From HuffPo: 29 overdraft fees in 27 days; $1,446 total charges.

[edbermac]

Matthew Miller of San Pedro, Calif. spent $2,395 from his checking account during the month of October. He deposited $3,445 on top of a starting balance of $394. His ending balance: two bucks in the red.

Where did the rest of his money go?

To Chase Bank, in the form of overdraft charges, non-sufficient funds charges and other fees totaling $1,446. Miller said he called Chase repeatedly to try to figure out where he went wrong.

"Nobody can tell me what they're for," Miller said in an interview with the Huffington Post. "All they can tell me is, 'Yeah, it's wiping out your bank account.'"

Clearly, Miller's mistake was to use a debit card without much cash in his checking account. But it's impossible to tell from the statement exactly what he did wrong.

For instance, the statement shows that on Oct. 5, he made a $400 deposit at an ATM that brought his balance to $421. It was immediately clobbered with seven straight non-sufficient funds charges for $33 each that brought it down to $190. (Chase said in a recent statement that it doesn't charge more than six overdrafts a day.)

Ed Mierzwinski, program director for consumer advocacy group U.S. PIRG, reviewed Miller's statement and called the fee situation "one of the worst I have ever seen."

"On Oct. 5 you can see that they post his balance as if he appears to have a full $421.97 after that $400 transfer," Mierzwinski wrote. "But, they then take all the micro-transactions out first, against the $21.97, not the $421.97, causing a ripple of NSF charges... Basically, at the end of the day, they re-order the transactions to maximize the fees."

http://www.huffingtonpost.com/2009/11/04/birthday-spoiled-by-bank_n_344067.html

[ananda]

1. Chase sucks rocks!

I'm so happy that I finally got my important money
moved out of there!

And I look forward to the day when all of it is out
of Chase!

My new credit union is SO wonderful!

[roguevalley]

16. I dumped them. Credit unions are the only way to go. Credit Union 1.

[dhpgetsit]

2. The bank is laughing all the way to the bank.

I imagine they are losing a customer as well.

[depakid]

3. Chase inherited this game from Washington Mutual

Had the Democrats not abandoned their traditional values back in the early 1990's to embrace the banking and financial industry, these sorts of things would never have become commonplace.

[Egnever]

28. Sorry but no

I was a washington Mutual customer and they never once did this to me. Chase has already started and its only been two weeks since the official take over.

[depakid]

29. You were fortunate then, because this was EXACTLY the accounting scam WaMu was using

-and that was the ONLY segment (fees) of the bank's business that was turning a profit during their last year or so in business.

The Rode Grandma's (truth, justice and free checking) died in the 1990's... ;-)

[Rosa Luxemburg]

4. I thought there was a law against banks slapping big overdarft fees on

why don't they let people have overdafts that give them a bit of leeway. I had this happen once when I'd forgotten about a check that hadn't cleared. I had 3 $30 charges in a row. I managed to get them to just give me one $30 fee.

[anigbrowl]

12. There will be, but there isn't yet. It's still a bill rather than law. nt

[Rosa Luxemburg]

32. When?

[Toucano]

5. Been there.

Anyone know what it COSTS the bank when a transaction is denied or a check returned?

[Oldtimeralso]

6. What Chase and Most Other Banks Do

at the end of the business day they subtract any debits before they add any credits.
So Mr. Miller probably took his deposit receipt and thought that he had the $400.00 in his account and made six or more small transactions with his card and these were debits against the $21.97 after which the $400.00 was added to his now negative balance account and the resulting six fees were pure profit to Chase.

[Epiphany4z]

7. US bank did something like that to us

so we switched banks then 5th third did it so we switched again...I have only had checks go wrong twice... both times not because I did my math wrong both times but because we live pay check to pay check and they re-order the transactions to maximize the fees." It can be a catch 22 if you live pay check to pay check...pay your bills on time ...risk the bank pulling the re-order trick or pay the bills late and get a fee for being late...usually its cheaper to pay the bill late..then you only get hit with one fee.

[Epiphany4z]

8. deleted double post

[Kerrytravelers]

9. Sounds familiar.

I'm in education, so in the summer, even through I get paid in arrears, it is only 85% of my regular checks. Yes, we save, but it is still a bit short. Mr. kt's work has put everyone on furlough (sp?) since February, which amounts to knocking 15%-20% each paycheck.

Needless to say, this summer was rough.

We hung in there until the end of September. (My check is smaller in September because we get paid through the 10th of each month. Since school started on September 8th this year, I only had three days of pay on my September check.) I'm not a classroom-based teacher any longer. I'm in Independent Study for children who don't find success in the classroom setting for a variety of reasons (academically ahead, academically behind, physical health, mental health, etc.)

Three days before Mr. kt's paycheck, we discovered that we were slightly overdrawn on a bank account. I went into the bank to find out what happened, and it was just the assessment of this periodic finance charge or that periodic finance charge that put us over by just a mere $35. We ended up assessing approximately $130 in fees in a matter of three days. They knocked off a few bucks here and there to get us to the $130.

When Mr. kt's paycheck came in, I went right in, paid the difference and everything balances now. This was all within the same month. If those couple of periodic financing fees had been drawn just a couple of days later, they still would have gotten their money, I wouldn't have had this on my bank record and I would be $130 richer. And that, right there, the $130, is what this is really all about.

Highway robbery. That is what this is. I did my best to maintain that account. This is the first time we've ever overdrawn. And it was all the financing fees that put us over. And we had to pay $130 in fees.

We don't have kids. It's just Mr. kt, me and a cat. We don't have huge medical bills, credit card bills, we're both employees (underemployed, but we have jobs.) I can't image the agony people with kids, illness in the family, unemployment and huge bills have to go through each month.

You just can't get ahead for trying, even if you are so careful, responsible and have a rough time.

[diane in sf]

10. HE SHOULD JOIN A CREDIT UNION pardon the caps

[regnaD kciN]

13. Yep...I used to be with WaMu, and switched to BECU...

...when Chase took over. Within two months, I made a major goof (transferring money to the wrong business account rather than the one I was writing checks on). Before I caught the problem, I'd written four checks on a near-zero balance. With WaMu, I would have been out $176 in overdraft fees. BECU, however, just recorded it as a negative balance (since I had enough to cover it in my personal accounts), and sent me a note reminding me to correct the problem. Total fees or other expenses: $0.00.

[Lorien]

33. Some credit unions are pulling the same crap. I racked up $449.00 in

overdraft fees in just three weeks when they changed their check deposit policy to a 13 business day hold on any check that didn't come from the company the credit union represented. It had been a three day hold in the past. I was unaware of the change and my auto debits continued on to my utilities, mortgage, ISP, etc. They're all trying to squeeze every last dime from us.

[FBaggins]

11. He's obviously far from blameless, but

if someone who does this regularly (Mierzwinski presumably) can't read the statement and tell what happened... their statements really suck (or Mierzwinski needs to find a new line of work).

[anigbrowl]

14. Maybe, maybe not

Banks are not necessarily consistent in what they do. They re-order transactions in order to bill the largest first (most likely to push you over the zero line) then add another charge for every small transaction (eg $5 at the gas station for cigarettes or something).

Now, if you get them on record saying they order transactions from largest to smallest, you can often get a fee reversal by pointing out that your deposit was larger than any of your spending (assuming you deposited cash or a check where you spent less than the $100 courtesy balance they give before it has cleared), so then they have to reverse them all and apologize. I have done this successfully but frankly the only way to be successful is to go into a branch and be aggressive about it (like a lawyer, not a thug).

It's so annoying and time consuming that since the last time it happened I just set up a bunch of automatic alerts to warn me of low balance by email etc. and forced myself to use only cash and never my debit card if my balance is under $100, just in case I make an error of mental arithmetic. The bank is not employing normal math or accounting in the way they calculate your available balance, so the only alternatives are to either use their bizarro-world system every time you make a transaction, or (safer and easier) just withdraw your available balance in cash, make sure you have no outgoing automatic payments coming up, and limit yourself to the cash in your wallet until you make your next deposit and it has cleared.

I wish I was a lawyer, because if I was not only would I be making more money (that's a joke folks), I would also be researching the legal options for a class-action lawsuit against them for this practice. I am pretty sure someone is going to file one soon, because I have no doubt the banks are begging that the forthcoming laws to re-regulate retail banking include a clause giving them immunity for past abuses, and threatening to close all low-balance accounts if they don't.

[FBaggins]

17. It really isn't so convoluted (though they certainly try)

It really wouldn't matter what order the posted things if you never spent money until it was on deposit with the bank. That was the way your father/mother and grandfather/mother did it (they have checkbooks where they accounted for every penny) and the convenience of ATMs and debit cards should never have changed that in the consumer's mind.

Your third paragraph really is the solution. You pay attention to how much money you have and you don't spend it until you know it's there. But saying that always gets critical responses that it just isn't possible/fair/reasonable. This is implied in the original article. They tell you how much he deposited over the month and how much he spent and leave you to conclude that everything should have worked out. It WOULD have worked out if those deposits all occured before his spending.

The bank can't post a little check before the deposit I make today unless I wrote that check before the deposit posted... the contract I have with the bank says that I'm not supposed to do that.

Some of the banks have started to get more rational about this... limiting fees per day and stting a minimum transaction amount so that a $2 coffee doesn't get you a $35 fee.

I read an article a month or two ago about a guy who said that he averaged about $3,000/year in such fees over the last few years. I don't know about you, but if hundreds of dollars a month isn't enough for you to keep a record of how much money you have... you have too much money.

[anigbrowl]

22. I have to disagree on one thing...

"It really wouldn't matter what order the posted things if you never spent money until it was on deposit with the bank."

That's why I call their system 'bizarro world'. The case where I went into the branch and argued (which took over an hour of verbal wrestling with the branch manager and some drone from corporate on speakerphone) arose because they charged fees for small purchases I made after making a cash deposit at an ATM where they do automatic cash counting.

The thing was, I made both the deposit and the convenience store purchases out-of-hours. So when they started up their next business day at 8am or whatever the time is, they first calculated the effect of the purchases against my previous day's closing balance (resulting in three $35 overdraft fees), then applied the amount of the cash deposit to that 'overdrawn' balance.

They gave up after claiming that the deposit I made at 6:23 pm (followed by purchases) had actually taken place at 6:23 am the following day - seriously. They were like '6:23, we know that's in the morning because our computers run on the 24 hour clock, if you had made it in the evening it would have been 18:23'. Happily, I get a receipt every time I make a deposit, so I pulled it out and lo and behold, it was timed for 18:23 and matched the transaction # the guy had just read out to me.

Loooong silence. At that point I said 'you didn't make a mistake there, you knowingly lied to me. Ms. xxx (the branch manager) is a material witness to an attempted fraud.' At which point they said 'We do not admit any wrongdoing but will refund all fees as a courtesy to you.' I know, it sounds unbelievable. I had trouble believing it myself, and thanked my lucky stars for my instinct to make the conversation happen on speakerphone.

I had an extremely illuminating conversation with the branch manager after the fees were credited back and we hung up the phone; in a nutshell, most banks have no moved the branch network into a separate company owned by the bank. Then, the bank claims they make no money from fees, which is technically true (because technically the fees are collected by the XXX bank branch network LLC' instead of 'XXX bank LLC'), while at the same time claiming to their shareholders that their profits have increased, which is also technically true (because XXX Bank books all the profit on accounts or mortgaged that come from the branch network, but all the branch operating costs are attributed to the subsidiary company).

So the people who work in the bank branches are getting screwed (almost) as much as the customers - corporate keeps all the profit from their operations, branches are paid with, and blamed for, all the unfair fees. And anyone who took a job at a bank aiming to rise up the ladder? Forget it, because people from the branch network do not get promoted to corporate jobs later. They have exactly zero input on bank policy, so even when they tell corporate the customers are angry nobody listens to them.

[FBaggins]

25. Ok

The case where I went into the branch and argued (which took over an hour of verbal wrestling with the branch manager and some drone from corporate on speakerphone) arose because they charged fees for small purchases I made after making a cash deposit at an ATM where they do automatic cash counting.

And that's a case you should have won. It's a simple system weakness. Immediate posting of cash takes an effort outside the normal process (and some banks - I don't know about this one - warn you in advance that ATM transactions can be an exception). If the transaction didn't read to them as a bank error... it was obviously close enough to justify correcting it.

But that's a pretty rare example. How many people have cash but get rid of it and then go out and spend small amounts? I mean... why waste your time putting cash in and then taking cash out? I'm not saying it doesn't happen, but it doesn't make sense to me. I remember being a teller back in the 80s and having people come through the drive-thru and deposit $200 in 20s and a bunch of checks and then ask for $60 back. "How would you like that?" - "Twenties is fine". ???


'you didn't make a mistake there, you knowingly lied to me. Ms. xxx (the branch manager) is a material witness to an attempted fraud

Funny... but likely not accurate. Sally Jane was probably making a bad assumption (they all assume the bank didn't make the error) and guessing at what might have accounted for it.

I know, it sounds unbelievable

Not really. I'd bet that SJ got a talking to right after you left for guessing at things she didn't understand, but that was the manager's best way out of the problem (to her). What Ms. xxx (seems kinky) didn't realize was that she was screwing up too. Somehow she got the impression that she should never take responsibility for errors so she tried to "fix" the problem without accepting blame. What a WASTE!!! If you're going to refund fees... you ought to get some good will out of it!

And I don't mean that cynically. I've taught customer service for years and the lesson that is always so hard to get across is that it's how you fix things when you screw up... not whether you make mistakes that matters (I mean... obviously assuming you don't just screw up all the time). I know it's hard to believe, but you actually have a better customer retention rate if you correctly deal with bad service and/or errors than if you had never made a mistake in the first place. Customers really appreciate the apology and "make it right".

Here mrs xxx was... knowing she had to give you back your money... why couldn't she just say "I can't figure out how that happened, but we clearly dropped the ball here. Of course I'll take care of it right away". Then she calls anyone a check was bounced to and apologizes and clears your name... then she follows up with you a few days later to confirm that the money is all there and make sure that you had no lasting damage to your credibility.

It's the little things that make the difference.

I can't speak to your last point. In my experience, the branch has an accounting of exactly how those fees impact the implied profitability of the branch.

[w4rma]

15. Thank you for mouthing the bank's con-artist line for everyone to read, FBaggins. (nt)

[FBaggins]

18. Lol... so the "bank's line"

is that their statements don't make any sense?

Oh wait... let me guess... even though the article admits that he spends money without any regard for whether he actually HAS any in the bank... it's a "con-artist" line to point out that he screwed up?

I'll repear what I said in my last post. If hundreds of dollars a month in fees isn't enough to get you to keep track of how much money you actually have available to spend - then you have too much money or not enough sense. That isn't a "bank's con-artist line"... it's what your mom should have taught you when you were five.


Yes... the fees are too high... and they go out of their way to make it less understandable than they should... and they are certainly out for a profit. But the conversation simply can't ignore his responsibility for his own actions (and don't you dare tell me that personal responsibility is a republicon thing) and pretend it's all someone else's fault.

[w4rma]

19. The banks are using trickery and deciet under the cover of the current law. That makes their

institutions con-artists. And it makes their spin con-artist lines.

[depakid]

20. Racketeers

Enabled by both parties.

[FBaggins]

21. Whether they are or not...

... doesn't change what I posted in the first reply. He is in no way blameless.

And frankly, the article is as deceptive. We really don't get enough information to make a judgement. Why even leave us with the clear impression that they charged a bunch of fees for transactions that posted after the deposit when it is clear that the fees were for the prior day's transactions and they've already figured that out? They tell us how much he deposited and spent over the month but never give us a clue how those balanced out. Maybe the checks were all in the first ten days and the deposits all in the last ten. THEY have the statement... WE don't... and it's clear that the author wants it that way.

Because "man can't balance checkbook that 4th graders used to learn in school" just isn't much of a story. EVERYONE has sympathy for a guy who gets 200+ dollars in fees charged for transactions that look like they happened AFTER his deposit.

After reading the story I know that some of those fees are legitimate. I suspect that SOME of them are excessive... but they don't give us anything like enough information to decide for ourselves.

[anigbrowl]

24. That does not let people of the hook, however

I've just provided an example of how the banks do try to trick their customers and are very possibly behaving criminally. BUT a) it is possible and relatively easy to protect yourself from this and b) quite a number of people do spend carelessly and rack up fees.

I have done it myself, and there are times when I have eaten the fee and not complained because it was my own damn fault. The reason I went to fight with the bank in the case I described above was because I HAD been careful about how much money was left in my checking account and I STILL got hit with a fee. That was wrong, and possibly illegal.

It does NOT mean that customers are free of responsibility to watch their account balance and avoid overdraft fees. You can argue that the fees are too large or that the bank is mean, and I agree, but if you know there is a $35 fee and you go overdrawn anyway because you weren't paying attention, it's your fault.

[FBaggins]

26. I agree.

Good post (though I don't agree on the "possibly illegal" part unless their depositor agreement makes no exceptions for cash in ATMs AND they misled you knowlingly. Ignorance on their part is more likely).

[depakid]

30. "not complained because it was my own damn fault."

That's the sucker hook that a lot of Americans fall into.

The banksters' and collection agencies' favorite "weapon."

[FBaggins]

31. Riiight...

because real people never make mistakes, right?

Or is it that they shouldn't charge you anything even when it IS your fault?

[metapunditedgy]

23. Dump Chase if you use them. They screwed me over, too. n/t

[Egnever]

27. GRRR! These fuckers just did this exact same shit to me.

Not to the extent they did it to this guy but...

I checked my balance after business hours and there was $198 in the checking account with no pending transactions showing. My check was to be direct deposited that night, the next day i checked the account to find overdraft fees waiting for me despite the fact that the balance was now over $1800.

When i went in to talk to them about it, I was refered to a "banker" by the teller, who proceded to tell me that I should be keeping a ledger of all charges on my debit card like i would with a check book. :wow: I asked him if he was serious and explained that i had checked the balance through their website. He said yes that is exactly what he does, andf he makes his wife do it too. I laughed in his face.

I am one of the people who is now a Chase customer because I used to be a WAMU customer. They just converted officialy last week and i have allready been hit with several fees and a fee for just having a savings account. Its freaking rediculous and we are presently looking for a credit union to join.

I knew when they made the Wamu people start wearing suits we were in trouble but I never immagined it was going to be so outrageous.

[TroglodyteScholar]

35. Not to be a jerk or anything, but...

...it's not only plain irresponsible not to keep a ledger, but it's supremely naive. You actually TRUST banks to A) never make mistakes (and certainly not ones in their favor, right), and B) tell you nothing but the truth about your account? Must be a nice planet you live on where it's not even your own responsibility to keep track of your spending.

[Sen. Walter Sobchak]

34. I had an "overdraft" blast last year on account with $87,000 in it

Somebody was attempting fraudulent debits from my account, their security system detected this and blocked the debits. Well that is just great, thanks bank!

Except their system couldn't differentiate between a transaction being blocked because it was fraudulent and a transaction being blocked due to insufficient funds!

The crooks attempted the debit over and over and over again and the charges just kept cascading with each attempted debit.

Their only solution to this problem was to close my account, fortunately for me a human being in their security department took charge of the matter and not a call center peon who had to follow strict rules on enforcing fees.

I haven't used a debit card since, I will only use credit cards.

[Mopar151]

36. My otherwise excellent bank has started doing this

I read somewhere that it's done by a computer program that optomizes the order transactions are posted, in order to maximize fees.

It can get worse, though. I deposited a paycheck to my account - which was pretty much at zero. The skeezy temp/payroll service that paid me (late) did it with a check on a CHICAGO bank (I'm in NH), which did not clear for several days - leaving me with several NSF charges.x( :mad: :banghead: :nuke: