bank fees question

[hipchickie]

This situation happened, though I am using easier (round) #'s to make it less confusing. I was hoping someone knew if this is correct, and quite frankly, if it is, who to complain to (senator/congress person? Federal banking?)

I had $1000 in my business bank account. I had $1000 available in my overdraft line. On Monday, 5 checks cleared, totalling $1001. The bank paid all the checks, but charged me 5 overdraft fees, even though there was obviously enough money on my bank account for 4 checks, and enough in my overdraft to cover the $1 deficit for the 5th. They put the checking account in a -$1, (then another -$32 for each of the 5 checks) and did not take anything out of the overdraft line.

When we brought this up to the bank, they said that the law is that they have to group all the checks together into one total, and if there is not enough money on the bank account for that full total, they have to take that full total to the overdraft line. If there is not enough money for the full total in the overdraft, then every check will be hit with an overdraft fee.

It seems ridiculous, is it true? The part about it being law in particular seems unbelievable.

 

[elwise1966]

I have never heard of a bank doing this before. In my opinion, each check is a separate transaction and should be treated as such.
Reminds me of banks that were "reordering" checks that cleared during a day with the largest $ first to force the account into more overdraft fees.

 

[groovygirl927]

This does not sound right. I would ask to speak to someone else about this. If they still don't want to resolve maybe change to another bank. When I canceled my account with a bank who I had direct deposit with banked with for years never had a bounced check and when I applied for a loan they gave me a high interest rate and I was able to get a much lower one from another bank they wanted to try to work with me but I already got a better loan somewhere else so I still left them.

but they may want to fix the situation to keep you at their bank.

 

[poohfriend77]

I don't know if it's "legal," but it sure is stinky customer service! I would probably VERY sweetly and patiently talk to anyone I could at the bank to ask if there is anything they can do. Was it really only $1 that you were over, or was that for demonstration purposes? Seriously, if this is the first time you have used the overdraft service, and if you have multiple accounts (personal, business, checking, savings, etc.), I'd ask if they could let reverse the charges this one time. Try that before complaining to anyone.

If you don't get anywhere with the sugar, then I'd start complaining and close ALL of my accounts at that bank. My bank offers the overdraft protection for free if you have checking and savings accounts.

 

[Dismom55]

Really sounds hinky to me, I would go up the chain of command at the bank, no satisfaction, I would switch banks. Only one check bounced not all five therefore they are wrong simply wrong to charge you like they did. I would fight tooth and nail until I was happy with the outcome.

 

[simplesimon]

Call the consumers affairs office at the state attorney office.

They can tell you if that is legal or not. If not file a complaint.

 

[chris31997]

Frank/Dodd Act pass Congrass this year. It affects banking and overdrafts. How this applies to you . We just go a notice in the mail about it. I would talk with someone in the bank. I would keep talking with someone higher up until you get an answer you like or you hit the 'ceiling". It may mean moving to another bank.

 

[hipchickie]

Was it really only $1 that you were over, or was that for demonstration purposes?

If you don't get anywhere with the sugar, then I'd start complaining and close ALL of my accounts at that bank. My bank offers the overdraft protection for free if you have checking and savings accounts.

that was for demonstration purposes - the amt. over was around $50 (still plenty in the overdraft) but the amt of checks presented was higher too, and the balance was higher. Proportionally it is about the same.

We sent them a msg asking them to refund, but I find the whole situation odd.
Between business and personal accounts we have 10 accounts with them. I want to support them because they are a small local bank, but this is not making me feel warm and fuzzy towards them

 

[Janepod]

It is legal. It sucks, but it's legal. http://consumerist.com/2010/05/top-x-legal-ripoffs.html

"Cascading overdraft fees"

 

[cricketgirl]

Just curious was this wells Fargo? They did the same thing to us several years back, over $0.12. Ended up costing us almost $400 in over draft fees. because they said they had to pay each then process them so they hit us twice. we never got anywhere with anyone. Left wells fargo and haven't looked back since.

 

[Thumper_Man]

In our state, our State Regulation and Licensing Department has a division that oversees Financial Institutions for our state. Check and see if you have something similar in your state. Call them and ask them what the exact law is, and if the bank has any right to group them together like that. To me, they should treat each check as a separate transaction. May also want to ask them what's the point in overdraft protection if they're not going to utilize it. I agree with others, if they can't resolve your situation, then I would switch banks.

 

[hipchickie]

Thanks everyone - they emailed me back and said that they would refund 3.
I told them that even though I didn't feel I should pay any due to the overdraft line, I would like 4 back. And I asked them to refer me to the law that they say forces them to do this so that I can follow up with the correct representative. I will let you know what they say!

 

[disny_luvr]

Just curious was this wells Fargo? They did the same thing to us several years back, over $0.12. Ended up costing us almost $400 in over draft fees. because they said they had to pay each then process them so they hit us twice. we never got anywhere with anyone. Left wells fargo and haven't looked back since.

I have no idea if this was Wells Fargo as I am not the OP, but as I was reading the previous posts, I, too, was wondering the same thing. We had quite a few problems with WF in the past and most of them were silly mistakes that they made that they gave us the run-around in fixing. We left too and haven't looked back either. Just seeing the local branches, billboards, and TV commercials makes me cringe.

 

[scrapquitler]

This situation happened, though I am using easier (round) #'s to make it less confusing. I was hoping someone knew if this is correct, and quite frankly, if it is, who to complain to (senator/congress person? Federal banking?)

I had $1000 in my business bank account. I had $1000 available in my overdraft line. On Monday, 5 checks cleared, totalling $1001. The bank paid all the checks, but charged me 5 overdraft fees, even though there was obviously enough money on my bank account for 4 checks, and enough in my overdraft to cover the $1 deficit for the 5th. They put the checking account in a -$1, (then another -$32 for each of the 5 checks) and did not take anything out of the overdraft line.

When we brought this up to the bank, they said that the law is that they have to group all the checks together into one total, and if there is not enough money on the bank account for that full total, they have to take that full total to the overdraft line. If there is not enough money for the full total in the overdraft, then every check will be hit with an overdraft fee.

It seems ridiculous, is it true? The part about it being law in particular seems unbelievable.

I don't know, but I can tell you based on my experiences, Business Accounts operate under a different set of rules than personal accounts. So the way that the bank handles your personal account won't necessarily be the same way it handles your business account.