolina
U.S.A.
2 Updates & Rebuttals
Tim
Dallas,Texas,
U.S.A.
OD fees are not your friend
#3UPDATE Employee
Sun, May 04, 2003
I work for this company and I do not get bonuses for this fee. Please be aware the od fee is a profit builder and deterrant. Profit builder because some people do not know how to balance their check book and control there spending habits. This makes money. The deterrant because in many states it is illegal to write bad checks.
Checks are a legal document guranteing the payee payment. If the payee does not get paid it is a form of STEALING. Merchants do not accept checks because of this.
It is your responsibility to keep up with your cash not the banks! If you need an account then get one don't depend on your bank, credit union, etc. to manage your cash. Also I STRONGLY sugguest reading the brochure regarding the banks responsibilty and yours.
Therefore when you run into a problem you can't be surprised!!! An one more thing, in most cases the bank pays the item and does not return it back to the payee. Thanks
Wright
Iowa Park,Texas,
U.S.A.
Either way,you're stuck
#3UPDATE Employee
Sat, February 22, 2003
I work for B of A and I agree. They have tried both ways many times and it's a no win situation. If you pay all the little checks(the store, the movie place,Wal-Mart) and return the big check(the mortgage payment), how will that affect you? If you bounce a check to your mortgage company or to your car finance company, chances are you will have to send your payment in the form of a cashier's check or money order from that point on.
Either way it's done, someone is going to complain. The moral of the story is, don't write a check unless you have the money in your account and then you'll never have to worry about it. All banks count on people like you to make money. They'll get it one way ar another. Do your best to stay inside the lines that they set up. If you don't have the money, don't write a check for it!!