Compass Bank NSF Fees Ripoff Austin Texas
As a former five-year employee of Compass Bank I can tell you that the new posting system they are now using is designed to charge more NSF fees to customers and therefore make more income for the bank. You will be told it is their way of moving closer to an "online system", but that is simply not true. Almost every other bank out there today has an online system and has for many years. Converting to an online system has nothing to do with their current policies.
They have a new system called "EDP" or Effective Date Posting. What this means is that items are run either as EDP or current day depending on what time they are presented to the bank. It used to be that all credits posted before debits, but under the current system that is no longer true.
For example, if you come to the bank at 8:30 in the morning and write a check for cash it is considered EDP because it happened before the bank opened for business that day. If you came later in the afternoon to make a deposit, but before the cut-off time, it would be considered current day and would post that night at midnight after the cashed check.
Where the real problem comes from is direct deposits. The money from a direct deposit comes into your account sometime after 12:01 a.m. on the day you get paid. It is immediately put into your "available" balance, meaning you are able to use that money. Here is the catch now: even though that money has been collected from the other bank and put in your available balance and you have access to it, and the deposit occurs before the bank opens for business, it is considered a current day item, meaning it will post last to your account. If another item comes to the bank that day and is presented against your posted balance it would be considered EDP and if you didn't have enough in your collected balance, then you will be charged a fee even though you have the money available to you. (Checks didn't clear in the morning before, only at midnight of the same business day, but under the new Check 21 law that was passed by the government, checks are clearing electronically now at a much faster rate and both at night and in the morning).
The reason I am reporting this is because I became a victim of this myself last week. Mind you I worked for this company for five years and have a total of twelve years of banking experience and have never bounced a check. There is not one page of documentation where they can show me that my account ever went into the negative, yet I was assessed five NSF fees. The employees of the bank couldn't even explain it to me-even they don't know how their system works.
I am fortunate as I still have friends who work there and I was able to get a refund of some of the fees, but I know for most of you that is not the case, especially since the bank issued a mandate at the beginning of the year that no one was to receive a refund of more than $70. If a former employee of the bank and a twelve year banking veteran cannot figure out this system, how is the average consumer going to understand it?
I cannot see how the practice of making money available -money that the bank has collected from another bank-to a customer, but then charging them NSF fees if they use it before it officially "posts" to their account is legal. It certainly isn't ethical. What is the point of direct deposit then? It used to be so you had immediate access to your money and didn't have to go to the bank. Now you can still use it immediately, but you may be punished for it.
It might be better to go back to the good old days of taking your check to bank and cashing it. You may have to pay a small fee, but it's a heck of a lot cheaper than NSF fees. I hope someone does the research to find out if this practice is legal; I cannot fathom how it could be. And I hope someone files a lawsuit against them.
As a side note: People always asked me how we were able to offer free checking and pay for ATM fees. Because of the revenue generated from NSF fees, that's how. Most people who want free accounts live paycheck to paycheck (as most of us do) and they count on you bouncing things. They hope you bounce things. You would pass out if you knew just how much income each branch takes in every month in fee income.
Amy
Austin, Texas
U.S.A.
2 Updates & Rebuttals
Amy
Carrollton,Texas,
U.S.A.
$36 a pop, those fees are tough to take and add up really fast, most banking centers have seen their fee income rise considerably, which is of course their intention
#3Consumer Comment
Thu, August 18, 2005
You have three different balances on the Compass system: your collected, your posted and your available balances. Confusing huh? Your posted balance is what you end with after all credits and debits have posted to your account at midnight of that business day. Your available balance takes that balance minus any incoming electronic checks (due to check 21 processing) and adds in any direct deposits the following morning. Your collected balance is what the bank has actually collected from all of the checks that you deposit (they give you next day availability on all deposits if there is no hold placed, and then it takes a few days for them to collect that money from the other banks.)
Under the new EDP system, any checks that come into the banking system in the morning through the check 21 electronic process are considered EDP items and will post first. Your direct deposit comes in in the mornings as well, but they are conveniently considering this a same day item, meaning it will post last behind any EDP items. Which is what happened to me. I waited until the direct deposit was in my account and in my available balance before I made some online payments. But according to the new system, since the deposit was not in my posted or collected balance, and even though I had access to the funds because they made them available to me, some of the online payments came through first (again, even though I made them AFTER the direct deposit) and were processed as EDP items that night before my direct deposit. Neat, huh? For many years once your direct deposit was in your account, that was that. You could use that money right away. And technically you still can, but you have to watch out because you may get fees. That is what I mean when I say that I cannot beleive this process is legal. The money has been transferred and collected from the other bank(electronic funds are always good, collected funds) and they put it in your available balance and allow you to use it.
I left the bank at the first of the year just as this new system was going into effect. It is a nightmare and I'm not kidding when I say that even the people who work there cannot explain it to a customer. I can't understand it and I worked in banks for 12 years! I truly feel sorry for the customers. It is one thing to intentionally bounce a check or try to float a check and hope your deposit makes it in first, but when a bank changes their system that had been in place for many years and then doesn't bother to explain the changes to the customer, that is not ethical. I'm sure they sent out some notice to everyone in banking language that no one can comprehend.
The bottom line is, I wouldn't spend beyond what is in your posted balance from the night before. Even if your direct deposit is there and available for withdrawal, I would wait until it posts to your balance that night and then begin using it the next day. That's why I almost think it's better to take your darn check to the bank and get cash in hand. Sad, isn't it?
I'm sorry for the long-winded explanation. I just really want to let people know what is going on because at $36 a pop, those fees are tough to take and add up really fast. And I can also tell you that since the new system went into effect, most banking centers have seen their fee income rise considerably. Which is of course their intention. Not all banks are evil or are out to get everyone, but yes, they do devise ways to make extra fee income. That is their biggest moneymaker.
Doug
Houston,Texas,
U.S.A.
Thanks, Amy
#3Consumer Comment
Wed, August 17, 2005
Really appreciate the info you posted. A couple of things were not real clear to me though.
You said that "if you didn't have enough in your collected balance then you will be charged a fee even though you have the money available to you." What is "collected balance?" I understand "posted" and "available" but not what "collected balance" is.
Is what you are saying is that if you have say $100 in "posted balance", $1100 in "available balance" (as if a $1000 direct deposit was made that day)that if a $200 check is presented that same day it will be treated as NSF because the $100 "posted balance" is not sufficient to cover the $200.00 check?
Really appreciate the info you have posted. I have never been hit with an NSF fee at Compass YET, but it sure looks like they will do anything they can to generate one!