Your Finish Rich Plan – A Personal Finance Blog

Wow,

I’ve never heard of a bank pulling this one.. This can’t be legal can it? Unreal. I’ll keep this in mind…

barry

Hello, I was just now looking for the very thing that Scott wrote about. I live in southern Washington. Wells Fargo did nearly the exact thing to me. The only difference being, I put the incorrect date on a house payment check. Apparently, my checking account was a few dollars short on the date I wrote on the check and they charged me 30 dollars. Not sure why 30 instead of 35, but that’s neither here nor there. This cannot be a legal action can it? I did call W.F to complain, the exact words after it had been explained to me were. “We did nothing wrong, but we value you as a customer, so I am removing the 30 dollar fee.” Which was nice, but, I feel it would have been even nicer if they had not done this to start with. I think that many of these banks know what they are doing is borderline illegal, so if you call and make a fuss, many of them will backtrack quickly. I know that does not make it alright but could be useful information in a pinch.

That’s insane. I’ve never heard of anything like that.

Wow that is a creative and borderline illegal trick! I must speak to my bankers to see if this happens in my bank too. It is outrageous! The fee may be only 30-35 bucks but that is not the point, the point is that they are resorting to such cheap measures because the cumulative profit will be a huge number! If they trick 1000 people like this in a year, they will still have 30,000$ in their pockets just like that.

Benjamin,

We really have to be careful who we bank with, so that we don’t end up handing them all our money in overdraft fees!

Hi folks. I ended up here looking for something other than what happened to Scott and Lenn. But it got me thinking of something that happened to me a few month back. I was certain that I had enough money in my account to cover a check I wrote. I ended up with an overdraft fee. The thing is, I must be honest, I get many over draft fees. I do not make much money and that I do make, I am not good at handling. So another overdraft fee was no shock to me. This one particular fee I received seemed incorrect at the time. But I moved on.

After reading what happened to Scott, I thought that might be what happened to me. Sure enough, that is exactly what they did. I went through my returned checks and a banking statement. They charge me because I did not have funds in my account on the date the check was written for, not when it was deposited.

I brought this up and was told that I was incorrect. It was explained to me much the same way a carnival worker explains how a game works. I got lost. She did remove the overdraft fee though. Along the same line of we’re not wrong, but I’ll fix it for you.
I am currently shopping for another bank. I specifically asked a question because of Scott’s post. If I have money in my account when a check I wrote gets here, will it make a difference what date is written on the check?
He paused and said, as long as there is money in your account when you wrote the check, everything will be just fine.
I said, no, not what I am asking. If a check I write on the 20th does not go into the bank until the 23rd, does it matter that I wrote a check on the 20th with no money in my account, even though there was money in my account on the 23rd when the check actually was deposited.
He paused again and said, Are you asking if it’s okay to write a check knowing there is no money in your account? The answer is no, that is not okay.
I don’t know if he ever understood what I was asking or if he was being obtuse on purpose. No matter, I did not bank there. I think there seems to be a trend forming here and not for the better.
I notice that Lenn said he was from WA. I too am from WA state. Not sure if that has any bearing on this at all.

Hey Wilfrid,

I’m back again. I discussed this article with the mrs. and she says it’s all b.s… now my wife is usually correct and of course she gets me to thinking. But I’m of the mind that I would have to actually see this with my own two eyes to buy it. I’m not calling anyone a liar but I just know how easy it is to get a small piece of wrong information and drive off a cliff with it. Have a good one.

bb

Well I sure did get a surprise from Bank of America, whom I have been banking with for years. I get a balance report sent to me at least once every morning and I keep a check on my account all day long as I work at a computer all day. A couple of weeks ago I knew my account was very close due to some unexpected expenses. So I watched with extra care every day. Sure enough, along came an online purchase from a week earlier posting to my account and I saw that my account was going to boing. So I actually drove down to my Bank of America branch and deposited enough money to keep things in the black. I did this several days in a row. Vigilant as a hawk. I have been with this company for decades, been there before and handled it this was no sweat. SUPRISE!! later in the week I see five 35.00 overdraft fees. I actually see them while still pending and call my online banking agent and tell them I think I am a victim of fraud. The fellow says these 35.00 fee’s are pending so he has no idea what they are, and that I should wait until the next day. (right, he has no clue, ah huh.) Well I sure did not anyway. So the next morning I am right into my account online. Holy cow they are overdraft fee’s. And there are three more of these pending 35.00 charges showing. Wow I’m fired up. I call in and ask what in the world happened. I told them how I had paid attention every day, they were able to see that I had made deposits three times during the week. Yep they said, but told me that they had changed their policy mid stream and that from now on they would look backwards at the day you ordered online or swiped a card and if at the end of the day you were technically over what you had in there, even though they e-mail you a positive balance and show a positive balance for that day and you actually have a positive balance because the vendor did not present the charge to your account for several days or a week. Well they are going to look backward and act as if your acount was charged back then. And you guessed it!! Use it as an excuse to extort your money. Well all my years may mean nothing to them, as i may be a small fish in the sea. But i do not see myself as a stupid fish. I am not hanging around to get mugged again. That is deceptive thievery and I will not stay within their crooked grasp. I hear good things about a Credit Union in the area. And I have Chase Bank whom I also have other personal accounts, including my Business account with. I am going to switch my Mortgage over to them as well when I leave the bank. I had a small line of credit with Bank of America. I paid that of the very next week. What really chaps my hide is I am not rich, but I had more than enough money to cover the shortages, I was paying attention, and I used the only data I could use to gauge my balance. The e-mails and the online account balance as they presented it to me each day. Had they told me I needed more it would have been there. So one more little fish leaves them and goes on an internet crusade to inform the world of their low tactics. Everyone i work with at a college her in Arizona has been told. Many are aghast at the deal, and I am proud to say some of them are pulling out with me. I will cut and paste this very letter into a word document, so I may spread the truth of this borderline, possibly illegal practice far and wide easily. I would hope others who are slow typist will do the same. It really makes letting folks know a breeze if you can just copy and past it right back into other forums and e-mails to friends, relatives and co-workers. You will notice that even though I already have some established accounts at Chase I do not at this time plan to have my automatic deposits made there. As after this I am a little leary of all banks. I don’t wish to bad mouth Chase at this time because I have not been using my checking account there for any active online banking. I would really like to know if anyone knows if Chase is sleazy as well. Not secondhand innuendo but actual personal experience. For now just to be safe our group at work is researching the different Credit Unions in town. We are the computer team at the college and we are always researching other products and services for the college. So we are all thinking, what the heck, now that we know what to look for, it should be a snap for our team. Maybe we will get lucky and BofA will be the next bank to fall. You cant keep sticking it to good customers forever and expect to succeed in any business.

This reminds me when I had Washington Mutual, I swear it was like being at a casino when I deposited my check then checked the balance later on. Even though I kept at trying to keep track of every purchase and withdrawal, my balance was never the amount I worked out on my own, the little fees kept showing up even though I would call and they would eventually after some harrowing debates take off my account. It really is scary the way these banks work now, if I had paid less attention, as most people with limited funds are likely to do since they dont have so much time and are busy with work, then WaMu would have stolen quite a bit of money from me after a an extended period with their little fees here and there but since I did pay attention and called them on it I was able to get most but not all the money returned to me. I switched to Commerce Bank and I have to say they were great, my balance was always the amount I had figured and never off by so much as a cent BUT this was five years ago as I moved out of the country for a few years and when I returned I just have been leery about banks so luckily with my current employer we are allowed to cash our checks with his bank for free so I have no use for an account currently, I just pay my bills online through a credit card then give money to a good friend who writes out a check to pay that off cleanly every month, but I know I wont be able to do this forever so I am going to try going back to Commerce Bank and hopefully they have not changed the way they do business and is still reasonably honest as I am sure all banks try to get away with as much possible but some just take it a bit too far! I remember Commerce was pretty convenient with the late hours they are opened and your ATM card is not mailed but given to you instantly right at the opening of your account and if you lose it they also give you another one right there at the bank instead of waiting for it to be mailed to you. I cant say they still do this but I will find out when I go and open an account with them.

If you’re written checks and they’ve bounced because of non-sufficient funds, you might have been reported to ChexSystems. Once that happens, other banks will have access to your past banking history. I didn’t do a lot of research on the ChexSystems thing so I can’t give you a definitive response. I will most likely write a post about it soon though…

Oh, my bad, I didn’t read the original post before replying to this one. At any rate, good luck to those of you that have constant overdraft concerns.

I just dealt with the same scenario for Wells Fargo in WA state. According to Wells Fargo, this is a WA State mandated way of posting transactions. I’m going to find out if that’s true.

I had nearly the very same thing happen that Larry (referenced above) did. I purposely was keeping no extra money in the account for fear that BOA is going under. They overdrafted my account for three $35 fees one day, when for a matter of merely 2 hours (or less), I found out that some debits finally posted and there was not enough money in my account to cover them. I promptly made an online transfer to cover the payments, and I also rushed to the bank and made a physical deposit in order that the debits would clear. I did this, because I couldn’t remember which was immediate. I thought this would cover me, and everything was fine. Lo and behold, the next day I had the overdraft fees, so I called CS, told them I have been a customer for 10+ years, but it did not matter. Their answer was that there was a space of time the debits were not covered, and that I should file a claim with Bank of America. I promptly left the bank and never looked back. It was major pain the butt, but well worth it. They are going to fold anyway. Everyone should google “The Money Masters” and become aware that all the money the banks and Fed print is backed by nothing, so it is a measure of debt (not value), and akin to counterfeiting. The only difference is that they made it legal for themselves. Knowledge is power.

This is as much a response to Stacie above as to the article. This idea that if you never write a check for more than you have, you will never get an overdraft is pure BS. The reality is that you have to keep about $500 more than you will ever spend to avoid getting an overdraft charge with most banks. I can give an example that just happened to me yesterday to illustrate. First of all, let me say that this is the first overdraft I have had in 4 years, and it is entirely because Chase recently took my bank over and changed policies without any notice.

I wrote a check for $1,600 on the 5th. There was plenty of money to cover the check when I wrote it. At no point did my account drop below $1,700, at least in any rational sense of accounting, and at no point did the bank website, or phone account system report a balance under $1,700. Every Thursday I have a fairly decent direct deposit to my account. Even though the party who was given the $1,600 check on the 5th deposited it immediately, by the 13th it had still not posted to the account. On the 14th (a Thursday) I had both a direct deposit, and an automatic payment scheduled. At 1:00am the 14th, the online bank balance sheet showed that the $1,600 check had still not posted to the account, but the direct deposit had, and the automatic payment had, and my balance was almost $4,000. I go to bed, and wake up to an email saying I had an overdraft. I go check my account, and there is a couple thousand in the account. I look at the transactions to figure out how I could have a couple thousand in the account, and an overdraft, and what I find has my jaw on the floor. What the bank did, was process the automatic payment ($200) then process the $1,600 check (which overdrafted by 55 cents), then process every other small outstanding payment (generating several more overdrafts, all of which were higher fees that the total amount of the transactions) and only then processed the direct deposit! All of this in the 10 minutes before midnight (according to their system).

Now, at no point did I have more money going out than was in the account, as evidenced by the fact that I had over $1,700 at the end of the business day, and a couple thousand at the start of the next business day even after the overdraft charges. The overdraft fees were generated entirely as an artifact of manipulated processing specifically designed to generate said overdraft fees. I am fairly certain that to construct this scenario, the bank had to sit on that $1,600 check for several days, before they could find the instant where fees could be processed in such a way to create this situation. Of course as far as the bank records show, the $1,600 check, and all the other charges which overdrafted, went through on the 13th (even though they were reflected in neither my online ledger, nor as pending charges online at 1:00 am the 14th) and the automatic payment came out on the 13th as well (even though that is a day before it was scheduled) and the deposit was not until the 14th.

Of course their response is that they are not responsible for the information shown on their website, and that should not be used for financial planning, nor are they libel for automatic payments deducted from the account early or delivered late, and their policy on direct deposits is that they post to the account whenever they are received, without any regard to other transactions.

Now Stacie can smugly suggest that anyone getting overdraft fees must be floating bad checks, but she is ignorant, incorrect and naive to believe this. No matter how careful you are, or how much money you have, these banks will do anything in their power to try and manipulate their books to charge you extra fees. As far as they are concerned, just letting your balance drop too low is a good enough excuse. Even if it never technically goes into the red, they will find a way to push it into the red if you give them half a chance.

Wells Fargo is crooked, plain and simple. Last week, on the same day, I would have incurred NO overdraft fees. Instead I incurred 3 for $35 each.

I was expecting an electronic, weekly deposit that DID post on October 6. Here are the transactions of October 6:

Rent $480 (taken to bank at 11 a.m., verified with my landlord)

7-11 $20 (transaction occurred at 6:30 a.m. same day according to my receipt)

7-11 $18 (transaction occurred at 7:00 p.m. according to receipt)

Electronic deposit $325 occurred 12 a.m. October 6, but posted at 5 p.m. October 6

In that order. There were funds in the account already, enough to cover all expenses above, taking into account my regular electronic deposit. The transactions were manipulated to first post the 11:00 a.m. withdrawal of $480, thereby giving me one overdraft fee, THEN the 6:30 a.m. withdrawal of $20, one more overdraft fee, and then the 7 p.m. withdrawal of $18, one more overdraft fee, and THEN the deposit of $325. Guess what? I had a positive balance the next day.

Guess what? Wells Fargo is getting a visit from me tomorrow morning. I will have THEM look up the time of the deposit of my rent check, and if they refuse, I will call my landlord on my cell and let them talk to the bank manager. They also get to see my receipts, and then offer me an explanation.