Bank Fees

[eagerSnake]

There is an account with $200.00 and the account opt-in to overdraft coverage.

The account takes transactions of $60.00, 50.00, 35.00, 30.00, 20.00, and 5.00. It has the available funds to cover these transactions at the time of authorization. Consider these six transactions pending. Therefore the available balance is $0.00, and the posted balance is still $200.00.

The account makes another transaction of $1.00. This $1.00 transaction overdrafts the account by $1.00. This transaction is also pending. The available balance is now $-1.00, yet the posted balance still $200.00.

The $60.00, 50.00, 35.00, 30.00, 20.00, and 5.00 transactions post. This occurrence puts the posted balance at $0.00, with an available balance of $-1.00. Since the available balance is negative at the time the transactions post, the account will be charged fees for all of these transactions. These fees will equal $216.00. This occurrence will put the account at -$217.00.

The $1.00 transaction posts. The bank will also assess another $36.00 fee for this transaction. This occurrence will put the account at -$253.00.

Total fees: $252.00 for a $1.00 overdraw.

This case is not even a worst case.

Is this right?

Is this ethical?

What would be a better policy?

Banks are also unable to refund more than one fee due to federal regulations unless due to documented merchant error.

[eagerSnake]

One can only imagine how many people have been put into poverty by these fees.

[T-Bone]

Yeah, that's kind of the point.

[inte]

how about dont overdraft. thats kinda the stupidest concept ever

[eagerSnake]

You're so smart bro.

It's not like it's usually an honest mistake.

Pedit: it's almost as if honest people make honest mistakes sometimes. (And crooked people want to abuse that honest mistake)

[inte]

theres a reason why banks have the option to not overdraft. if you can't trust yourself to not incur the fees then don't use it?

[inte]

also, if you just talk to the bank and aren't constantly getting overdrafted, i'm sure that they will waive the fees. i did this with chase once when i first started working. saved $35

[eagerSnake]

I'd say most people don't realize how it works. They assume they will only be charged once for the one transaction that they overdrew; this is not the case.

Think about the 18-year-olds out there, who are already a minute off the streets. I'm sure they are the ones affected the most by this.

There's nothing anyone can do to help them; they simply have to learn the lesson the hard way, and then opt-out after the fact.

This is wicked IMO.

pedit: Read the thing about federal regulations at the end of the OP.

[Not_Mafia]

Has this happened to you eagerSnake?

[eagerSnake]

Has this happened to you eagerSnake?

It has happened to me in the past, yes. Luckily $250 ain't shit to me, but to many people that is a lot of food that is not going to their families stomach.

Pedit: Recently I was charged $500 in transfer fees because I didn't read the disclosure documents that I would be charged $15 for every transfer made more than six per statement period. Luckily that ain't shit to me either, but to many people that would be their entire paycheck unexpectedly taken from them.

[Not_Mafia]

can you get an overdraft facility? They're a lifesaver

[eagerSnake]

can you get an overdraft facility? They're a lifesaver

I'm sure they probably could but that is beside the point here.

What would be a more fair policy as far as overdraft fees for both the consumer and the bank?

I think they should not be able to charge a fee on a transaction if you had the balance available to cover the transaction at the time of authorization. In this scenario, only the 1.00 charge would've been assessed a fee of $36.00.

Pedit: The only saving grace is the fact that they are not allowed to charge more than six fees per day. If more than six "over drafted" transactions post on a given day (quotations because I don't believe it's overdraft if you had the balance at the time of authorization), you will still only be charged six fees. Hence why my example stops at six transactions.

[Not_Mafia]

Eat the rich

[inte]

fair is only what you agree to. thats like getting high and then getting mad at the drug dealer when you're coming down

[eagerSnake]

I don't think it's ethical, and should be illegal. Banks should not be allowed to assess overdraft fees to charges if the account had the balance available when the charge was authorized. It's that simple.

[inte]

i don't think its ethical for consumers to be entitled to extra monies than what they own

[eagerSnake]

Then don't offer overdraft.

The fact of the matter is that they had the money for those 6 transactions. The only one they didn't have it for was the 1.00 transaction. How do you justify charging them fees on all 7 transactions?

[Not_Mafia]

In my country you're charged daily if you're overdrawn, not for transactions

[inte]

Then don't offer overdraft.

The fact of the matter is that they had the money for those 6 transactions. The only one they didn't have it for was the 1.00 transaction. How do you justify charging them fees on all 7 transactions?

because thats the way the cookie crumbles

use a different, fairer bank if you feel you've been slighted

is it the service provider's problem that you use something you don't understand?

[Katsuki]

fair is only what you agree to. thats like getting high and then getting mad at the drug dealer when you're coming down

Pretty much.

@#4: Mistakes can have consequences.

[eagerSnake]

Ruthless

[Not_Mafia]

Have you learnt to be more responsible with your finances eagerSnake?

[eagerSnake]

I learned the banks and government are not on your side.

As if I wasn't cynical enough, I thought I could trust my bank to not F me in the A. Bahahaha

[Not_Mafia]

That didn't answer my question

[eagerSnake]

Yes I learned to keep track of my accounts better and to read disclosure documents and fine print so I don't get F'ed in the A.

I advise this to everyone of all ages. It may be tedious but read the documents, never opt in, and never trust anyone.