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Bank of Extortion

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Amaroq
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I'm really angry. This letter I wrote to Bank of America's customer service via an online form pretty much sums it up.

Why did you guys manipulate my transactions to extort the most money possible from me? That $200 check I wrote occurred LAST. There is a four-day gap where you don't register any of the transactions I made before that check. Then suddenly, on the 13th, the same day my friend deposited that check, it suddenly clears first, no pending time at all, and nine other transactions post after it in order from most expensive to least expensive!? Because of your manipulation, I am going to be charged seven overdraft fees, all for transactions worth just a few dollars each.

I expect to be penalized for allowing myself to go negative in the first place. I should've gotten one overdraft fee for that $200 check that was deposited after all those other transactions took place. Instead I see my transactions rearranged so you can extort seven overdraft fees from me. That's $245 dollars in overdraft fees when I should only have to pay a single $35 fee.

Chase never pulled this bullsh** on me. My transactions were posted the same day I made them, instantly, even if they were pending. I could see, at any time, online, what my funds were, even when they were pending. Chase has a habit of posting debits before deposits, but that can be planned around. Explicitly hiding transactions and then rearranging and revealing them all at once cannot be planned around. If you have a desire to keep any customers at all, I think you should revise your practices to be more honest, because I doubt I'm the only customer who's noticed this happening.

I advocate selfishness, but rational selfishness, not irrational extortion. I believe it is in your bank's selfish interest to be as just to your customers as possible so they don't feel the need to leave for better banking elsewhere. Fine them overdraft fees when they overdraw their account, but be fair about it and process things in the order they go through.

A $200 check I wrote literally cleared the same day it was deposited by my roommate. There's three day gap in which none of the purchases I made apparently happened, then on the fourth day, they all came through. On the same day as that check was deposited and cleared. Rearranged in order from greatest to least. $200 went first, then a $45 transaction for gas, then a $17 dollar transaction, then a $10 one, which put me in the negative. Then six more transactions all between $1 and $3, still ordered from greatest to least amount.

Like I said, charge me the overdraft fee I deserve for letting myself hit negative. Don't dishonestly rearrange my transactions to extort an extra $210 from me. I'm flipping pissed. Bank of America is going to lose a customer over this if this isn't fixed. And by letting you guys know about this, potentially more than just one if some agreement isn't reached.

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This happened to me recently, too, and they never refunded me, so I switched from BOA to BB&T. But frankly, I think all banks work this way. Larger checks post first because they don't want to put you in a situation where your $3 check for candy goes through, and then your mortgage payment check bounces.

--Dan Edge

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Thats weird timing I agree. I bank with Suntrust and my charges are up within minutes usually. I wonder why there isn't some sort of established industry standard or contractual guarantee with this, you would think it would be a big selling point since this affects everyone.

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Many banks work this way, and it's published policy.

May I suggest you abandon your outrage in favor of learning better money management skills so you never face this situation again?

I agree. As Dan pointed out, there are very good reasons why the bank works this way, and if you kept better track of your money -- meaning simply don't spend money that you don't have -- you'd never have to worry about it.

However, I would also suggest abandoning your outrage in favor of calmly and politely explaining your situation to the bank's representative, and asking him/her to remove all but the $35 fee. I've heard that a lot of times banks will be very forgiving, as long as you don't come off as an angry asshat. (I've never had to find out for myself, though, so take it with a grain of salt.)

Edited by Rudmer
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One time I needed to withdraw a little money, so I wrote myself a check from my own account and cashed it. Well, it turns out the bank teller entered 10,000 pesos rather than 1,000 on her first try, and I was struck with an overdraft fee. Since she realized it at once and informed me, I talked to the branch mananger and he assured me the fee would be refunded.

It was.

But it took three days to get refunded. During those three days my balance was lower, and it turned out in my next statement the average balance was below the 5,000 pesos minnimum, so they charged me another fee and witheld interest payments. Of course I complained about it. Eventually they refunded the below-minnimum fee, but not the interests due (they were tiny, but they were mine). I left that bank for that reason.

Another bank I had a card with would scream bloody murder if I paid them late. Every so often I have too much work and I forget to pay on time. Invariably I pay after a day or two, but this bank would hound me with calls all month long until the next payment.

One time I did pay on time via electronic transfer from another bank, three days before the deadline. Such transactions are supposed to take one day for processing, so I figured all was well. it wasn't. I get a call the day after deadline demanding I pay. SO I checked with my bank and it turned out the other bank had rejected teh transfer. I canceled that card soon afterwards.

Lastly a funny story. I owed Citibank about 50 pesos (at the time about $12 US) from a credit card I seldom used. I forgot to pay it, but decided to wait until the next month to pay it back. Well, they sent me a letter in a tone best described as "more in sorrow than in anger," warning me about the harm I could do to my credit rating by such poor handling of my finances. The next day I got an older letter congratulating me on my handling of the card and teleling me they'd raised my credit limit. Well, which one is it? :wub:

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It's an important source of income for the banking industry. They need that $38 Billion a year in fees.(actual number) Haven't you seen the condition our banking system is in? You have to be willing to pull your share to get them out of financial difficulty. The taxpayers can't do it all.

Just be glad your not English. They pay $57 a bounce on average.

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Not all banks work like the OP describes, but my current bank does. You can try any method you like, outrage, calmness, pity-inducing, they do not care. You will recoup little or none of the fees. Each branch manager has strict rules concerning how much they are permitted to refund (I am unsure if this is based on a monthly quota for fees collected or for fees reimbursed).

If you find yourself at the bottom of your bank account and will be for the foreseeable future, I suggest one of two things. If your credit is good, apply for overdraft protection. They open a small ($150) credit account for your checking, and the fee for overdrawing is around a flat $15, up to the $150. If your credit is poor, try to save up to $100, and use that as your own buffer. Once you approach $100, you are in the "danger zone." You could also use a larger buffer if you can afford it, but that worked for me.

aequalsa, I can't believe that $38 billion figure! I guessed it was outrageous, but really.

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Not all banks work like the OP describes, but my current bank does. You can try any method you like, outrage, calmness, pity-inducing, they do not care. You will recoup little or none of the fees. Each branch manager has strict rules concerning how much they are permitted to refund (I am unsure if this is based on a monthly quota for fees collected or for fees reimbursed).

If you find yourself at the bottom of your bank account and will be for the foreseeable future, I suggest one of two things. If your credit is good, apply for overdraft protection. They open a small ($150) credit account for your checking, and the fee for overdrawing is around a flat $15, up to the $150. If your credit is poor, try to save up to $100, and use that as your own buffer. Once you approach $100, you are in the "danger zone." You could also use a larger buffer if you can afford it, but that worked for me.

aequalsa, I can't believe that $38 billion figure! I guessed it was outrageous, but really.

I remember reading somewhere that fees are either their primary or most profitable aspect. It also said the average cost to a bank for a bounced check was like $1.35

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I've seen some outrageous bank fees.

A fee for writing a check without sufficient funds is perfectly all right. But for a time there was a feee for trying to cash a check with insufficient funds. Now, how I am supposed to know the check a customer gave doesn't have enough funds? That one died through a general outrage and a few neswpaper stories. It took two years.

Antoher thing banks do here is offer you some form of insurace. If it ended at that, fine. But it doesn't. Suddenly a small charge shows up in your statement, then they tell you they've signed you up for a great insurance deal, but you can opt out and the charge will be refunded.

You can and it will be, if you can stand the 45 minute call needed. because the bank's agent won't simply let you opt out. He'll insist on giving you all the particulars and he'll try to convince you to stick with it. One time I had to threaten legal action to get the agent to finally opt me out.

Some of the deals offered are very good, too. I've taken one voluntarily but ahve refused all others. One was a roadside aid and legal aid in case of accident. it was pretty good, but I already have that included in my car insurance (I've even used the roadside twice).

Sometimes it's hard to stay pro-business about abnks when they resort to such tricks.

Currently I'm looking to transfer all my money to one bank that pesters you with calls about insurance, but promises never to charge you a cent unless you first opt in. For the time being, at least. My current bank once made the same promise.

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I have worked for Bank of America back when it was NationsBank. I was part of the analytical team on the BankSouth of GA purchase. Our job? Take all the branch and ATM financials for BS and NB banks and ATMs and identify which branches and ATMs should be closed.

The single largest deciding factor on branch and ATM retention? Fees collected.

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I had a credit card once that I always paid on time. One month, I glanced at my bill a little too quickly and read an 8 as a 3. So when I wrote the check for the bill, I was $5 under. The bank charged me interest on the entire month's balance, plus a $35 fee -- for being $5 short! I called customer service and hollered, but all I got was "it's a legitimate charge." It may have been allowable according to the fine print of the agreement, but it sure seemed like a crappy way to treat someone who'd been paying bills on time for years. I hung up in sheer frustration.

I later learned that I would have been much more likely to have gotten a refund of the fee if I had approached the situation differently -- calling and politely, but firmly, stating that I thought the fee was out of proportion to the mistake and to please cancel my card immediately. It's not that you catch more flies with honey -- it's that the choice for the bank turns from "charge the customer or don't charge the customer?" to "pocket a one-time $35 fee and lose the customer, or forgo the fee and keep the years' worth of fees charged to merchants whenever she goes shopping?" I've read that many banks will waive fees if asked by a long-standing, reliable customer so as to avoid losing the account.

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I later learned that I would have been much more likely to have gotten a refund of the fee if I had approached the situation differently -- calling and politely, but firmly, stating that I thought the fee was out of proportion to the mistake and to please cancel my card immediately. It's not that you catch more flies with honey -- it's that the choice for the bank turns from "charge the customer or don't charge the customer?" to "pocket a one-time $35 fee and lose the customer, or forgo the fee and keep the years' worth of fees charged to merchants whenever she goes shopping?" I've read that many banks will waive fees if asked by a long-standing, reliable customer so as to avoid losing the account.

It doesn't always work, though. I was a happy customer of commercial federal before it was bought out by bank of the west. In the process they changed account numbers. After/during this transition, I noticed some unidentifiable charges which were on my statement alongside my own, ran my account into the negative quickly stacking up nearly $800 in fees. I went in to politely protest and they assured me that they were all legitimate charges from my SEVEN atm cards.

I said "Seven? Why would anyone have seven atm cards?"

She replied, " I don't know why you ordered seven atms cards."

I quipped back, " My point was, that I was being ironical-I didn't order seven atm cards."

"Our records indicate that you did."

"Well, then your records must be mistaken. Do you have anything I signed which show that I have requested seven cards?"

"No, it's possible that you ordered them over the phone, though."

I said, politely, but firmly, "No...it's really not possible, because I'm not insane."

"I'm sorry, but there's really nothing we can do."

"In fact, there is. Do I close all of my accounts with you or with the tellers?"

Unabashedly, without any concern or regret, "You would have to do that with the tellers."

Now, I had several accounts with them since I was running my own company at the time. So went to the teller and withdraw every cent that I had in all accounts. She tried to write me a cashiers check, and I said loudly enough for the bank to hear, but without yelling, "No...you're a pack of thieves and criminals. Your word is no good. I don't accept checks from criminals. There's obvious trust issues. I want it in cash or gold bouillon-your choice."

They went to the safe and then counted it out warning me that I would still be liable for any outstanding charges(there were not any since I stopped using my accounts once I noticed). I told her to "let me know if they added up to more then the $800 in bounce fees."

I had been a good customer for several years with a good history and a fair amount of money with them and they didn't give a rat's pahtooey that I was leaving. Sadly, before this took place I was sitting in the waiting area(which was completely full) with everyone complaining about this happening. Even little old ladies who had banked there for 20 years.

I think credit card companies(divisions) may be more accommodating. Probably because they are more competitive then banks. Banks, because they are not meaningfully competitive and run so much by the government, seem closer to a bureaucracy then a business, to me. I only use them when I have too and leave as little money as possible in their filthy little, over-regulated hands.

I don't feel bad criticizing them because they are to business as Darth Vader is to being human. There is probably some business-ness buried deep inside their rotting cores but you have to cut them up with a light saber to find it.

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I remember reading somewhere that fees are either their primary or most profitable aspect. It also said the average cost to a bank for a bounced check was like $1.35

... fees a bank's most profitable aspect? How about credit cards, home loans, etc? That's not even close to being true.

Also, I know at Bank of America you can opt-out of overdrafting. It will decline your card for every transaction once you have overdrafted. If you can't manage your money, perhaps you should do that.

The banks go from largest to smallest so that your mortgage payment doesn't get bounced while, as the above poster said, a candy bar purchase goes through.

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... fees a bank's most profitable aspect? How about credit cards, home loans, etc? That's not even close to being true.

Well you'ld have to know the cost basis of the fees to determine which is more profitable. On a $1.35 basis a $35.00 fee is only a 3.8% ROI per transaction, but I find the $1.35 cost highly dubious. Most/all of the transactions are electronic and the equipment costs have been paid for already. I expect that check bounce fees are actually closer to 100% ROI per transaction.

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Yes, I accept that I should've kept a better watch on my money. What I expect isn't a free ride, but to be treated fairly. I want to pay no more and no less than what I deserve to pay. I feel they've manipulated my transactions to take undeserved money from me.

I looked at my statement again, and another charge has gone through on the 14th. No sign of my direct deposit which should have processed instantly at midnight later that day.

I still have my Chase account. I'm most likely going to go back to them and close my Bank of America one.

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I'm really angry. This letter I wrote to Bank of America's customer service via an online form pretty much sums it up.

A $200 check I wrote literally cleared the same day it was deposited by my roommate. There's three day gap in which none of the purchases I made apparently happened, then on the fourth day, they all came through. On the same day as that check was deposited and cleared. Rearranged in order from greatest to least. $200 went first, then a $45 transaction for gas, then a $17 dollar transaction, then a $10 one, which put me in the negative. Then six more transactions all between $1 and $3, still ordered from greatest to least amount.

Like I said, charge me the overdraft fee I deserve for letting myself hit negative. Don't dishonestly rearrange my transactions to extort an extra $210 from me. I'm flipping pissed. Bank of America is going to lose a customer over this if this isn't fixed. And by letting you guys know about this, potentially more than just one if some agreement isn't reached.

A principled approach to budgeting will solve that problem. I don't want to come off as mean, but your victim mentality is the problem, not the bank charging fees or rearranging the clearing of your checks. Spending less than you make is the solution.

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... fees a bank's most profitable aspect? How about credit cards, home loans, etc? That's not even close to being true.

Also, I know at Bank of America you can opt-out of overdrafting. It will decline your card for every transaction once you have overdrafted. If you can't manage your money, perhaps you should do that.

The banks go from largest to smallest so that your mortgage payment doesn't get bounced while, as the above poster said, a candy bar purchase goes through.

I'm pretty sure it was true. I'm sorry that I don't recall the source.

I do sympathize with the anger for the fees. While the fault is certainly that of the person bouncing the check, the punishment is completely ridiculous to scale. If he makes a clerical error and buys 7 $1 items on 7 occasions he is certainly liable for the $7 plus any cost to the bank, so maybe $20 total would be reasonable. A $245 fee for $10 in damages is a little obscene as punishment goes. If someone hits my car and does $3000 worth of damages, I'm not convinced that I would be entitled to $30,000 dollars since "it's HIS fault he hit my car." Intentional fraud would be another story, MAYBE, but for clerical errors and accidents?

I say maybe, because even in the case of informed legal/moral breaches we don't go to such extremes. If someone steals a candy bar we don't lock them up for 30 years.

That said, it is there business(sort of) and they have the right to demand any messed up kind of contract they want and we are free not to do business with them-sort of. Just as long as you find an employer who pays you only in cash.

If they were a free market there might be significant numbers of competing banks who did not do that.

Other industries don't pull this kinda crap. Mcdonalds doesn't charge be $35 every time I spill ketchup on their table, so I'm forced to assume it is something relative to their government enforced oligarchical nature.

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Yes, I accept that I should've kept a better watch on my money. What I expect isn't a free ride, but to be treated fairly. I want to pay no more and no less than what I deserve to pay. I feel they've manipulated my transactions to take undeserved money from me.

I looked at my statement again, and another charge has gone through on the 14th. No sign of my direct deposit which should have processed instantly at midnight later that day.

I still have my Chase account. I'm most likely going to go back to them and close my Bank of America one.

I am also leaving B of A for these reasons. Not because I have been unfairly charged (I have not, I don't bounce checks and I don't use a debit card which sets you up for weird timing problems), but because I am aware that their business practices widely approach fraud and I don't want to deal with that. I only have a few bucks with them now and have moved all my stuff over to a local credit union. This credit union offers excellent customer service and their branch agents are friendly, helpful, and knowledgeable. They treat me with respect even though I don't have much money.

Is a customer owed this kind of treatment from a business? No. Will a smart business do it to attract customers like me? You betcha.

I agree with aequalsa's assessment of banks in general.

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I see that little has changed since I was a customer of theirs in California, 20+ years ago. They didn't bilk me but they were an unholy pain in the ass to deal with. (For instance--if you went there during lunch, there was one teller, because they all took their lunch at 12:00 also. It never occured to any of them to stagger their tellers' lunch hours. So the line would be out the door, with one teller and 12 stations.)

I actually had an easier time dealing with my Colorado credit union--from California--than dealing with *either* B of A or the credit union I had in California, and this was in the days before e-mail and the internet.

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I see that little has changed since I was a customer of theirs in California, 20+ years ago. They didn't bilk me but they were an unholy pain in the ass to deal with. (For instance--if you went there during lunch, there was one teller, because they all took their lunch at 12:00 also. It never occured to any of them to stagger their tellers' lunch hours. So the line would be out the door, with one teller and 12 stations.)

I actually had an easier time dealing with my Colorado credit union--from California--than dealing with *either* B of A or the credit union I had in California, and this was in the days before e-mail and the internet.

I will agree that B of A has a lot of bad business practices as far as practices that make it attractive to do business with them. I do not agree that they are doing anything morally wrong in terms of how they run their business. It is, after all, theirs to do with what they want.

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All major banks have used this practice for a while. Several are now changing it as the federal government and FDIC are threatening increased regulation of overdraft fees. (Thank goodness the government is here to rescue you from the big, evil banks!) Over the past 10 years, about half of major retail banking revenues have come from fees as opposed to the more traditional interest on loans.

You claim extortion and sound like all the consumer advocate groups lobbying for government intervention to protect the poor people that can't understand or think for themselves. It's not extortion; it's free markets. If you don't like it (and I wouldn't if I were you), either manage your money better or take your business somewhere else.

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Like I said before, I accept that it was my fault for not managing my money better. But I feel that I don't deserve to pay overdraft fees on items that should have gone through were the transactions not rearranged.

I don't want more regulation. Like someone mentioned earlier, it would ultimately be better if the banks were deregulated, because competition would make this kind of practice go away fairly quickly.

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