Complaint Review: Washington Mutual

On more than one occassion I made deposits of local checks with WAMU that had "no hold" at time of deposit according to the deposit records/teller. Days later a "fourteen day hold" notice arrived in the mail; applicable to the same "no hold" deposits. The local checks I deposited cleared in one day, of course. WAMU does not follow regulations according to my written records and evidence. Manipulation of deposits could and would cause a financial institution to earn substantial fees and would cause a consumer substantial embarrasment. My experience shows that WAMU uses arbitrary rather than real time deposit application.

On more than one occassion I made deposits of local checks with WAMU that had "no hold" at time of deposit according to the deposit records/teller. Days later a "fourteen day hold" notice arrived in the mail; applicable to the same "no hold" deposits. The local checks I deposited cleared in one day, of course. WAMU does not follow regulations according to my written records and evidence. Manipulation of deposits could and would cause a financial institution to earn substantial fees and would cause a consumer substantial embarrasment. My experience shows that WAMU uses arbitrary rather than real time deposit application.

On more than one occassion I made deposits of local checks with WAMU that had "no hold" at time of deposit according to the deposit records/teller. Days later a "fourteen day hold" notice arrived in the mail; applicable to the same "no hold" deposits. The local checks I deposited cleared in one day, of course. WAMU does not follow regulations according to my written records and evidence. Manipulation of deposits could and would cause a financial institution to earn substantial fees and would cause a consumer substantial embarrasment. My experience shows that WAMU uses arbitrary rather than real time deposit application.

this is a cut and paste from a predatory lending website--

CRL, 53 Other Groups Call on Fed to Curb Banks' Abusive Fee-Based Overdraft Programs
January 28, 2003

Consumer Warning Issued on Abusive Fee-Based Overdraft Programs

DURHAM, NC. - Calling fee-based overdraft programs now being used by 1,000 banks and other financial institutions "a hidden and unfair tax on the most vulnerable depositors," 54 national advocacy groups - including the Center for Responsible Lending (CRL), National Community Reinvestment Coalition, National Consumer Law Center and ACORN - are calling on the Federal Reserve Board to implement minimum disclosure and consumer protections for fee-based overdraft charges and "free checking" accounts.

The Center for Responsible Lending also issued a consumer warning alerting consumers to the differences between abusive fee-based overdraft programs and legitimate overdraft protection.
"We urge the Federal Reserve Board to recognize these fee-based overdraft programs for what they are - predatory consumer lending," said the 54-group letter. "We are concerned that banks may be steering low and moderate income customers to this high-cost credit, rather than to the much more affordable credit alternatives offered to wealthier customers."

Groups call for Truth in Lending regulation on overdraft charges

More than 1,000 banks and other financial institutions now offer programs that charge fees to cover check or ATM overdrafts, but they are not required to disclose their true cost as loans to consumers. The new programs pay overdrafted checks and charge a flat fee (typically $20 to $35) for each overdraft, equivalent to 1,000 percent interest or more on an annualized basis, instead of the annual 6 to 18 percent interest typically charged by banks on lines of credit to more established customers.

"It's very simple: these are very high-cost loans, and should be disclosed as loans," said CRL spokesman Eric Stein. "If you have $80 in the bank and go to an ATM asking for $100, many banks will give you the $100 without mentioning that you're overdrafting your account. By the time you pay the $21 overdraft fee and re-pay the $20 balance a week later, you've paid a 5,475 rate of interest, and this fact was never disclosed."

Stein added: "We've asked the Fed to revise its regulations to require financial institutions to treat fee-based overdrafts as loans under the Truth in Lending Act - then at least consumers would know what they're signing up for."

"Outdated" Fed regulations hide consumer costs.

Banks induce consumers to open accounts with these high-cost fee-based overdraft programs through offering "free" checking, but the advocacy groups questioned how "free" the service is.

"These are linked services," said the CRL's Stein. "By marketing with the promise of 'free checking,' banks can find customers most likely to be susceptible to overdrafting their account, without being required to disclose the fee-based overdrafts as loans. These lenders take advantage of an inadvertent loophole in the Fed's regulations, since a checking account can be called 'free' so long as there is no minimum balance, even though the account may be structured with the purpose of repeatedly charging large fees."

The letter also requests the Fed to clamp down on banks that intentionally put accounts into overdraft by paying larger checks first. "Banks say overdraft protections aren't loans, but a consumer convenience," said Stein. "If it were, the banks would pay smaller checks first, and then pay a small number of larger checks as an overdraft - this would save consumers money. But they don't, and consumers are caught paying overdraft fees for many more checks."

"We often hear about the policy advantages of serving the unbanked in our society," Stein said. "But abusive bounced-check and 'free checking' programs aren't providing real banking services for low-income consumers - they're taking advantage of their lack of sophistication to drive up banks' fee income."

CONTACT: Christine Kraly, for the Center,
703/276-3258 or ckraly@hastingsgroup.com.

I am definitely going to agree with the original author. I feel that if someone deposits money into the bank and the funds are always held for a lengthy amount of time, when it's time to pay your bills, what do you do? Of course, the bank will charge these o/d fees and explain that writing a check and not having the "available" funds are fraud. But, if you are depositing your local checks into your bank account(no place is safer, for your finances, than the bank, right), for some ODD reason you rely on this money to pay bills, so you write the checks out, because the money has already been deposited, and it will clear.

However, your bank continues to exercise their right to place extensive holds on your account due to o/d's, therefore, the payment you tried to make, in good faith, is returned, along with the rest of your bills.

So you've accumulated some hefty fee$ GREAT for the bank, a nightmare for the customer, the person/people you cherish, and now, because of the overdrafts, that was caused by the bank, the customers money is being held, because the money is there, just "not available" at the time. This account is being overdrawn because the bank is being ignorant....

Oh, I mean, difficult. By the way, since, you seem to be some sort of authority on defining fraud, on behalf of, Washington Mutual Bank, maybe, you can explain if my "situation" is fraud or am I somehow faulting Washington Mutual Bank, for events that took place, beyond their control, Hmmmmm????? I Wonder...????

Jacqueline Blount
Go Navy!!!!

Not all CSR's are as responsive to problems as they should be. We has a problem about three months ago with unauathorized ACH debits from our account (and we deposit about $7500 per month on the average)and the rep kept giving us forms to fill out. We filled them out and she said she needed "more information." If we had HAD more information, we surely would have given it. Due to the unauthorized activity, we got almost $700 in charges that were only reversed due to the intervention of our attorney. We were asked after he got involved if we wanted to open a new account, but we declined as we had already opened elsewhere, plus I have my Kaiper Credit Union account.

Until then, our experience was overall okay. But they lost us due to the lack of response to a very bad situation. The reps SHOULD be more forthcoming when you open an account about the 10 day hold placed on PAYROLL CHECKS, however. We found out the hard way.

I dont know where to start....
first, holds, like everything else in a bank are
federally regulated and a 15 day hold is not
possible, further you are notified when you make the deposit that your check is on hold, if you are writing checks to cover your bills prior to making the deposit... that, my friend is called fraud. 800.00 in o/d fees? thats 39 overdrafts in one month... you're going to try and blame that on the bank? who are you kidding? wake up, take resposibility for your own actions...WAMU banks in real time, if you honestly made a deposit first thing it would show up first thing. i suspect you would have these problems with any bank, you need a nanny not a financial institution. i have worked for 4 major banks and WAMU works much harder to provide quality customer service. but some people will always be a problem, i mean have a problem.................

I dont know where to start....
first, holds, like everything else in a bank are
federally regulated and a 15 day hold is not
possible, further you are notified when you make the deposit that your check is on hold, if you are writing checks to cover your bills prior to making the deposit... that, my friend is called fraud. 800.00 in o/d fees? thats 39 overdrafts in one month... you're going to try and blame that on the bank? who are you kidding? wake up, take resposibility for your own actions...WAMU banks in real time, if you honestly made a deposit first thing it would show up first thing. i suspect you would have these problems with any bank, you need a nanny not a financial institution. i have worked for 4 major banks and WAMU works much harder to provide quality customer service. but some people will always be a problem, i mean have a problem.................

I dont know where to start....
first, holds, like everything else in a bank are
federally regulated and a 15 day hold is not
possible, further you are notified when you make the deposit that your check is on hold, if you are writing checks to cover your bills prior to making the deposit... that, my friend is called fraud. 800.00 in o/d fees? thats 39 overdrafts in one month... you're going to try and blame that on the bank? who are you kidding? wake up, take resposibility for your own actions...WAMU banks in real time, if you honestly made a deposit first thing it would show up first thing. i suspect you would have these problems with any bank, you need a nanny not a financial institution. i have worked for 4 major banks and WAMU works much harder to provide quality customer service. but some people will always be a problem, i mean have a problem.................

I dont know where to start....
first, holds, like everything else in a bank are
federally regulated and a 15 day hold is not
possible, further you are notified when you make the deposit that your check is on hold, if you are writing checks to cover your bills prior to making the deposit... that, my friend is called fraud. 800.00 in o/d fees? thats 39 overdrafts in one month... you're going to try and blame that on the bank? who are you kidding? wake up, take resposibility for your own actions...WAMU banks in real time, if you honestly made a deposit first thing it would show up first thing. i suspect you would have these problems with any bank, you need a nanny not a financial institution. i have worked for 4 major banks and WAMU works much harder to provide quality customer service. but some people will always be a problem, i mean have a problem.................