What can I do about these dag-gummed fees?
January 8, 2010 9:28 PM Subscribe
My bank has me over a barrel. I've tried what's been suggested before, now I'm looking for other options.
I receive emails every business day that give me the balance of my bank account. Bank = Woodforest National Bank (the one in Walmart). One Friday in December I received one that informed I was seventy cents overdrawn. I attempted to rectify this by depositing $25 in my bank account. Then, believing I had $24 in my account, I made a purchase with my debit card (I can see some of you cringing already). The very next day I drove to a tiny town in Michigan and spent the holidays there, miles away from anywhere.
I now “owe” the bank about $200 in overdraft fees - they tack on $5 every day until I can pay them off and get a positive balance. I called costumer service and the main branch as soon as I found out what was going wrong and tried to explain the situation when I was Michigan. Both of them said the same thing - there's nothing they can do, they couldn't even stop the continuous overdraft fee even though there was no way I could get to a bank because they didn't have any branches in Michigan. I went to the bank as soon as I returned from my vacation and spoke with the manager, who bent over backwards not to help me. She *did* offer to remove one of the original overdraft fees and “work with me” on the rest, which would have cut my "debt" by about 40%, but didn’t budge from that. The bank won’t let me close the account with a negative balance, so the $5 a day will keep on being added up to 45 days, and then they’ll start to attempt to collect.
I told her point blank that I’m a college student. I don’t have a job; I live off my student loans. I don’t have that kind of money, even with the deal she offered. I had to borrow the $25 to deposit before I left on vacation (the purchase I made later was for the person who lent me the money, who also paid for my vacation). I told her that the bank can keep adding $5 a day to my account, but that will be $5 more that I won’t have. I wasn't unpleasant, just laying out the facts. I didn't take it out on her because that won't help things, but she wasn't very sympathetic.
I think that $35 for a seventy cent mistake is outrageous. I think that allowing a debit transaction to go through when my account was in the negative is unethical, and I don’t think I should pay for it. My credit union won't allow a transaction if it will let me go a penny over. I shouldn’t be punished for being where there were no branches of that bank.
Anyway, other than simply not paying them and waiting for it to go into collections, then to court, do I have any other recourse? I just don’t have the money to give them, and they aren’t budging.
I receive emails every business day that give me the balance of my bank account. Bank = Woodforest National Bank (the one in Walmart). One Friday in December I received one that informed I was seventy cents overdrawn. I attempted to rectify this by depositing $25 in my bank account. Then, believing I had $24 in my account, I made a purchase with my debit card (I can see some of you cringing already). The very next day I drove to a tiny town in Michigan and spent the holidays there, miles away from anywhere.
I now “owe” the bank about $200 in overdraft fees - they tack on $5 every day until I can pay them off and get a positive balance. I called costumer service and the main branch as soon as I found out what was going wrong and tried to explain the situation when I was Michigan. Both of them said the same thing - there's nothing they can do, they couldn't even stop the continuous overdraft fee even though there was no way I could get to a bank because they didn't have any branches in Michigan. I went to the bank as soon as I returned from my vacation and spoke with the manager, who bent over backwards not to help me. She *did* offer to remove one of the original overdraft fees and “work with me” on the rest, which would have cut my "debt" by about 40%, but didn’t budge from that. The bank won’t let me close the account with a negative balance, so the $5 a day will keep on being added up to 45 days, and then they’ll start to attempt to collect.
I told her point blank that I’m a college student. I don’t have a job; I live off my student loans. I don’t have that kind of money, even with the deal she offered. I had to borrow the $25 to deposit before I left on vacation (the purchase I made later was for the person who lent me the money, who also paid for my vacation). I told her that the bank can keep adding $5 a day to my account, but that will be $5 more that I won’t have. I wasn't unpleasant, just laying out the facts. I didn't take it out on her because that won't help things, but she wasn't very sympathetic.
I think that $35 for a seventy cent mistake is outrageous. I think that allowing a debit transaction to go through when my account was in the negative is unethical, and I don’t think I should pay for it. My credit union won't allow a transaction if it will let me go a penny over. I shouldn’t be punished for being where there were no branches of that bank.
Anyway, other than simply not paying them and waiting for it to go into collections, then to court, do I have any other recourse? I just don’t have the money to give them, and they aren’t budging.
It kind of doesn't matter that it's outrageous - those were the terms you agreed to when you signed up.
You really need to get this paid ASAP. Borrow $5 from 40 people, today. Or talk to your creidt union and see if they can help you - they may be able to.
posted by DarlingBri at 3:05 AM on January 9, 2010
You really need to get this paid ASAP. Borrow $5 from 40 people, today. Or talk to your creidt union and see if they can help you - they may be able to.
posted by DarlingBri at 3:05 AM on January 9, 2010
Normally, I would recommend what Consumerist calls an EECB or Executive Email Carpet Bomb. If you don't know what that is, it's where you appeal to upper level management directly using either their personal email address or their personal mailing address. However, the second half of your mistake is yours only* and I wouldn't entertain your inquiry. The only office that might be able to help you is your state's Attorney General. However, I can't guarantee whether your debt would go into collections before the investigation is started. Also, the AG doesn't cow to every complaint he/she receives.
*When you open an account, you receive documentation that outlines several federal regulations and corporate policies. Among the bits in there, you'd find that neither your bank nor your credit union have to process your deposit on the same day you give it to them. They have a few business days to do it; that's the law. Second, it usually states that you will have overdraft protection and that it has a penalty. Your bank's penalty is pretty standard. If your bank allows it, I would formally decline overdraft protection so this doesn't happen again.
But, I don't think you can litigate this away entirely. A big chunk of your situation is that you didn't wait for the money to be deposited before spending again. In that sense, the bank did nothing wrong. It is not their job to watch your balance - regardless of how poor you are. If you filed in court, there is chance they would offer you 40% again so that they wouldn't have to deal with it.
Also, banks and credit unions are not the same thing. Credit unions do not typically offer overdraft protection and banks almost always provide it by default.
posted by fujiko at 3:19 AM on January 9, 2010
*When you open an account, you receive documentation that outlines several federal regulations and corporate policies. Among the bits in there, you'd find that neither your bank nor your credit union have to process your deposit on the same day you give it to them. They have a few business days to do it; that's the law. Second, it usually states that you will have overdraft protection and that it has a penalty. Your bank's penalty is pretty standard. If your bank allows it, I would formally decline overdraft protection so this doesn't happen again.
But, I don't think you can litigate this away entirely. A big chunk of your situation is that you didn't wait for the money to be deposited before spending again. In that sense, the bank did nothing wrong. It is not their job to watch your balance - regardless of how poor you are. If you filed in court, there is chance they would offer you 40% again so that they wouldn't have to deal with it.
Also, banks and credit unions are not the same thing. Credit unions do not typically offer overdraft protection and banks almost always provide it by default.
posted by fujiko at 3:19 AM on January 9, 2010
But, I don't think you can litigate this away entirely. A big chunk of your situation is that you didn't wait for the money to be deposited before spending again. In that sense, the bank did nothing wrong.
Well, whether or not the bank "nothing wrong" is a value judgment. Their behavior was predatory by any standard, an overdraft doesn't cost them $35 in processing fees, it's pure profit and they do it to make money. And they certainly do "watch your balance" They deliberately re-order your purchases in order to charge as many over-draft fees as possible.
posted by delmoi at 3:24 AM on January 9, 2010 [5 favorites]
Well, whether or not the bank "nothing wrong" is a value judgment. Their behavior was predatory by any standard, an overdraft doesn't cost them $35 in processing fees, it's pure profit and they do it to make money. And they certainly do "watch your balance" They deliberately re-order your purchases in order to charge as many over-draft fees as possible.
posted by delmoi at 3:24 AM on January 9, 2010 [5 favorites]
Best answer: Just so you know, I think it would be better for you to pay up. I didn't make that clear the first time. Your banking record is not looking real good right now, and that could affect your ability to open accounts at other banks and credit unions. It is not an uncommon occurrence.
Once again, I don't think anyone can make this go away entirely. Maybe the first overdraft fee - maybe, if someone's feeling sweet - but definitely not the subsequent fees.
posted by fujiko at 3:25 AM on January 9, 2010
Once again, I don't think anyone can make this go away entirely. Maybe the first overdraft fee - maybe, if someone's feeling sweet - but definitely not the subsequent fees.
posted by fujiko at 3:25 AM on January 9, 2010
delmoi: Not every bank does this even though Bank of America is famous for it. I can tell you Fifth Third Bank does not. They post them in the order they're received.
She does not have Bank of America so we cannot assume that their bank's practices are inline.
posted by fujiko at 3:29 AM on January 9, 2010
She does not have Bank of America so we cannot assume that their bank's practices are inline.
posted by fujiko at 3:29 AM on January 9, 2010
I used to work for a bank, and I had to tell people this same unethical bunch of shit ALL THE TIME. Unfortunately, and I do sincerely mean unfortunately, they have you. Absolutely, $200 in fees for a 70-cent mistake is borderline criminal, and so is the fact that they allow debit transactions when the money isn't there. (You signed rather than enter a PIN, right?) Why do you think they do that? they just "made" $200 off you. There's a bit more to it than that, but I shall not bore you with the evil details. (And that's just what they are.) Here's the most practical advice I can give you:
1. It is written, somewhere, that this will happen. You signed some stuff when you opened your account, right? Did you read it? Well, no, of course you didn't. You may have filed it, you probably threw it away. But trust me, somewhere in there you agreed to these conditions. Thus, you are screwed.
2. They aren't punishing you for going out of town. There is no situation you can explain to them, no matter how in the right you are, that negates that "contract" that you signed when you opened your account. The way to approach this situation is NOT by making what the bank will perceive as excuses.
3. Rather than try to explain what happened (which they don't want to hear and also makes you appear on the defensive), you go on the offensive. You tell them that THEY fucked up by allowing a debit transaction that wasn't available, and you tell them that THEY are working for you, not the other way around. DO NOT start explaining yourself! They will tune out. They do not care. They also don't care about your financial situation, whatever it may be, so don't go there either ("I can't pay this," etc....).
That all being said, there really are no easy solutions to this one. It is solvable, but it is going to take you some time and some fancy talking. You also need to realize that this is going to put some serious hurt on your credit if it actually does go to collections. That is another thing you need to address with this bank. Here's what I would suggest (bear in mind that there is not a 100% guarantee that this will work). You go back to that manager and explain to her that you are not in the wrong here and that putting someone through the wringer over 70 cents is bullshit. She will not care. Thus, you ask her to put you in touch with her superior. She will more than likely not want to do so, but you just keep asking and do not deviate. Eventually she will give you the contact info for some regional manager in b-f, you know. You call that person, and do what I said above. No excuses, no stories, just focus on THEIR lack of ethics and crappy business practices. You may mention the fact that ruining someone's credit over 70 cents, when you clearly made an effort to rectify the situation, is fucking criminal. If that doesn't work, repeat until it does....you see what I mean. It will be a lengthy and more than likely unpleasant process, but I would bet that eventually you will get it taken care of.
GOD am I glad I don't work for that God-forsaken bank anymore! I let them fire me for calling off work to go on interviews, collected unemployment from them for 6 months, and used it to go back to school, and now I have a job where I actually help people! I hope so much that you get this solved, because banking is truly one of those industries that everyone has to patronize and so they can do whatever they want. God, that job made me want to kill myself. Good luck!
posted by lucky25 at 3:37 AM on January 9, 2010 [7 favorites]
1. It is written, somewhere, that this will happen. You signed some stuff when you opened your account, right? Did you read it? Well, no, of course you didn't. You may have filed it, you probably threw it away. But trust me, somewhere in there you agreed to these conditions. Thus, you are screwed.
2. They aren't punishing you for going out of town. There is no situation you can explain to them, no matter how in the right you are, that negates that "contract" that you signed when you opened your account. The way to approach this situation is NOT by making what the bank will perceive as excuses.
3. Rather than try to explain what happened (which they don't want to hear and also makes you appear on the defensive), you go on the offensive. You tell them that THEY fucked up by allowing a debit transaction that wasn't available, and you tell them that THEY are working for you, not the other way around. DO NOT start explaining yourself! They will tune out. They do not care. They also don't care about your financial situation, whatever it may be, so don't go there either ("I can't pay this," etc....).
That all being said, there really are no easy solutions to this one. It is solvable, but it is going to take you some time and some fancy talking. You also need to realize that this is going to put some serious hurt on your credit if it actually does go to collections. That is another thing you need to address with this bank. Here's what I would suggest (bear in mind that there is not a 100% guarantee that this will work). You go back to that manager and explain to her that you are not in the wrong here and that putting someone through the wringer over 70 cents is bullshit. She will not care. Thus, you ask her to put you in touch with her superior. She will more than likely not want to do so, but you just keep asking and do not deviate. Eventually she will give you the contact info for some regional manager in b-f, you know. You call that person, and do what I said above. No excuses, no stories, just focus on THEIR lack of ethics and crappy business practices. You may mention the fact that ruining someone's credit over 70 cents, when you clearly made an effort to rectify the situation, is fucking criminal. If that doesn't work, repeat until it does....you see what I mean. It will be a lengthy and more than likely unpleasant process, but I would bet that eventually you will get it taken care of.
GOD am I glad I don't work for that God-forsaken bank anymore! I let them fire me for calling off work to go on interviews, collected unemployment from them for 6 months, and used it to go back to school, and now I have a job where I actually help people! I hope so much that you get this solved, because banking is truly one of those industries that everyone has to patronize and so they can do whatever they want. God, that job made me want to kill myself. Good luck!
posted by lucky25 at 3:37 AM on January 9, 2010 [7 favorites]
You're not alone.
I'm sorry that you had to learn this lesson the hard way, but I'm sure most everyone has overdrafted and been charged for it at some point in their lives. I doubt that anyone can really help you on this but if I can make a few suggestions....
1)Always read the fine print on financial papers. When you opened this account, somewhere on a piece of paper, probably even in large print, it was mentioned to you that you would be charged an overdraft fee and incur fees daily if you overdrafted. This is Banking 101 and probably why your bank is unsympathetic. That and you might be the third person that day with the same problem. Plus they send you a balance pretty much daily so....
2)Suck it up and borrow the money to get yourself at least back to zero. Ask mom and dad. Ask anyone. Going into the hole even further if you can help it is bad. You don't want to go to collection. It starts this whole long painful thing....
Do you wanna hear a story? No? I'll tell you one anyway. I'm not sure how old you are but you're probably pretty young. I was 18 once. Walking across campus one day I encountered this stand where if you signed up for a credit card you got this fancy pen. I really wanted that pen. This moment in my life was pivotal and I was 18 and stupid and didn't know or care what credit was. I got the pen. Lost it within a few days BUT I still had this new credit card! Free money! I was an adult! So, fast forward a few years. I had several credit cards. Was starting to understand that you had to pay these people back but seriously, I could take my time paying them back and...something shiny? Let's charge it! Fast forward again. Now I'm 28. I owe several cards about a year's salary combined. Ouch! Mother Effer! How'd I get here?! Well, along with charging beyond my means I also let a few doctor's bills go to collection. This little discrepancy has hurt my credit more than anything and my interest rates are ridiculous. I'm only now realizing what amazing obstacles I've put in front of myself. Someday I want a house. We'll see how that goes....
Okay, sorry for the self-therapy disguised as advice, and I don't mean to sound all "DOOM DOOM DOOM," but this shit really happens. Don't be me. I just want to illustrate to you the importance these seemingly small financial snafus hold. Don't go to collection. It'll jack up the interest rate on just about anything you owe on or want to have because you're a risk. Like, jack it a lot. You say you live on student loans, right? You don't want to start your young blank financial slate with a collection, no matter how small. You don't realize until later how important that stupid credit score is. Scrape together the money. Educate yourself on finances. I really, really wish I had. Read the fine print. Write things down. Oh and wear sunscreen.
posted by smeater44 at 4:29 AM on January 9, 2010 [5 favorites]
I'm sorry that you had to learn this lesson the hard way, but I'm sure most everyone has overdrafted and been charged for it at some point in their lives. I doubt that anyone can really help you on this but if I can make a few suggestions....
1)Always read the fine print on financial papers. When you opened this account, somewhere on a piece of paper, probably even in large print, it was mentioned to you that you would be charged an overdraft fee and incur fees daily if you overdrafted. This is Banking 101 and probably why your bank is unsympathetic. That and you might be the third person that day with the same problem. Plus they send you a balance pretty much daily so....
2)Suck it up and borrow the money to get yourself at least back to zero. Ask mom and dad. Ask anyone. Going into the hole even further if you can help it is bad. You don't want to go to collection. It starts this whole long painful thing....
Do you wanna hear a story? No? I'll tell you one anyway. I'm not sure how old you are but you're probably pretty young. I was 18 once. Walking across campus one day I encountered this stand where if you signed up for a credit card you got this fancy pen. I really wanted that pen. This moment in my life was pivotal and I was 18 and stupid and didn't know or care what credit was. I got the pen. Lost it within a few days BUT I still had this new credit card! Free money! I was an adult! So, fast forward a few years. I had several credit cards. Was starting to understand that you had to pay these people back but seriously, I could take my time paying them back and...something shiny? Let's charge it! Fast forward again. Now I'm 28. I owe several cards about a year's salary combined. Ouch! Mother Effer! How'd I get here?! Well, along with charging beyond my means I also let a few doctor's bills go to collection. This little discrepancy has hurt my credit more than anything and my interest rates are ridiculous. I'm only now realizing what amazing obstacles I've put in front of myself. Someday I want a house. We'll see how that goes....
Okay, sorry for the self-therapy disguised as advice, and I don't mean to sound all "DOOM DOOM DOOM," but this shit really happens. Don't be me. I just want to illustrate to you the importance these seemingly small financial snafus hold. Don't go to collection. It'll jack up the interest rate on just about anything you owe on or want to have because you're a risk. Like, jack it a lot. You say you live on student loans, right? You don't want to start your young blank financial slate with a collection, no matter how small. You don't realize until later how important that stupid credit score is. Scrape together the money. Educate yourself on finances. I really, really wish I had. Read the fine print. Write things down. Oh and wear sunscreen.
posted by smeater44 at 4:29 AM on January 9, 2010 [5 favorites]
Best answer: Talk them down as much as you can. Find a way to pay it. Close your account. Join a credit union. Never let your account balance go negative.
This will be a $150 lesson in the truculence of banks. They don't have customers, they have prey.
It shouldn't be this way, but with all too few exceptions, it is.
I had to learn this lesson, too. Luckily, it only cost me a little more than it's costing you. There are a lot of people out there with tens of thousands of dollars in credit card debt at 29% a year. It ruins lives. Banking used to be about keeping the productive economy humming along by providing judicious access to capital; now it's something else, something predatory and evil.
Never let yourself be at the mercy of these motherfuckers again.
posted by kprincehouse at 4:35 AM on January 9, 2010 [1 favorite]
This will be a $150 lesson in the truculence of banks. They don't have customers, they have prey.
It shouldn't be this way, but with all too few exceptions, it is.
I had to learn this lesson, too. Luckily, it only cost me a little more than it's costing you. There are a lot of people out there with tens of thousands of dollars in credit card debt at 29% a year. It ruins lives. Banking used to be about keeping the productive economy humming along by providing judicious access to capital; now it's something else, something predatory and evil.
Never let yourself be at the mercy of these motherfuckers again.
posted by kprincehouse at 4:35 AM on January 9, 2010 [1 favorite]
It might not cost them $35 and $5 a day when you go negative, but it isn't as insignificant as people make it out to be. You just turned a debit account into a credit account. They can't let that slide. Partially for regulatory reasons.
And the reason they "let" you run debit transactions when there isn't money in the account to cover it is because the credit/debit system isn't tied into their computers. When you get approved for a credit/debit transaction, all that happens is that the retailer's bank checks their records to make sure your account is a valid number and that it hasn't been canceled/suspended/etc.
For the most part, banking is still done the old way. During the day, all the retailers and other banks collect transactions, and overnight, everything gets collated and accounted for.
posted by gjc at 7:32 AM on January 9, 2010
And the reason they "let" you run debit transactions when there isn't money in the account to cover it is because the credit/debit system isn't tied into their computers. When you get approved for a credit/debit transaction, all that happens is that the retailer's bank checks their records to make sure your account is a valid number and that it hasn't been canceled/suspended/etc.
For the most part, banking is still done the old way. During the day, all the retailers and other banks collect transactions, and overnight, everything gets collated and accounted for.
posted by gjc at 7:32 AM on January 9, 2010
She *did* offer to remove one of the original overdraft fees and “work with me” on the rest, which would have cut my "debt" by about 40%
She didn't even need to do that. Go back, speak to her again, and take her up on her offer. Find the other 60% of the money however you can before even one more $5 charge gets tacked on.
posted by whitelily at 7:42 AM on January 9, 2010 [1 favorite]
She didn't even need to do that. Go back, speak to her again, and take her up on her offer. Find the other 60% of the money however you can before even one more $5 charge gets tacked on.
posted by whitelily at 7:42 AM on January 9, 2010 [1 favorite]
Best answer: I can't see you getting a much better deal than you have already been offered. You need to get your hands on the money required to zero out your account and work from there. But you're basically in the wrong here unless there is some as-yet undetected bank error, and there is very little incentive for them to go beyond the substantial reduction they've offered. You are not that important of a client to this bank. Get in the black and then see if the threat of closing your account can get any more of those fees reversed, but I wouldn't hold out much hope. You have to understand that that manager's job is likely in part dependent on her collecting a specific percentage of the fees that are assessed.
This wasn't a 70 cent mistake. When you found out you had lost awareness of the true state of your finances (which is what any unexpected overdraft notice that is not the result of a bank error) you had an obligation to yourself to figure out exactly what had happened, how much money you actually had, and to make sure that you had enough money in the bank to cover any outstanding charges. You did the worst possible thing which was to assume absolutely the best case scenario (that -$.70 was the true state of your account) and act accordingly - at a time when you knew you were about to leave your account unattended and basically beyond your power to monitor or control. The reason you're getting a bunch of crap for this from all us grizzled veterans is that we have learned by painful experience that this state of affairs is the norm, not the exception.
Your bank's policies are draconian and you should by all means shop around for a new bank. But the small print is always designed to screw you to their benefit which is why they make it so small. You have to read it. You have to understand what exactly they can do to you. Most of all you have to learn right now, today, that you can't ever trust the balance on your account that a ATM or phone bank or online statement or bank statement gives you. Because the bank can't know what checks or charges are out there that hasn't posted yet. Only you can ensure that you know the true state of your finances. If you don't take responsibility for that fact this will happen to you over and over again.
posted by nanojath at 9:06 AM on January 9, 2010
This wasn't a 70 cent mistake. When you found out you had lost awareness of the true state of your finances (which is what any unexpected overdraft notice that is not the result of a bank error) you had an obligation to yourself to figure out exactly what had happened, how much money you actually had, and to make sure that you had enough money in the bank to cover any outstanding charges. You did the worst possible thing which was to assume absolutely the best case scenario (that -$.70 was the true state of your account) and act accordingly - at a time when you knew you were about to leave your account unattended and basically beyond your power to monitor or control. The reason you're getting a bunch of crap for this from all us grizzled veterans is that we have learned by painful experience that this state of affairs is the norm, not the exception.
Your bank's policies are draconian and you should by all means shop around for a new bank. But the small print is always designed to screw you to their benefit which is why they make it so small. You have to read it. You have to understand what exactly they can do to you. Most of all you have to learn right now, today, that you can't ever trust the balance on your account that a ATM or phone bank or online statement or bank statement gives you. Because the bank can't know what checks or charges are out there that hasn't posted yet. Only you can ensure that you know the true state of your finances. If you don't take responsibility for that fact this will happen to you over and over again.
posted by nanojath at 9:06 AM on January 9, 2010
simply not paying them and waiting for it to go into collections, then to court
I sure hope you don't do this. Your bank's policies may indeed be outrageous and unethical but those things are not the same as being illegal. The courts are not going to help you here, you don't have a legal leg to stand on. Your sense of entitlement is frankly going to land you with ruined credit and a court order to pay a whole lot more than you owe right now.
posted by nanojath at 9:11 AM on January 9, 2010 [1 favorite]
I sure hope you don't do this. Your bank's policies may indeed be outrageous and unethical but those things are not the same as being illegal. The courts are not going to help you here, you don't have a legal leg to stand on. Your sense of entitlement is frankly going to land you with ruined credit and a court order to pay a whole lot more than you owe right now.
posted by nanojath at 9:11 AM on January 9, 2010 [1 favorite]
I was going to sign up just to comment on this question, only to discover I'd had an account for a while now... go figure. Anyway, I just wanted to relate a story:
In the past couple of months, my significant other and I moved across the country, and for a variety of reasons (new jobs, lack of direct deposit, utilities not being shut off properly, etc.), both of us ended up overdrawing our accounts. Both of us were assessed "service fees" for having a negative balance for more than a week (or so).
I've worked in banking, and realized it's tough to get any sort of fees waived at the branch level, so I wrote a letter to the branch manager and copied the CEO of the bank and the Secretary of the State Department of Banking. A bit of overkill, but I figured I didn't have much to lose. In the letter, I explained my situation and included a check from my new bank account to bring the balance to $0. I asked that they'd waive the overdraft and service fees and if not, to close the account. The Dept. of Banking then wrote a follow-up letter to the bank asking for a written reply to my complaint within 30 days. Within about a week, the overdraft fees and service charges for the negative balance we returned to my account.
My SO and I did the same thing for her overdrawn account and received the same outcome. The only difference was that her bank was overseen at the national level by the Office of the Comptroller of the Currency, rather than the State Department of Banking.
I'm not sure this would work in every case, but it's worth the time it takes to write up a quick letter. Bank fees are bullshit.
posted by banwa at 9:13 AM on January 9, 2010 [2 favorites]
In the past couple of months, my significant other and I moved across the country, and for a variety of reasons (new jobs, lack of direct deposit, utilities not being shut off properly, etc.), both of us ended up overdrawing our accounts. Both of us were assessed "service fees" for having a negative balance for more than a week (or so).
I've worked in banking, and realized it's tough to get any sort of fees waived at the branch level, so I wrote a letter to the branch manager and copied the CEO of the bank and the Secretary of the State Department of Banking. A bit of overkill, but I figured I didn't have much to lose. In the letter, I explained my situation and included a check from my new bank account to bring the balance to $0. I asked that they'd waive the overdraft and service fees and if not, to close the account. The Dept. of Banking then wrote a follow-up letter to the bank asking for a written reply to my complaint within 30 days. Within about a week, the overdraft fees and service charges for the negative balance we returned to my account.
My SO and I did the same thing for her overdrawn account and received the same outcome. The only difference was that her bank was overseen at the national level by the Office of the Comptroller of the Currency, rather than the State Department of Banking.
I'm not sure this would work in every case, but it's worth the time it takes to write up a quick letter. Bank fees are bullshit.
posted by banwa at 9:13 AM on January 9, 2010 [2 favorites]
There is another side to this, which is about responsibility, and not just about banks being evil motherf**kers, which they are. As everyone has told you, you agreed to this, and you're pretty much screwed; the 40 percent was their offer, and you should take it and stop accruing charges immediately by paying off the charges, even if that means borrowing from your folks or friends.
But you're a grown up. And I know times are tough, but you took a vacation when you had less than 20 dollars to your name? That's the underlying narrative above. College student or not, that's living dangerously close to the bone. How did you afford the vacation? Or was it with your family?
You *need* to put some level of cash in reserve at any stage of life to be able to deal with an imminent emergency -- needing a cab to the emergency room at 2AM, for example. If you consider the couple of hundred bucks this will cost you a lesson in not getting *close* to overdrawing your account again, or being so busted that you need to move $25 into an account to cover an overdraft and then immediately spend most of that deposit -- where you're thinking in terms of 70 cent margins -- you got off cheap.
posted by fourcheesemac at 9:37 AM on January 9, 2010
But you're a grown up. And I know times are tough, but you took a vacation when you had less than 20 dollars to your name? That's the underlying narrative above. College student or not, that's living dangerously close to the bone. How did you afford the vacation? Or was it with your family?
You *need* to put some level of cash in reserve at any stage of life to be able to deal with an imminent emergency -- needing a cab to the emergency room at 2AM, for example. If you consider the couple of hundred bucks this will cost you a lesson in not getting *close* to overdrawing your account again, or being so busted that you need to move $25 into an account to cover an overdraft and then immediately spend most of that deposit -- where you're thinking in terms of 70 cent margins -- you got off cheap.
posted by fourcheesemac at 9:37 AM on January 9, 2010
You might consider sending your story to The Consumerist. It's similar to other stories I've seen there in the past. Sometimes people get solutions from companies hoping to salvage some publicity.
posted by demiurge at 12:45 PM on January 8, 2010 [1 favorite]
posted by demiurge at 12:45 PM on January 8, 2010 [1 favorite]
Not trying to be snarky, but I don't think you have much of a choice here. The bank is doing nothing wrong. I'm assuming that you signed a contract when you opened your account with the bank, and I'm sure it discussed their overdraft policies. By signing that, you're agreeing to pay whatever fees they hit you with. It's not their fault you didn't keep track of how much money you had in your account. I understand, being a college student myself and living off of loans, how difficult it can be to pay the money- but you can't use "I'm a poor student" when it was your fault to begin with.
Treat this as a learning opportunity. Find some way to pay the money that you owe the bank. Then, get a checkbook register or something similar, and use it to keep yourself out of this situation again.
posted by kro at 12:50 PM on January 8, 2010
Treat this as a learning opportunity. Find some way to pay the money that you owe the bank. Then, get a checkbook register or something similar, and use it to keep yourself out of this situation again.
posted by kro at 12:50 PM on January 8, 2010
The Consumerist sometimes comes through for these situations, but in your specific case, I'm having a hard time seeing how you can play the sympathy card. I don't think anyone will disagree with you when you say that "$35 for a seventy cent mistake is outrageous." However, the fees you incurred were written into the terms of service of your account and as such, the bank has every right to charge them. If you read the fine print, you'll likely find that there's unfortunately no exemptions to the rules for broke students or persons temporarily unable to access a bank branch. Basically, you made a mistake and now it seems like you'd like a magical way to avoid the consequences.
You do have some recourse here. The bank manager offered to remove the original overdraft fees and "work with you" on the rest. It sounds like a good an option as any, considering the alternative.
Also, why did they continue to charge $5/day fee after you deposited the $25? Did your subsequent purchase overdraw your account again?
posted by roomwithaview at 12:53 PM on January 8, 2010
You do have some recourse here. The bank manager offered to remove the original overdraft fees and "work with you" on the rest. It sounds like a good an option as any, considering the alternative.
Also, why did they continue to charge $5/day fee after you deposited the $25? Did your subsequent purchase overdraw your account again?
posted by roomwithaview at 12:53 PM on January 8, 2010
Response by poster: Thanks for the tough love, guys. I knew from the beginning that I had a share of responsibility in this, but I thought the penalties from the bank were a little harsh for such a small mistake.
For the record, I've always been bad with my finances, which is why I don't have any credit cards and *normally* work on a cash basis only. However, just before I went to Michigan (I drove up there in a Uhaul with a relocating friend, who paid for everything - including my bus ticket back) things were very hectic with finals, holidays, packing, planning, and whatnot so I lapsed into old ways and used my debit card. My mistake, and I see that it's going to be a costly one.
I'm aware of how overdraft fees work- I used to have a bank account with another bank many years ago and used checks (not a good idea for someone with dyscalculia). In the past, if I miscalculated something I was quick to correct it and more than willing to pay the overdraft fee (one of the many reasons I usually work on a cash basis). In this case, I just didn't know about the overdraft because it wasn't on my email, and it wasn't on the receipt when I deposited the $25, and I assumed I had money in the account because my debit transaction went through (because my credit union doesn't allow for negative transactions). I now understand that these are misassumptions on my part. I guess I'll just have to beg, borrow, or steal and chalk it up to another hard-learned lesson. *shrug*
posted by patheral at 10:27 AM on January 9, 2010
For the record, I've always been bad with my finances, which is why I don't have any credit cards and *normally* work on a cash basis only. However, just before I went to Michigan (I drove up there in a Uhaul with a relocating friend, who paid for everything - including my bus ticket back) things were very hectic with finals, holidays, packing, planning, and whatnot so I lapsed into old ways and used my debit card. My mistake, and I see that it's going to be a costly one.
I'm aware of how overdraft fees work- I used to have a bank account with another bank many years ago and used checks (not a good idea for someone with dyscalculia). In the past, if I miscalculated something I was quick to correct it and more than willing to pay the overdraft fee (one of the many reasons I usually work on a cash basis). In this case, I just didn't know about the overdraft because it wasn't on my email, and it wasn't on the receipt when I deposited the $25, and I assumed I had money in the account because my debit transaction went through (because my credit union doesn't allow for negative transactions). I now understand that these are misassumptions on my part. I guess I'll just have to beg, borrow, or steal and chalk it up to another hard-learned lesson. *shrug*
posted by patheral at 10:27 AM on January 9, 2010
You are enrolled in your bank's "overdraft protection" plan, which is a doublespeak way of saying they'll loan you money when you overdraft in exchange for an outrageous fee. Most banks put all new accounts in overdraft protection automatically, but you can usually opt out of it. In that case, your transaction would have just been denied instead of incurring ridiculous fees.
I wouldn't feel too guilty about this. Personal finance has gotten insanely complicated in the last couple of years, and unless you treat managing your money like a part-time job, you'll screw up now and again. The important part is to learn from your mistakes and try to keep up with the changing situation.
posted by miyabo at 11:02 AM on January 9, 2010
I wouldn't feel too guilty about this. Personal finance has gotten insanely complicated in the last couple of years, and unless you treat managing your money like a part-time job, you'll screw up now and again. The important part is to learn from your mistakes and try to keep up with the changing situation.
posted by miyabo at 11:02 AM on January 9, 2010
Certainly it's important to realize where you screwed up in keeping track of your balance, but it's more important to realize what kind of relationship you have with your bank. They are not there to help you, they are there to extract money from you any way they can. Some of those are legitimate costs of doing business, and some are all-but-illegal cash grabs. This is a fairly enlightening/depressing collection of info.
posted by logicpunk at 11:06 AM on January 9, 2010 [1 favorite]
posted by logicpunk at 11:06 AM on January 9, 2010 [1 favorite]
Likely, when you deposited the $25 it would not have even covered the overdraft fee, which may be $27, $29, or even higher. You definitely should not have withdrawn anything from it. That would just create another overdraft. The best thing to do in a situation like this is to get your bank on the phone or in person and ask them, "I see I an overdrawn by 70 cents. What will be the fees?" They'll tell you and that's the amount you need to deposit. Only one OD fee, and not a spiraling effect into hundreds of dollars.
My advice. There's a million articles on the Internet about the rip-off business banks are in with these outrageous fees.
I switched to online banking through ING Direct several years ago. I have never had one problem with them. Many people, like my brother, would recommend credit unions.
I like ING. They give you a $25 overdraft amount, so in your case with the 70 cents, you wouldn't have had any negative repercussions and would've easily been able to make a purchase on the $25 you deposited. They don't charge unreasonable fees to use your $25 overdraft. It's some small percentage and it comes out at the end of the month, so I think the most I've been charged is around 10 cents for using the entire $25.
I don't use it anymore though. I've made better habits and now have a decent amount saved and I always keep $100 in checking that just sits. I don't go into it.
In your situation, I'd just pay it off with payments you can afford like I did with my bank (make arrangements with them). Then go find an online bank or credit union that suits your style. Any local bank is going to cause you the same grief, so stay away from them.
posted by VC Drake at 12:15 PM on January 9, 2010
My advice. There's a million articles on the Internet about the rip-off business banks are in with these outrageous fees.
I switched to online banking through ING Direct several years ago. I have never had one problem with them. Many people, like my brother, would recommend credit unions.
I like ING. They give you a $25 overdraft amount, so in your case with the 70 cents, you wouldn't have had any negative repercussions and would've easily been able to make a purchase on the $25 you deposited. They don't charge unreasonable fees to use your $25 overdraft. It's some small percentage and it comes out at the end of the month, so I think the most I've been charged is around 10 cents for using the entire $25.
I don't use it anymore though. I've made better habits and now have a decent amount saved and I always keep $100 in checking that just sits. I don't go into it.
In your situation, I'd just pay it off with payments you can afford like I did with my bank (make arrangements with them). Then go find an online bank or credit union that suits your style. Any local bank is going to cause you the same grief, so stay away from them.
posted by VC Drake at 12:15 PM on January 9, 2010
As far as my first line above, I now see that the fee is $35. That's crazy. And $5 a day. Never heard of such a mean thing to do to people who obviously don't have money. Like smeater44 said, "Ask mom and dad. Ask anyone."
posted by VC Drake at 12:27 PM on January 9, 2010
posted by VC Drake at 12:27 PM on January 9, 2010
I don't have any suggestions on avoiding the fees, but once you get everything sorted out, I recommend killing off all accounts with that bank and finding a new one or a credit union. Be sure to tell them why as well ("you're fees are lame"). True, the bank is probably in the right according to what you signed, but any business (yeah, banks are businesses) who treats customers like crap aren't worth your time. Be sure to tell friends and family why your banks sucks, too. The only way these fees will be abolished is if the banks loose customers and money. Do yourself and everyone else a favor by supporting a company who actually cares.
I switched to a credit union after my bank decided to start charging me some random fees which were greater than the interest I got each month. They lost my buisness and I never looked back.
posted by Kippersoft at 3:02 PM on January 9, 2010
I switched to a credit union after my bank decided to start charging me some random fees which were greater than the interest I got each month. They lost my buisness and I never looked back.
posted by Kippersoft at 3:02 PM on January 9, 2010
Kippersoft- if they were paying you interest, they were your customer.
posted by gjc at 7:09 PM on January 9, 2010
posted by gjc at 7:09 PM on January 9, 2010
Long-term view: one thing to keep your eye on as a citizen is activists have occasionally pushed through state legislation to moderate some of the more egregious abuses of the banking industry: stuff like presorting debits from largest to smallest before assessing (which makes sure your account overdrafts sooner than latter and racks up the maximum insufficient deposit fees), allowing transactions to clear on accounts without insufficient funds, capping overdraft fees and restricting the kind of situation you're in where your account is hostage to a negative balance and an ongoing daily fee is assessed. While you are on the hook for this that doesn't change the fact that your bank's policies are definitely on the extra shitty side (as so many are... when I first signed up with Wells Fargo - Norwest at the time - they called my checking account type "totally unbelievable checking," and I used to joke that over the course of several years it steadily transformed into "totally believable checking." Fucking banks).
posted by nanojath at 9:44 PM on January 9, 2010
posted by nanojath at 9:44 PM on January 9, 2010
Best answer: While you should try to get this straightened out, attitudes like this are not helpful:
Don't take this shit lying down. It was a 70¢ mistake, one the bank used to catalyze a $200 theft.
posted by delmoi at 11:29 PM on January 9, 2010 [2 favorites]
This wasn't a 70 cent mistake. When you found out you had lost awareness of the true state of your financesWhile these penalties are legal, they shouldn't be. It's a travesty that they are. Big banks have a stranglehold on congress and are using their power to extract money from the poor/working class/middle class in order to pay dividends and bonuses to their shareholders and VPs.
---
I knew from the beginning that I had a share of responsibility in this, but I thought the penalties from the bank were a little harsh for such a small mistake.
Don't take this shit lying down. It was a 70¢ mistake, one the bank used to catalyze a $200 theft.
posted by delmoi at 11:29 PM on January 9, 2010 [2 favorites]
I received one [email] that informed I was seventy cents overdrawn.
If you decide to try any more negotiating with the bank about those fees, you might be able to use this as your leverage. You were under the impression that the bank would notify you of your daily balance. Their notice said negative 70 cents - it DIDN'T say negative $35.00. Have you been getting emails for every $5 charge since then?
And another thing, are the $5 charges for every day or every BUSINESS day? You may be able to get the weekend charges eliminated if you can quote their policy that 'deposits after 3pm will be credited on the next business day' (or whatever it actually says on the website/ATM where you could make a deposit).
posted by CathyG at 11:32 AM on January 11, 2010
If you decide to try any more negotiating with the bank about those fees, you might be able to use this as your leverage. You were under the impression that the bank would notify you of your daily balance. Their notice said negative 70 cents - it DIDN'T say negative $35.00. Have you been getting emails for every $5 charge since then?
And another thing, are the $5 charges for every day or every BUSINESS day? You may be able to get the weekend charges eliminated if you can quote their policy that 'deposits after 3pm will be credited on the next business day' (or whatever it actually says on the website/ATM where you could make a deposit).
posted by CathyG at 11:32 AM on January 11, 2010
Response by poster: Well, I did bring up the fact that the overdraft was not mentioned on the first email, they said it didn't matter. I finally negotiated the fees down to 50% and borrowed that from a relative and got my account to $1 in the black. HOWEVER! I received my daily email today, and I am now $12 overdrawn because my yearly fee was tacked on to my account yesterday. If I remember correctly, I won't be charged overdraft fees for the yearly fees, but that just ticks me off that I didn't remember January was the month I opened the account - I would have borrowed the extra money. (I hope I don't get charged overdraft for fees, I'm sure I remember that when I opened up the account)
posted by patheral at 12:21 PM on January 11, 2010
posted by patheral at 12:21 PM on January 11, 2010
This thread is closed to new comments.
posted by delmoi at 3:03 AM on January 9, 2010