They took HOW MUCH??
November 25, 2007 9:02 PM   Subscribe

Over the last 18 days a friend was charged $455 in overdraft fees from Bank of America.

He works abroad, so all the little notes they send haven't reached him- he just found out when he signed online from St. Tomas to send his mother some money. He signed up for overdraft protection last year, through BoA in a California branch. Any ideas how we can best argue his case with BoA?

Theoretically, he shouldn't be charged all these fees, since he has overdraft protection, right? But will they listen? Is he better of talking to one of their 'associates' or emailing them? (He's already emailed them, and their call center closes at 5 pm on Sundays)

Will it matter that he's been a customer for several years? Or that he would, over this, take his business and that of his family (3 accounts total) away from BoA? He somewhat regularly gets overdraft fees (which I assume means the bank would like to keep him) and also somewhat regularly has a reasonably hefty balance- he just gets paid sporadically ergo the boom and bust.
posted by arnicae to Work & Money (32 answers total) 3 users marked this as a favorite
My wife has dealt with them a couple of times on this issue, and so far been able to get almost all of the fees overturned. I'm pretty sure it was partly because of an error on their part (i.e. sending checks for the wrong account), so if he was supposed to have protection for this sort of thing, he may have success arguing his case. I'd suggest calling wherever his "local" branch is - perhaps where the account was first opened, or where his parents live.
posted by entropic at 9:06 PM on November 25, 2007

this happened to me at my bank where i have been a customer for years. as a freelancer, my account is also usually boom or bust. they cover the money that isn't in the account but they charge you a fee for doing it each time, which can add up quickly.

i have pleaded and argued with the bank (with both a regular associate and a manager) because i was charged the fees when the bank held my checks for longer than i was told they would be held—but pretty much to no avail. the most they did was to take off one charge.

it's pretty much a no go in terms of getting your fees back.
posted by violetk at 9:09 PM on November 25, 2007

I canceled my account with BoA last week because of their overdraft fees. They wouldn't budge even after years of having my money, so I closed the account. They couldn't have cared less when I did.
posted by kcm at 9:15 PM on November 25, 2007

Theoretically, he shouldn't be charged all these fees, since he has overdraft protection, right?

Wrong. The overdraft protection only protects you against fees or penalties from the recipient of your check. The bank itself still charges you a fee for every bounced check.

Will it matter that he's been a customer for several years? Or that he would, over this, take his business and that of his family (3 accounts total) away from BoA?

I doubt it. I'm sure they hear this threat constantly, and unless his account balances total in the multi-millions, they won't really care if he does take his business elsewhere.

The bottom line is that if the bounced checks were his fault (i.e. he wrote checks for more money than was in his account), the bank isn't going to have much sympathy for him. If it's his first time ever bouncing checks, they might waive part of the fees this one time, but from what I understand, BOA is a pretty tough cookie about this sort of thing, so it wouldn't surprise me if they held their ground.

Your friend should consider this a very expensive lesson learned, and in the future, he should keep a better eye on his active bank accounts. Most banks have online banking where you can track your spending and balances; I'm not a BOA customer, but they're a big bank, so surely they have it too.
posted by boomchicka at 9:24 PM on November 25, 2007

Response by poster: Wow, that's some pretty disheartening news. My buddy says the bank sold him overdraft protection as a way to avoid overdraft fees of $35 per transaction- they're not checks, they're all very small expenditures- a subway sandwich at the international terminal of LAX, etc. The $35 fees are triple what he was spending each time. I'm going into his branch tomorrow morning- hope I'll have better news. I'm a customer at BoA as well and had one issue with them in the past- they resolved it quickly and in a really friendly manner, so I have high hopes that they'll be just as appropriate this time.
posted by arnicae at 9:29 PM on November 25, 2007

I don't know if this is still true, but I remember reading a story a while ago about how banks line up charges in order from highest to lowest in order to maximize overdraft fees. A Google search yields this result, from Consumerist, which seems to indicate that this policy might still have been in place at BofA in at least March of this year.

Also, violetk is right that most banks charge you per overdrawn amount. At my bank (WaMu), it's $35 per overdraft. If the same is true at BofA, at $35 a pop, it would only have taken 13 overdrafts to hit $455 in fees, which he could conceivably have done in 18 days.

There are any number of stories about overdraft fee problems on the internet, including anecdotal evidence of what people have done in response (most of it is not heartening). I wish your friend luck.
posted by lassie at 9:37 PM on November 25, 2007

On postview, every small expenditure your friend made probably cost him $35. Therefore, that $10 subway sandwich at LAX terminal actually cost him $45. If he did this 13 times, there's your $455. Also, I think boomchicka is right -- it's hard to argue with these banks about such matters -- your friend needs to pay more attention to his bank account online. I don't say this without sympathy, but with empathy.
posted by lassie at 9:40 PM on November 25, 2007

I quit using BOA for exactly this reason. They will not give him his money back if my experience is anything to go by.

Pay the money and close the account is what I did.
posted by winna at 9:44 PM on November 25, 2007 [2 favorites]

I second boomchicka comments. In my family when this happens we refer to it as a stupid or lazy tax. Rarely if ever does the bank give back the fees. These fees which in my opinion are way to high for the offense are designed as profit centers for these institutions. Just keep an eye on your money and your account, especially in this day and age with the web when you can have 24hr access. I would suggest that if he is boom or bust that he just save more for the slow times. If he routinely has overdraft charges he is paying out percentage wise ( $35.00 on a $10.00 check is a 350% penalty and he still owes the $10.00) way more than the hurt it would be to save more and keep up with the mundane task of balancing his checkbook.
posted by HappyHippo at 9:45 PM on November 25, 2007

Response by poster: Any suggestions on how to approach the call? Beg? Apologize? Call their actions predatory?

Everyone seems to agree that threatening to leave doesn't help, so what *would* help?
posted by arnicae at 9:45 PM on November 25, 2007

Be polite, ask if it's possible they've made some mistake because he thought he bought overdraft protection for just this purpose, and then say you'd appreciate any assistance they can give in this obviously unusual situation. For my bank (not BOA), the main factor that seems to drive their helpfulness is whether or not you've had overdrafts before. If this is the first time he's done this, you probably have a much better chance of clearing some or all of the fees. I got my bank to cut mine in half in a similar situation, and probably could have gotten more if I hadn't had an overdraft in the previous 12 months. Regardless, if they won't waive all of the fees, asking for half would be my next move.

Btw, unless your name's on the account, you might want to have your friend available via phone to give them his permission for you to work on his behalf. Without that, I kind of doubt you'll be able to get much information about the status of someone else's account.
posted by mediareport at 9:45 PM on November 25, 2007

Response by poster: Thanks- the bank manager knows both me and my friend well, I don't think it will be an issue (if it is, I won't be able to help- Sprint cell service only works intermittently where he is!!)
posted by arnicae at 9:56 PM on November 25, 2007

You won't get anywhere by calling their actions predatory. These are the same people who charge $10.00 to cash a check for non account holders. They are in the business of charging fees, that is how they make money. They used to make money by charging interest and still make some that way, but fees and penalties are their real golden egg. You have to understand their side to beat them. Their stance will be that your friend agreed to this when he signed up and in fact did. As for taking your business elsewhere, well, unless you have a substantial amount of holdings personal banker and generate management fees they probably won't care. So how do you beat them? Don't write checks when their is no money in the account, and understand everything that you sign including the penalties and fees before you sign on the dotted line.
posted by HappyHippo at 9:59 PM on November 25, 2007

If your friend just rolls over, takes the fees, and then (maybe) goes elsewhere, the bank loses nothing. If you at least fight it, that gives them incrementally more incentive to at least be clear in the future, or possibly resolve the issue in your favor. It sounds like their reputation is starting to suffer.

I'd start with a calm phone conversation, then move to paper-based letters. Paper -- how quaint and official, and how indicative that you won't just go away without a fight.
posted by amtho at 9:59 PM on November 25, 2007

The way Overdraft Protection works at Bank of America is at the end of the day, if your account is overdrawn, money will be transferred from the linked account (which can be a Savings account, a Credit Card or a Line of Credit) in increments of $100 to cover the amount of the total overdraft. You get charged $10 per day this happens, instead of getting hit with the Overdraft fees (which I think are $10 the first instance, $21 the second, and $31 every further time (and those fees are per transaction)). For example, if you are overdrawn $29, the bank will transfer $100, if you are overdrawn $1245, the bank will transfer $1300, if you are overdrawn $0.01, the bank will transfer $100.

What may have happened is that your friend either closed the account that was providing the Overdraft Protection or did not have increments of $100 available in that account to cover the overdraft (i.e. he had $899 available, and he was overdrawn $850).

Frankly, his relationship with the bank will probably not affect the decision at all. He would do best to speak with a Personal Banker (though I don't think they still call them that) at the branch where he opened his account. If my theory above is correct, they will probably not be able to remove all of the fees, but perhaps they can remove some of them. Best approach is to be polite and realize that it was (probably) his mistake, and not the bank's. Humble is better than aggrieved.

Note: California accounts are somewhat different from accounts in the rest of the country, and my knowledge of BAC procedures and policies is over a year out of date. Please feel free to MeFi Mail me if your friend has further questions.

And on preview, you should NOT be able to get information about your friend's account, no matter how well the manager knows you, unless your name is on the account as well. If the manager allows it, it would be a major violation of all kinds of security procedures and policies.
posted by Rock Steady at 10:00 PM on November 25, 2007

As one who never misses a chance to tilt at windmills I do wish you luck in your task. Let us know how it turns out :)
posted by HappyHippo at 10:01 PM on November 25, 2007

Oh, incidental sidenote: Bank of America policy says that the name of the corporation should not be abbreviated (either B of A or BOA). If an abbreviation must be used, the corporation's stock symbol -- BAC -- is the only one possible.
posted by Rock Steady at 10:03 PM on November 25, 2007

Would the OP be able to get information on the account with a properly executed power of attorney? I execute these fairly often, and know that they cover bank accounts, but can't remember if they only cover deposits into and withdrawals from such accounts, or if they extend to accessing information about such accounts.
posted by lassie at 10:04 PM on November 25, 2007

I've been a BoA customer for several years. Due to poor money management skills, I've overdrafted my account an embarrassingly high number of times- even WITH overdraft protection. I can tell you from experience that BoA couldn't care less how small the expenditures were- I've been slapped with the $35 fee for going as little as 50 cents over my balance.

I'm assuming your friend's overdraft protection is drawn from his savings, yes? If there is not enough money in his savings to cover the checkcard purchases he made, overdraft protection does absolutely squat, and the checking account is then assessed the normal $35 fee. Also keep in mind that BoA charges a $10 transfer fee when money is moved from savings into checking for overdraft protection.

As far as getting the fees reversed, your best bet is paying a visit to his branch. Sometimes you're fortunate enough to speak with a sympathetic CSR willing to cut you a break- it's worked for me a few times, but more often than not I've been forced to simply suck it up and pay for my mistakes.

I wish your friend much luck... he's going to need it.
posted by MiaWallace at 10:07 PM on November 25, 2007

The last time something like this happened to me (a series of overdrafts via the use of a check/debit card, not checks), I walked into the bank branch and argued that the credit company should have denied my purchases, rather than sending them through. The bank manager said, "Yeah, you're right, but we don't normally do that." I demanded that they make some kind of change to my account, and they said they couldn't (never mind that an account I had at another, larger bank did exactly that), but since I hadn't had any offenses in about five years, they knocked off all but one of the overdraft charges.

This was at a Wachovia, by the way. Long story short, if he can to his branch in person, be extremely polite but determined, he should be able to knock off at least some of the fees. If he can't make it there in person, he needs to call his branch office--the national phone line folk aren't necessarily bastards, but they don't have the authority to do anything about it.
posted by thecaddy at 10:24 PM on November 25, 2007

Best answer: I was charged overdraft fees with BoA once, and it was my fault (somehow I just missed that I had used money I didn't have in the account). I went to the bank in person, and they reversed the fees for me. I told the customer service person that I hadn't realized that I'd made the charges prior to putting more money in the account, that I almost never make mistakes like that, and that I'm a grad student and really couldn't afford to pay the fees. The woman I talked with was helpful and said "it happens to all of us sometimes." She had to get special permission to do it, and it definitely wasn't a run-of-the-mill thing for her to do but I emphasized that I rarely make that kind of mistake (and the fact that I couldn't afford the fees), and it worked out in my favor.

Also, I have gone in to talk with someone when I was erroneously charged a fee. That time, I did say that I would have to switch to another bank if I was going to be charged fees simply for having an account with BoA (the fee was for not having a minimum balance, even though my account type didn't require that). The customer service person that time did seem concerned with keeping me as a customer, and told me that if the account type I have doesn't work for me in the future I should come in and talk to them and they'll try to find something that works better for me. When I told him I'd have to switch to another institution if BoA didn't have a checking account I wouldn't be charged for, he said that they wanted to keep me as a customer (and no, I don't have scads of money with them).

I think the key in both of these cases was that my current local branch is a large-ish one with a few people always available in customer service. I've also noticed that they have flyers posted stating their goal for maximum time people have to wait in line, etc. So I definitely think they're being pushed to meet customer satisfaction goals.

I would suggest approaching them in a "how can we make this work?" way, rather than simply threatening to close accounts (though by all means mention that if it comes to that). Even when I mentioned that myself, I framed it in terms of me having to do what makes the best financial sense. I also like to emphasize that I understand it's not the person I'm speaking with who charged me the fees - keeping this in mind helps me stay calmer, and I think reassures the person that I'm not going to flip out on them.

Your friend should be able to do online banking rather than waiting for paper notes in the mail. Even if he doesn't have regular online access, he could keep a register of all his withdrawals and deposits. A little bit of work, yes, but better than having to pay extra fees. Also, the bank should be able to work with him to find an account that better fits his needs (especially given that he carries a large balance some of the time).

Not sure how you not being the account holder will affect things. I wouldn't be too optimistic that they'll let you do any of this for him without them having written permission from him (or something like that). Can he have someone in the States added to the account so that person can take care of stuff like this in the future?

To be clear, there are two separate issues that need to be addressed with your friend's situation:

(1) Overdraft fees were charged, seemingly erroneously. Find out why - was this an error, or justified? If justified, find out why they were charged (i.e., even though he has overdraft coverage) so he can avoid it happening again. Either way, see if they'll reverse the fees this time, or at least reduce them (I have been successful in getting fees reduced at other places in the past).

(2) Find out if there is a different type of account that will better fit his deposit/withdrawal habits. Tell them that he doesn't want to close his (and his family's) accounts with BoA, but that he may have to if they don't have an account that makes sense for him.

And tell him to get that register out and use it (jot down expenses on a piece of paper and write them in later)! Bank fees are a waste of money...
posted by splendid animal at 10:25 PM on November 25, 2007

For example, if you are overdrawn $29, the bank will transfer $100, if you are overdrawn $1245, the bank will transfer $1300, if you are overdrawn $0.01, the bank will transfer $100.

What may have happened is that your friend either closed the account that was providing the Overdraft Protection or did not have increments of $100 available in that account to cover the overdraft (i.e. he had $899 available, and he was overdrawn $850).

In Arizona and New Hampshire (the two states I've had BoA accounts), the bank will transfer amounts less than $100 out of savings to cover overdrafts. I've had instances in which there was as little as $15 in my savings account, and that was transferred into checking to cover an overdrawn balance.
posted by MiaWallace at 10:27 PM on November 25, 2007

I am leaving Bank of America for the same reason. They really bleed you dry.
posted by thebrokenmuse at 10:29 PM on November 25, 2007

Response by poster: Thanks HH- I'll get back to you guys.

My buddy is actually in a pretty enviable financial position- but the money is tied up in long-term assets management. Obviously he needs to work on his short-term planning, but I think that's pretty obvious to him after this little incident, so I'm trying to be helpful and friendly rather than judgmental and punishing.

Besides, I've gotten an overdraft or two in my time (groan). These days, my debit card is my best friend!
posted by arnicae at 10:29 PM on November 25, 2007

Response by poster: thebrokenmuse-

Did you find a better place to go? I think he's definately considering it. He told me if he could get 6 of the 11 overdrafts reversed, he'd stay, but otherwise, his family is changing banks, so advice would be appreciated!!
posted by arnicae at 10:32 PM on November 25, 2007

I left BofA for the same reason- I had an account since I was in high school, and had never bounced a check. I then got three overdraft notices in one weekend when using my debit card. They couldn't care less that I had been a good customer for years. I have an account at a credit union now.
posted by oneirodynia at 11:56 PM on November 25, 2007

Had WaMu, my wife occasionally successfully argued us out of a stack of fees (usually when five charges, say, came through in the same day, and rather than post the four lowest first so that the fifth and biggest overdrafted, they posted the largest first so that all five overdrafted -- instant $125!) but it was ridiculous.

We even signed up online for a service they offer to notify you if your balance drops under during the day, so that you can pump it back up by end of day -- but we only got the mails once. The bank was remarkably unsympathetic to this, walking us through the layers of the web site to show us the fine print that essentially says "if it doesn't remind you, tough."

We inquired about overdraft protection, but it turns out it doesn't do what you'd think; personally I think it would be more helpful if you simply couldn't use the card below your limit. That's the kind of "protection" I need, anyway.

So we pulled our money -- in the 4-digits at the time -- and moved it into a local credit union. When you overdraft, they move money from your savings to your checking to cover it automatically, and a little bit extra, too, and charge $3 a day for unlimited overdrafts. That way if you have a bad day and there's enough in the savings account to cover it, it only costs $3...and if you don't have enough to cover it, your card doesn't work. Just like nature intended.

Funny thing, though: now that we've suddenly got more money than before (unrelated cause too boring to detail), we've got 6-figures sitting in accounts in the credit union. You'd think WaMu would have at least taken an interest in us at that level; they certainly perked up in the customer service department the first time we crossed the 5-figure barrier...

Oh, and our credit union's CD rates beat every bank on except one. I encourage you to check out your local credit union.
posted by davejay at 12:19 AM on November 26, 2007

I had the same exact problem (though not as severe as your friend.) In my case I used an "electronic check" to pay a bill but forgot about it. A week later the changes posted to my account causing another three or four debit card purchases to "bounce" in a way. Each was cost me $25 bucks so, so my account was negative $120 or so.

I went into my local branch, explained the situation and because it had never happened before they got rid of all but one of the over draft fees. Jerks still made $25 (or whatever it was) off of me, but it was my fault.

Now I have over draft protection linked my savings account, so no more worries.

Bank of America will zing you if you give them a chance, but the service and features they offer are the best I've seen, so I still swear by them... I'm just extra careful with my account now.

Sometime I'll have to tell you about the time T-Mobile tried to bill me $900 in one month for using my mobile as a data modem... heh...
posted by wfrgms at 12:49 AM on November 26, 2007

Former BofA branch manager here. I had many customers call me directly to ask for a reversal of fees, especially in cases like this where they'd really gotten out of hand. I almost always tried to help them out, if they were not belligerent with me. Just explain the situation and ask for a reversal. Can't hurt.
posted by unclejeffy at 4:27 AM on November 26, 2007

personally I think it would be more helpful if you simply couldn't use the card below your limit.

This is exactly how my bank card *used* to work. Sometime in the last 5 years, my bank stopped the cards from working this way, instead letting the charges go through and then tacking on the overdraft fees. A perfect example of diminished service so the bank could make more money. When I got caught out by the switch a few years back, they smiled and said they'd notified their customers of the change in the monthly statements.
posted by mediareport at 5:48 AM on November 26, 2007

Response by poster: Hey guys,

Just got off the phone with them- they took care of 1/2 of the charges, which is enough to satisfy my friend. The first rep I spoke to hung up on me while I was looking up data (argh!) and the second rep was argumentative "well, miss, you just agreed and I agreed that the charges were valid, so you just agreed that the overdraft was valid as well"

But when I asked to speak to her supervisor, the air cleared quickly. He was friendly and firm- after I insisted politely that the fees were over the top, he offered a firm figure that he could refund, no more than that, and didn't budge.

Still sucks, but good enough. Thanks for the feedback!
posted by arnicae at 11:50 AM on November 26, 2007

Late to the game, but wanted to add that there is no $10 transaction fee if you transfer money from your cash reserve/overdraft account to checking yourself, rather than waiting for the bank to do it.
posted by Sweetie Darling at 4:22 PM on November 26, 2007

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