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Dutchess_III's avatar

Is what my bank did legal?

Asked by Dutchess_III (46937points) June 20th, 2017

I can’t imagine them doing anything illegal, but this is baffling.

We have an over draft privilege (ODP) of $750. Occasionally I lean on it short term for whatever reason. It’s pretty much like getting a $750 loan with an interest of $30, which is the OD charge. However, it has to be covered with the next deposit, of course.

Our bank processing hours run from 4 pm until 4 pm the next day.

I had reason to know I was going to lean on it last Friday. I checked the account on Thursday, before 4, and we were fine. There were 5 transactions pending, dated Thursday the 15th, from when Rick was in Springfield on business. They were covered.
Two of them were to McDonalds, with some ID numbers, and specified that they occurred in Springfield. It showed we had a balance of about $5.00.

On Friday, the 16th, before 4:00 I checked the account again, same thing. Those five SHOULD have processed either on Thursday after 4:00 or on Friday, after 4:00, at the latest.

After 4:00 on Friday I withdrew $300 in cash.

On Saturday I checked the accounts and the 5 little ones still hadn’t processed. I took a screen shot of it, showing the balances to the right of each transactions showing a positive balance. The last item on the list was the $300, showing a balance after it of -$295.

Today I checked the account and there were overdraft charges against all 6 of those transactions! The 5 smaller ones had changed position and showed coming out before the $300 AND the dates all changed to the 19th, which was yesterday, Monday!

I looked carefully, and compared it to the screen print. The amounts were exactly the same, down to the penny. The ID numbers on the McD’s transactions were exactly the same, but the specification that they were in Springfield Mo had disappeared.

They can’t just randomly change dates and order of withdrawals, can they?
And shouldn’t the dates be the date the transactions were made?

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21 Answers

zenvelo's avatar

Banks routinely process the largest transaction first. This means the largest one is covered by your balance. It also means you get dinged for each of the smallest transactions as overdrafts.

The delay in processing is because the vendor has not submitted the transaction for processing yet, even though they have told your bank they have a debit heading your way.

All of it is legal. Although the processing the largest transaction which maximizes your overdraft charges has been a bone of contention for consumer advocates for a long time. The CFPB has worked on it but not made headway, and with Congress and the Administration gutting the CFPB means it won’t change any time soon.

SavoirFaire's avatar

Yes, it’s legal. But assuming this is the first time it’s happened, they’ll almost certainly reverse it if you complain in person. They know it’s a controversial practice, and it’s bad business to be overly insistent about the policy. Just don’t do it again. They keep records of every complaint and review them any time you make a new complaint. You can’t plead ignorance twice.

Dutchess_III's avatar

Well, I sent a screen shot of the account I took on Saturday, and my banker said it there were any OD charges she’d reverse them, except for 1.

How the hell am I supposed to keep an eye on my account when shit changes like that @SavoirFaire, and I can’t trust what I’m seeing? They can’t just change the dates!

Dutchess_III's avatar

The McDonald’s transactions are puzzling, especially. You know that huge chain processes their books every single day.

SavoirFaire's avatar

@Dutchess_III I completely agree. Just because something is legal doesn’t mean it’s right. That’s why, as @zenvelo said, the practice has been a bone of contention for consumer advocates for a long time. But at the same time, you can understand why the bank isn’t going to let you off the hook a second time. From their perspective, you have now been adequately informed and are therefore capable of keeping an eye on your account (since you can now do so while bearing in mind the information that they will not use the exact time of the transaction to determine which charges are processed first).

Zaku's avatar

It’s a nasty situation, and part of the growing exploitation of people who don’t pay close enough attention to notice. If you notice and complain, hopefully you can get it reversed. Meanwhile, many others are not noticing and are getting charged piles of money for trivial charges.

As for what to do, I’d see if you can get a line of credit (HELOC or something) or somehow try to keep a buffer rather than trying to use the (clearly problematic) overdraft “privilege”. (Sounds to me like it’s more like their priviledge to charge you multiple overdraft fees if/when they can get away with it.)

Darth_Algar's avatar

Lesson here: do not assume that a charge has processed until you see that it has. Don’t trust that “pending” shit.

Dutchess_III's avatar

That’s just it, I WAS paying close enough attention. How much closer attention could I have paid? I mean, all of those transactions showed that they came against my balance on Thursday, showing a balance of $5.00, which is the first thing I see when I pull the accounts up. They had already debited from my account When I took that $300 out Friday evening, it then showed a balance of -$295. But today the account read -$445. That’s the $300 plus the $150 in overdraft charges. On transactions that had already debited.

Darth_Algar's avatar

I didn’t say you weren’t paying attention. I said don’t trust when it says “pending”.

Dutchess_III's avatar

Sry. I should have specified I was talking to @Zaku on that. Editing. Dang. Since when did the edit window change to 30 seconds?

SavoirFaire's avatar

@Dutchess_III The editing window hasn’t changed. Hit refresh until you see the editing link again.

The issue is that Fluther runs on two separate servers, and you can be switched back and forth between them. If their clocks get out of sync, one might register the editing window as having passed while the other one still registers it as open. I’ll see what I can do about getting the clocks back in sync.

Dutchess_III's avatar

Too late now even for both clocks. I will remember that tho. Thanks.

stanleybmanly's avatar

Yeah you’ve been hit. Banks are notoriously chickenshit about this. It’s a policy aimed squarely at the defenseless and I despise them thoroughly for it. But I agree that if you bitch, they will reverse the fees as long as you have a clean record. It’s unsettling to hear that you’re living so close to the wire. It’s too expensive being poor! Can you bank through a credit union?

Dutchess_III's avatar

What difference would a credit union make @stanleybmanly?

Oh, we’re not poor! It’s just a bad moment. Helping my daughter out hit pretty hard!

Zaku's avatar

@Dutchess_III Yeah, I agree with you! What I meant was, because you paid enough attention after they claimed a bonanza of fees, you had the opportunity to call and have a teller reverse most of them. By contrast, the people who don’t notice or don’t think to ask, or who don’t think they can/should ask to have the charges reversed, may be getting charged hundreds of dollars in extra fees.

Dutchess_III's avatar

I hit her up before the charges hit just in case they did. I’m all over my accounts! “What is that $2.50 for?????”

stanleybmanly's avatar

@Dutchess III credit unions are less incentivized to rob their membership, and I believe they charge lower fees all around.

Dutchess_III's avatar

I’ll look into it. I love mymy bank tho.

ARE_you_kidding_me's avatar

Credit unions pull that crap too but are usually a bit more receptive when you complain.

Dutchess_III's avatar

Just got got an email. They refunded $90.

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