- Report: #307062
Complaint Review: Citizens Bank - Northeast Connecticut
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Citizens Bank
http://www.citizensbank.com/home/ Northeast, Connecticut, U.S.A.
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800-922-9999
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Citizens Bank Policy at Citizens allows them to charge you a insufficient funds fee 2X for 1 transaction. Northeast Connecticut
I will state the facts first and after I will make my rant. The facts are sort of technical but worth following so that you can understand this scam. This practice by Citizens is definitely unethical. It involves one of there checking accounts. I know that all the large banks have policies that maximize their fees but I think this is probably as unique as it is disgusting.
Here we go:
On 2/7/08 my online statement shows the following.
1/30/2008 Balance $76.87
1/31/2008 Debit $20.00
1/31/2008 Debit $16.38
1/31/2008 Debit $14.00
1/31/2008 Debit $11.43
This leaves a balance of $15.05 showing as available on 1/31/08
2/01/2008 Insufficient Funds Fee $117.00
2/01/2008 Debit $40.68
This leaves a negative balance of $142.63 showing for the date of 2/01/2008
2/04/2008 Insufficient Funds Fee $39.00.
This leaves the account negative $181.63. This is everything up to date and there are no pending transactions on this account.
I called Citizens customer service and confirmed that they calculated the fees in the following manner.
This is the quick and simple explanation. The amount of $40.68 was pending but withdrawn from my available balance before the date that it actually posted on the 2/01/2008. I was charged 3 fees for going over my available balance. The next day I was charged a fee again when one of the original transactions that was used to calculate me as over the balance cleared. They used the $40.68 to calculate me as over the balance and they used it again latter to add another fee. Essentially they charged me two fees on this transaction and on this transaction alone. They would probably argue that my fee was on another one of my transactions but I don't think the small claims judge is going to see it this way.
I also use BankNorth. They withdraw fees in a similar manner but there policies would have resulted in only one fee because they charge fees for the most part on the payment post date. I am not advocating BankNorth by any means. They have policies that make there fees nothing more than high interest loans in disguise (I'll elaborate more on that in my rant) as well.
Here is some more technical info. Skip it if you already understand how this works.
Citizens and other banks deduct from larger amounts to lesser amounts from your balance in determining your fees.
For example. Lets say you have $40.00 in you account. You go out the same day and make two debits for $2.50 each another for $5.00 and one more debit at $35.00. Your will typically incur 2 fees. It does not make a difference the order you made these transactions. Even if all these transactions post on the same day they do not do you the favor of letting the three smaller debits get deducted first. If they did they would only be able to collect 1 fee from you.
Why do banks do this besides the obvious. If you ask them they might tell you they took a survey and people said they want it this way so that bigger bills are sure to get payed. Bigger bills like your mortgage tend to be more important. The big lie behind this is that more often than not you are only overdrawn by a small amount and the bank will honor all the transactions anyway (usually up to a couple of hundred dollars). In essence loaning you the money. There are laws governing loans but nobody seems to care. They disguise the loan in the language of fees. I am sure the interest rates on these loans have been in the thousands. There should be a class action lawsuit for not disclosing interest rates. A loan is a loan no matter what you call it.
A little aside. I checked my balance on the 1/30/2008 and it showed a sufficient available balance for the $40.68 I charged at that time. Available balance means available after all the electronic transactions have found there way to them and they care to acknowledge them. I think I forgot about a gas charge. They sometimes show up much latter. I made a mistake and fees may be in order but there extraordinary fee policy should be pointed out.
I am switching everything over to my little credit union. Even Banknorth is better than Citizens.
Disclaimer: This info is to the best of my knowledge and may be in error.
(Wouldn't want a slander lawsuit if I was off on something) (Jerks!)
Paul
Somewhere, New Hampshire
U.S.A.
Here we go:
On 2/7/08 my online statement shows the following.
1/30/2008 Balance $76.87
1/31/2008 Debit $20.00
1/31/2008 Debit $16.38
1/31/2008 Debit $14.00
1/31/2008 Debit $11.43
This leaves a balance of $15.05 showing as available on 1/31/08
2/01/2008 Insufficient Funds Fee $117.00
2/01/2008 Debit $40.68
This leaves a negative balance of $142.63 showing for the date of 2/01/2008
2/04/2008 Insufficient Funds Fee $39.00.
This leaves the account negative $181.63. This is everything up to date and there are no pending transactions on this account.
I called Citizens customer service and confirmed that they calculated the fees in the following manner.
This is the quick and simple explanation. The amount of $40.68 was pending but withdrawn from my available balance before the date that it actually posted on the 2/01/2008. I was charged 3 fees for going over my available balance. The next day I was charged a fee again when one of the original transactions that was used to calculate me as over the balance cleared. They used the $40.68 to calculate me as over the balance and they used it again latter to add another fee. Essentially they charged me two fees on this transaction and on this transaction alone. They would probably argue that my fee was on another one of my transactions but I don't think the small claims judge is going to see it this way.
I also use BankNorth. They withdraw fees in a similar manner but there policies would have resulted in only one fee because they charge fees for the most part on the payment post date. I am not advocating BankNorth by any means. They have policies that make there fees nothing more than high interest loans in disguise (I'll elaborate more on that in my rant) as well.
Here is some more technical info. Skip it if you already understand how this works.
Citizens and other banks deduct from larger amounts to lesser amounts from your balance in determining your fees.
For example. Lets say you have $40.00 in you account. You go out the same day and make two debits for $2.50 each another for $5.00 and one more debit at $35.00. Your will typically incur 2 fees. It does not make a difference the order you made these transactions. Even if all these transactions post on the same day they do not do you the favor of letting the three smaller debits get deducted first. If they did they would only be able to collect 1 fee from you.
Why do banks do this besides the obvious. If you ask them they might tell you they took a survey and people said they want it this way so that bigger bills are sure to get payed. Bigger bills like your mortgage tend to be more important. The big lie behind this is that more often than not you are only overdrawn by a small amount and the bank will honor all the transactions anyway (usually up to a couple of hundred dollars). In essence loaning you the money. There are laws governing loans but nobody seems to care. They disguise the loan in the language of fees. I am sure the interest rates on these loans have been in the thousands. There should be a class action lawsuit for not disclosing interest rates. A loan is a loan no matter what you call it.
A little aside. I checked my balance on the 1/30/2008 and it showed a sufficient available balance for the $40.68 I charged at that time. Available balance means available after all the electronic transactions have found there way to them and they care to acknowledge them. I think I forgot about a gas charge. They sometimes show up much latter. I made a mistake and fees may be in order but there extraordinary fee policy should be pointed out.
I am switching everything over to my little credit union. Even Banknorth is better than Citizens.
Disclaimer: This info is to the best of my knowledge and may be in error.
(Wouldn't want a slander lawsuit if I was off on something) (Jerks!)
Paul
Somewhere, New Hampshire
U.S.A.
5 Updates & Rebuttals
Ryan
Jaffrey,New Hampshire,
U.S.A.
Response to Bankworker
#2Author of original report
Thu, April 10, 2008
Here is what Bankworker wrote "This is the customer's fault Banks are more likely to start using this method to assess fees to customers because why?? Customers have complained about the posting procedures/ order of transactions. Whiny customers feel that it's not fair that transactions are held against their available balance, and when merchants provide verification of the charges and a check comes through at the same time, then everything gets posted from largest to smallest and all accrue fees. To pacify the customer, banks started posting transactions immediately therefore eliminating the 'hold' procedure which works more towards the banks advantage than the customers that were complaining about it. Now, you can't overdraw your account and make up for it, even on non-business days. All I can say is, don't overdraw by any means, it will be very expensive. Ultimately, it's still not a ripoff though because the point is, the account should never go into a negative anything..." My response: I never denied that I was at fault. I was. What I was doing was pointing out the fact that you are charged a fee for going over your available balance and another fee when transactions post. This can result in two fees being charged on one transaction. I am not against penalties for going over ones bank limit. It is the amount of the penalty. It is not whining to point out that there are safer checking account options with other banks. People should check out ING's Electric Orange account (no penalties). This is a great option for people with good credit (which I have). People make mistakes and I made one. Bankworker seems to be saying that if you ever go "into negative anything" with your checking account you deserve everything you get in the form of "very expensive" penalties. Lets apply that logic to something more serious than going over ones checking limit. How about if one is going over the speed limit. Speeding is a offense that deserves a penalty. If the penalty for speeding in my State is death would this be what I deserve? Should I accept my death sentence without whining? I would not live in a State if my life would be taken for going 5 miles over the speed limit. I would move. Should you bank at a establishment that takes a weeks paycheck for going 5 dollars over the available balance? No! You should move. I moved. Recently TDbanknorth began calculating fees in a similar fashion. I dropped them as well. I did not do this so that I would have the freedom to be irresponsible with balancing my accounts but to reduce my risk in the chance that I make a mistake. Banks will take as much as customers will allow them to take from them in the form of fees for two reasons. One, they don't care about the customer (business ethics) and two because they must make money on fees to compete with the bank down the street that is doing it. Banks are growing with the capital they make on the fees. This system is bad for everybody in the long term. Small traditional banks that serve the customer better get eaten up- reducing competition. This reduces the banking communities incentive for providing customer service. It's a downward spiral. Banks should make money by investing it not robbing it from customers. P.S. Citizens returned all the fees but one to my account. Funny I didn't feel grateful and closed the account anyway. I don't have time for playing games with my bank.
Bankworker
PITTSBURGH,Pennsylvania,
U.S.A.
This is the customer's fault
#3Consumer Comment
Mon, February 11, 2008
Banks are more likely to start using this method to assess fees to customers because why?? Customers have complained about the posting procedures/ order of transactions. Whiny customers feel that it's not fair that transactions are held against their available balance, and when merchants provide verification of the charges and a check comes through at the same time, then everything gets posted from largest to smallest and all accrue fees. To pacify the customer, banks started posting transactions immediately therefore eliminating the "hold" procedure which works more towards the banks advantage than the customers that were complaining about it. Now, you can't overdraw your account and make up for it, even on non-business days. All I can say is, don't overdraw by any means, it will be very expensive. Ultimately, it's still not a ripoff though because the point is, the account should never go into a negative anything...
Chloe
Northglenn,Colorado,
U.S.A.
Yes you did.
#4Consumer Comment
Mon, February 11, 2008
"I checked my balance on the 1/30/2008 and it showed a sufficient available balance for the $40.68 I charged at that time." According to this statement, you charged the $40.68 on 1/30, when you clearly stated your balance was $76.87. Your available balance would be $36.19 the second you swiped your debit card, which would not leave enough available to pay all your purchases: 1/30/2008 Balance $76.87 ($36.19 available) 1/31/2008 Debit $20.00 ($16.19 available ) 1/31/2008 Debit $16.38 (-$.19 available - 1st OD charge) 1/31/2008 Debit $14.00 (-$14.19 available - 2nd OD charge) 1/31/2008 Debit $11.43 (-$25.62 available - 3rd OD charge) *** 2/01/2008 Insufficient Funds Fee $117.00 (-$142.62 available) 2/01/2008 Debit $40.68 (-$183.30 available) *** 2/02/2008 Insufficient Funds Fee $39 (-$222.30 available) Correct? You also stated that: "This leaves a balance of $15.05 showing as available on 1/31/08" The $15.05 would be your ledger balance, because your available balance would have deducted the $40.68 right away.
Ryan
Jaffrey,New Hampshire,
U.S.A.
Sorry I left out small detail.
#5Author of original report
Sat, February 09, 2008
I did not go over my available balance as it was reported to me by the bank. That is not what happened.
Chloe
Northglenn,Colorado,
U.S.A.
This is normal
#6Consumer Comment
Thu, February 07, 2008
I used to work at another larger bank, and we did the same thing. Even though the $40.68 debit didn't post until 02.01, we would consider it as held against your available balance the minute you made that transaction; therefore, your balance was REALLY $36.19 when your debits on 01.31 cleared. Since the $20 was paid first, as it was the largest transaction, you were left with $16.19 available when the rest of your debits tried to post; thus, getting an overdraft fee for the $16.38, $14 and the $11.43. The bank I worked for started doing this about two years ago, so I'm surprised most of the competing banks haven't started using the unavailable funds held practice sooner.
