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The Insanity of Bank Overdraft Fees
Happy New Year? It would be a lot happier if I had the almost $750 that my bank charged me in the last seven months.
How much did your bank hit you for last year?
One of the insane things I have had to deal with, as did many others this past year, is the fact that banks have been altering their fee schedules in an effort to make more money from the consumer via fees as the feel the economic crunch of their investments waning.
One would think that with the billions of dollars in government bailouts being doled out to the institutions that tell us they are taking “care of” our money, that they would be assessing less fees, as a means of incentives to keep associations with consumers intact.
Instead, they are boosting maintenance fees, fees for credit card balance transfers, fees for money market account transactions, fees for low balances, overdrafts, and lots of other situations that are unfortunately indicative of a faltering economy.
In July of 2009, Marshall Eckblad reports that “Overdraft fees, which are charged to customers who run negative balance, drove more than $30 billion in revenue to banks last year alone.” The Wall Street Journal also recently reported another increase in bank fees associated with Check Cards.
In my personal overdraft disputes with banks, I have discovered a few things. First, it is literally impossible to know how much money you have in the bank. This becomes even more apparent and disheartening, when your bank tells you they don’t know either becuase it depends on merchant processes. Additionally, I have been told on several occasions different procedures for daily processing and have discovered different ways that my transactions have been processed. So just when you think you’ve got a process memorized; SURPRISE!!
Second, trying to keep track of your money during the weekend is also a nightmare unless you have a banker walking around with you with a calculator and direct access to the banks database, which is virtually impossible. The problems with the weekend stem from the fact that any transactions occurring after 12 midnight on Thursday are not processed until 12 midnight on Monday. That is if the merchant decides to decides to claim the money from your transactions within the weekend that you made a purchase.
Third, you cannot depend on having the bank will process your transactions in a consistent manner, whichmeans that if the merchant doesn’t claim the money and you think they have when you check your balance you will see more than you really have but think that is what you actually have. This is not just due to the bank but also based on the new Check 21 system that allows certain transactions to be transformed into different electronic transactions. So now when you write a check after 5 PM on the Friday you are paid, the processing occurs electronically sometimes before the money from your direct deposit is finalized. An who thought that was good from the consumer’s standpoint? This last nail in the coffin, which buries the consumer’s ability to be in control of the little money that many of them have, is made even worse when your bank tells you it is your fault because you are not efficiently keeping a transaction register.
All of this profit-based change is causing a heck of a lot of confusion and unfortunately the consumer is being hit hard in the pocket as a result with more and more fees because of it.
This video documentary I found on YouTube offers a bit of insight into the problem while offering a rather wonderful although invested solution.
Let me hear what you think about it.
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