How do I get my bank to refund my overdrafts?

October 21, 2009 5:32 PM

How do I get my bank to refund my overdrafts?

I had a family emergency I had to attend to that required me to leave home and fly to another state. I spent my whole time at a hospital and bought nothing else but food. About a week later, a day before I left, I got the chance to sit down and check my online banking. I discovered four $35 overdraft fees ($140 total). The weird thing was that while I was actively using my card everyday for that last week, none of the charges appeared until five days later. This was a little unusual considering that in the past charges usually went through within a couple of days. I immediately transferred money into my account. Since it was midnight there was nothing else for me to do but wait until tomorrow to call them.

The next day I called my bank and explained the situation - that I was in the middle of a family emergency. At first he said there wasn't anything he could do to help me but eventually he offered to refund two of the four overdraft fees. Even so, I continued to ask him to refund all of the overdrafts, but without any luck.

A day later, when I arrived back home, I noticed two additional overdraft fees practically canceling the refund that I had received earlier. I guess that was just a shrewd way of getting me off the phone.

It's been a week now. I've been busy resituating myself but I'm still looking to get refunded for all of my overdrafts. Is this possible? I thought I had a pretty good explanation but it still didn't seem to get through to them.

Thanks for your help.

posted by AngryTypingGuy to work & money (15 comments total)

EDIT: Oh and the unfortunate thing is that this is not the first time I've had overdrafts, however the last time I had any was about two years ago. I'm not sure enough time has passed for me to be considered a good customer.

I thought about explaining to them that I was a graduating college student and that I would soon seek a job, therefore increasing the value of my account.
posted by AngryTypingGuy at 5:37 PM on October 21

The banking industry in the U.S. will make something like $35 billion dollars from these overdraft fees this year, compared to only $24 billion last year. They also just successfully lobbied against congress changing the law governing them. Basically, they're screwing everyone. I heard Citibank was changing it's policy under government pressure though.

I thought I had a pretty good explanation but it still didn't seem to get through to them.

The purpose of overdraft fees is to make money. They wanted $140 and they took it. If they decide to give you back the money, they won't have it anymore, and no explanation is going to change that. I suppose you could threaten to close all of your accounts and move to another bank.
posted by delmoi at 5:41 PM on October 21

the sad thing is your account, and your potential is of little interest to them....

You might want to consider going to the branch where you opened the account and ask to speak to the manager.... plead your case with him/her. If it is a local bank (which I always recommend) you might do better.. if it is a large (b o a, chase, etc) bank, this approach probably won't be of much use...
posted by HuronBob at 5:45 PM on October 21

Go in person and ask for your money in cash. Close your accounts. I knew someone who did this when she got mad with the banks (easy) and was labeled as a 'hot customer'.
posted by esprit de l'escalier at 5:47 PM on October 21

Definitely do it in person. You might also offer to sign up for overdraft protection - it usually costs roughly as much as one overdraft charge annually, but if you have overdrafts even occassionally it's a good idea. I think if you sign up for that the bank might be more likely to refund your money. But regardless, in person is for sure more likely to work - and remember to be nice!
posted by robinpME at 6:35 PM on October 21

It is not likely that you will get the fees refunded; you are at the mercy of the bank, who is making a significant profit off of these overdrafts. Other than being nicey-nice and hoping for the best, of course, which can sometimes work but typically doesn't.

The best way to protect yourself in the future is move to a credit union that handles overdrafts in a non-profit-driven way (such as mine, that transfers money automatically from your savings account if you overdraft, with no fee, and only charges $5 a day if you overdraft without enough savings to cover.)

Another way to protect yourself is moving to tried-and-true money management solutions. Banks charge these fees because people generally are ignorant of proper money management solutions.
posted by davejay at 6:45 PM on October 21

People telling you to do it in person are right.

The method I used was this:

1. Didn't pay the overdraft fee. Let the balance remain negative until the day after payday.
2. Walked into the bank on my lunch break and demanded to see the bank manager.
3. Put my paycheck on her desk, next to a printed spreadhseet detailing the overdraft fees.
4. Delivered a (well-rehearesed) speech about like the following:

"These charges here? They're all because you waited until I paid a large bill, and then posted the small debit charges afterwards, so I'd rack up a lot of fees. Banks like yours do this all the time and although it's not a crime it's criminal.

"This is imaginary money. You are never getting this. Ever. Just accept that right now.

"Now this is my paycheck. Unless these charges are dropped I am not depositing it here. I'm taking this check down the street and opening an account with the credit union. And I will do that for every check I get, every two weeks, from now on. You will never see this imaginary money, and you will never have use of my real money ever again."

And they dropped them. I think I'm still going to switch to the credit union, though. Just because I'm pissed.
posted by clarknova at 6:52 PM on October 21 [3 favorites]

Going in person is important.

Similar situation for me, went to the local B of A branch, pointed out that they had posted the biggest charges first - had they posted them in the order recieved, I would have had 1 overdraft charge, not 4. I fessed up to being overdrawn and it was my fault, but didn't think 4 fees was fair since it was based on their decision to post the charges in that order. 1, maybe 2 would have been legitimate.

The person (not sure if it was a manager) pulled up our account, said we hadn't had any overdrafts in the past year, and cleared all 4. We also talked about how to avoid it in the future.

Go in, be calm and have a reasonable expectation in your head of what you want them to do.
posted by neilbert at 7:16 PM on October 21

Yeah, and I neglected to say: not only should you do this in person, but argue from a position of strength. Paying off the fees was a mistake, but you can still threaten to use a different bank. They don't care about your problems but they do care about their own, and losing your income (and the greedy hope of future overdraft fees) is a problem for them.

Don't bargin. Deliver an ultimatum and mean it. Really be prepared to switch banks.

If you owe them money again later, don't let any threats to your credit rating cow you. I have a FICO of 807 and I've still never been extended a credit line more than a slim percentage beyond my monthly means. A good credit rating means practically nothing.

One more word of advice: don't ever trust the bank's online reporting of your balance. Especially if you're coming down to the wire. That's when they'll delay processing the transactions, just so they can sting you when you hit Zero. You thought it was weird that none of the charges appeared until five days later? That's why.

My method now is to deposit my first paycheck of the month and then immediately withdraw most of it in cash. I keep a fraction at home, a fraction hidden in my car, and what I think I'll need for the day in my wallet. I make no non-cash purchases. The only things that get checks or charges from my account are the monthly bills (rent, energy, broadband). I now know when I have funds in my account because no petty-cash transactions can creep up on me, only a few large ones that fit inside five rows of a simple spreadsheet.
posted by clarknova at 7:16 PM on October 21

Banks exist to generate profits for their shareholders. Screwing you is their job. Once you're done contesting these charges, find another financial institution. As consumers, we don't have to put up with this crap. I switched from a major bank to a credit union some time ago an couldn't be happier. Their policies are so much more consumer friendly and it's such a relief having my financial institution be an ally instead of an evil, faceless, many-tentacled antagonist.
posted by kprincehouse at 7:24 PM on October 21

Change banks. As soon as I left local banking and got an online account with ING Direct, I've never looked back.

It's been several years and I've had not one single problem with ING Direct, not one. There is no local bank I could say that about.
posted by VC Drake at 7:31 PM on October 21

About the switching banks thing, my bank, Wachovia, won't let you close your account if you're in the negative. I'm not sure about other banks though.

I'm also n-thing the suggestion to go into your bank and talk to somebody in a position of power like a manager.

Awhile ago, I rented a van and put down a deposit on my debit card. The company said that they would put a hold on my account, but not pull the money. At the end, that hold would be withdrawn. Well, they ended up withdrawing the money and refunding it at the end. In the meantime, I overdrafted because of it. It actually looked really silly on my online statement because if you ignored all the overdraft fees, I was in the clear black. But with the fees, I was in the red over $150.

I first tried calling my bank, and they offered me a 65$ credit. I declined and asked about closing my account. They told me I couldn't do that unless it had zero balance. So I went into a local branch and spoke to the manager about it, not mentioning that I knew why the overdraft occured. He ended up seeing why I overdrafted and knocked off all the fees.

I know it's not the exact situation as yours, so YMMV
posted by Geppp at 8:18 PM on October 21

Nthing the suggestion to switch to another bank, even if they DO end up doing the honorable thing. Overdraft policies are getting to be very predatory. My mom's bank (credit union, actually, so they aren't *universally* the better way to go by any means) has recently, within the past few months probably, started holding off processing deposits from the previous night until mid-day... but of course, they'll still process checks coming in. Just this morning she was with $56 of overdraft fees for checks that would have been covered by a deposit she made last night, 5 minutes after the bank closed.
posted by Limiter at 8:58 PM on October 21

I know it's bad form - but I have to pipe in. Yes, banks are predatory and evil in the US, especially wiht this "overdraft" nonsense.

But...

All of this goes away if you just organize your finances a bit better and put in a proper cash cushion of several months income (at least.)


It might sound like a lot, but it's not, over a lifetime.
posted by TravellingDen at 11:14 PM on October 21

Go to the bank and speak with a teller. Explain the situation nicely. Do not under any circumstances complain about how unfair it is that you were charged overdraft fees -- be apologetic and do not make any threats about switching banks or claims that you're such a good customer. I used to be a teller, and if someone came in and did that in a situation like yours, nine times out of ten we would refund their fees (and yes, it really is up to us, so be nice!)
posted by telegraph at 5:24 AM on October 22