More on Bank Fees and Overdraft Charges

On Tuesday night, we aired an investigation into new policies at several big banks that are leading to hefty overdraft charges for consumers who aren’t technically overdrawn.

The American Banker’s Association wanted to pass along some information it’s compiled about how customers can avoid overdraft fees. Because of time constraints, this information didn’t make it into the broadcast version, but I told the ABA I would share it with our viewers and readers.

Also, I have received several emails asking how you can go about getting an overdraft fee refunded. If you feel you’ve been wrongfully hit with fees by your bank, you should file a complaint with the Office of the Comptroller of the Currency. The federal agency’s customer assistance office is actually right in downtown Houston. They prefer phone calls over emails. You can call them at 800.613.6743.

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11 Responses

  1. I bank at Chase Bank, and Chase engages in the same or similar practices. I download my transactions on a daily basis to prevent the whopping $35 overdraft charges from occurring, but at times I feel like the bank is working against me. If I check my balance tonight and see pending transactions, there is no date in regards to when they posted. If I deposit money into my bank account and there are pending transactions, the pending transactions will generally be debited from my account before they credit my deposit. This has often generated an insufficient check charge that has been charged to my account after my deposit is credited. When I have inquired why I was charged an insufficient check charge when there is sufficient funds present, I was told that my deposit came after the pending transactions, and therefore at that time my account was insufficient. When I look at my pending transaction, there is no date on them, therefore it’s difficult to tell how long they have been pending.

    I have a Shell Credit Card, this is through CitiBank. I always pay my entire balance when I pay my bill. I was writing my check this month to pay for my bill due in Aug, and I noticed that my check that I wrote on Jul 2, was not credited to my account until Jul 7, my payment was due on Jul 5, [This was the Saturday over the 4th of July weekend]. I noticed that Shell had charged me with a $2 finance charge + a late fee of $20, thus making my $59 balance go up to $81.00. I noticed that my APR was 36.42% , when I called Shell and asked them why they were charging me a APR of 36.42%, the Rep told me that it was only temporary. He explained to me that Shell is only allowed to charge a minimum of $2 in finance charges. He then explained that when my payment of my previous balance of $34.02 was posted after Jul 5, the finance charge only came to $1.50 on my normal APR of around 23%, so they had to increase my APR to 36.42% in order to charge me the $2 finance charge. As far as I am concerned if my balance is below the finance charge minimum, then they should only charge me the $20 late fee. Because I called and questioned this high APR he credited my account with the finance charge and late fee.

  2. Ms. Davis:

    Great story on how banks are ripping off customers with overdraft fees and manipulating bank balances in order to collect more fees. The exact same thing happened to me several weeks back at Bank of America. My balance never dipped below zero however I was dinged with four overdraft fees. A visit to the local bank and a conference with the bank manager proved a waste of time, but a letter faxed to CEO Kenneth Davis in Charlotte, NC challenging these fees netted different results. Seems that the word challenge may be key.

    Last year my son compiled several overdraft fees with his account at Wells Fargo Bank. Because I was a signer on his account and also joint owner of my mother’s accounts, Wells Fargo deducted money from her saving account to cover his fees. A visit to one of their local branches got all that reversed.

    Amegy Bank failed to post a hefty deposit to my other son’s account, then dinged him with more than $300 in overdraft fees.

    Banks used to be the honorable guardians of our finances. What has happened to their dignity and honor? Replaced by shire greed I suppose. Now we have to be on constant alert to prevent them from being the thieves they used to guard us against. I hope the Federal Reserve will do something to regulate banks and the practices they employ in collecting overdraft fees. If not, we might all be better off by keeping our money in tin cans hiding among the weeds in the back yard.

  3. Local 2 News!

    I closed my account with bank of America for this exact reason. They hit for 4 charges and I was never in the negative. The false charges actually put me in the negative which caused more charges so it was an unending story.

    Pending means: pend ·ing

    –preposition

    1. while awaiting; until: pending his return.

    2. in the period before the decision or conclusion of; during: pending the negotiations.

    –adjective

    3. remaining undecided; awaiting decision or settlement; unfinished: pending business; pending questions; pending litigation.

    4. about to take place; impending.

    This does not mean the transaction has gone through!! This is so unfair. Yes, I keep a very tight eye on my account now but I no longer bank with Bank of America. I was a customer for almost 20 years!

    Thank you for helping to change this.

  4. Ms. Davis,

    Thank you for your report on the new overdraft policy at Bank of America yesterday, 7/29/08. I too have had several of these fees charged to my account. When it was a single charge, I let it go – I wasn’t going to waste time fighting the bank on it. But last week, I was charged 3 in a row when there was over $170 in my account, one for a $5 transaction and another for a $10 transaction.

    Though I understand the concept, it’s certainly not fair in all situations, like the above. However, the third transaction was a withdrawal for $500 – I don’t mind paying the extra $35 for that, EVEN THOUGH I was never actually overdrawn.

    I went to Bank of America this afternoon asking them to reimburse the fees; if not on all three, at least the two for the $5 and $10 transactions. The bank refused. I mentioned your report and that the bank had reimbursed the customers featured in the story, and they still refused. I’m furious.

    I know you’ve probably received hundreds of emails about this story. I wonder if there is anything your team can do to help me and people like me in the same situation. I couldn’t get through to the bank, but you have.

    I’m an attorney who receives a paycheck twice a month. I know I’ve overdrawn my account a few times, but I’ve also had this account since I was in high school. That’s loyalty.

    Please let me know if you can help. Thanks,

  5. This same scenario that was described in your story has just happened to me. I was charged by Bank of America for two overdraft fees even though my account was never over drawn. I was told that the two pending transactions would have made my account overdrawn if they had posted. I made a deposit before the two items had posted and my account was never overdrawn. I asked Bank of America to show me in their records where I was overdrawn. They could not. They could not even show me the two transactions causing the overdrafts. The explanation I was given was “I can’t, the transactions were in pending status”. I also asked the personal banker at Bank of America what would happen if I took my wife out to eat and the restaurant charged my debit card 20% more on my card than showed up on the receipt which is common for many restaurants such as Bee’s Creek Grill in Sienna Plantation. Let’s say I had $58.00 in my checking account. If I had a receipt for $50.00, and the restaurant charged my account for $60.00, the $60.00 would show up as a pending status on my account. The original $50.00 charge would eventually post on my account, but Bank of America would charge me an overdraft fee because this charge originally showed up as a pending status of $60.00 I asked the personal banker at Bank of America about this scenario, she said “Yes, we would charge you because you gave permission for that establishment to charge your account”. There is something very wrong with practice. Bank of America is charging customer on information that is not always right and this practice comes very close to the definition of embezzlement which is against Federal Law.

    Embezzlement
    Noun
    1. The fraudulent appropriation of funds or property entrusted to your care but actually owned by someone else.

    Source: WordNet 1.7.1 Copyright © 2001 by Princeton University. All rights reserved.

  6. Overdraft fees have been assesed to my account even after I signed up for overdraft protection. THey pay the check or charge, pull money from my other accounts, but still charge a fee. If I make a deposit on the same day, then dgo buy groceries, or etc…, they put thru the charges first, then make the deposit (My deposit comes in as a direct deposit at 12:01 am, so what’s the problem. Overdraft fees hinder homebuyers from getting loans.

  7. Thank you for running the bank story. It’s about time that the acts of many local banks gets put out into public view. I am also a customer of Bank of America and have had the same issues, of being charged OD fees when my account NEVER actually was overdrawn. One month I was charged a $35 fee for a pending charge that should not have been on my account and dropped off after the 4 day hold period. After going around with the bank they finally agreed to refund the charge.

    The new “pending” charge policy is a hassle, but might not have been a BIG deal had they informed their customers of the new policy taking effect. It just kind of started happening one day and when I questioned the bank they said it was their new policy and that there was nothing they could do or that would change about it.

    I’ve become very aware of my banking and the amounts in or “Pending” my account so that I can be sure not to be charged any more outrageous fees.

    Thanks again for bringing this to the attention of Houston, I hope that it helps save money.

  8. Thank you for running the bank story. It’s about time that the acts of many local banks gets put out into public view. I am also a customer of Bank of America and have had the same issues, of being charged OD fees when my account NEVER actually was overdrawn. One month I was charged a $35 fee for a pending charge that should not have been on my account and dropped off after the 4 day hold period. After going around with the bank they finally agreed to refund the charge.

    The new “pending” charge policy is a hassle, but might not have been a BIG deal had they informed their customers of the new policy taking effect. It just kind of started happening one day and when I questioned the bank they said it was their new policy and that there was nothing they could do or that would change about it.

    I’ve become very aware of my banking and the amounts in or “Pending” my account so that I can be sure not to be charged any more outrageous fees.

    Thanks again for bringing this to the attention of Houston, I hope that it helps save money.

  9. After listenting to your 10 pm news tonight I want to add this this practice is nothing new. Bank of America has been doing this for quite some time. I actually used to bank there and this happened to me. I immediately took this matter into a nearby Bank of America location and received two explainations. The first was they manulated the “pending”checks in the event that a very important check, like a mortgage check came in and they would not want to return the check insufficient. This was a service to me. The second explaination to their admitted manipulation was that the “pending” was only there in case you changed your mind about a purchase. Which, of course, made absolutely no sense at all. I immediately closed the account and opended a new account at a local chredit union and have been extremely happy ever sense. I would advise everyone to do the same. I haven’t had a problem since.

  10. Wells Fargo has overdrafted our account when it was not in the negative, and when called about it. A representative informed me that they were unsure whether or not I was going to make a deposit that day , which I always have, because IF my pending transactions cleared the bank then my account would be negative. I have had to call them about 10 times regarding this issue and it continues to happen at least once a month.

  11. Bank of America lost my business about 13 years ago when they started charging fees for using one of their deposit slips (those slips sitting at the desk when you walk in) to deposit money into their bank – as opposed to the preprinted deposit slips that come in the back of your check book. They wanted to charge me $1 to put money into their bank??? I actually closed my account that day and haven’t been back since. I’m not surprised to hear that they are still finding ways to “fee” their customers to death.

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