Bank Of America Bank of America ripoff On-Line Available Balance Overdraft Scam Washington, District of Columbia

If Steve knew how to run a check register (yea, the old fashioned kind you actually write down transactions in) rather than depending on some fancy internet based system he would never be overdrawn, would he? Yes, he probably would be overdrawn anyhow because he can't manage money.

It amazes me the number of people who complain about their banks websites "screwing" them simply because they cannot mange their money!! Overdrawn again....must be the banks fault. The banks website screwed me. The order in which the bank posts transactions screwed me. The bank...the bank. On and on.

Keep more money in your account than you spend and guess what....NO PROBLEMS. What ever happened to this concept? Try cash Steve, it's your best bet.

Bank of America offers a Visa check-card that allows ATM withdrawals/deposits using bank machines and point-of-sale purchases with the Visa functionality of the card. All of these transactions are tied directly to a checking account with a cash balance (not a credit line).

The bank's web site, www.bankofamerica.com, displays an "Available Balance" on the account, along with "pending transactions" and "posted transactions." As a misleading tactic, the web site will often list very recent purchases in the "pending transactions" section, but the amounts are not subtracted yet from the "Available Balance" figure.

A typical consumer would think that since the bank "knows" about the transaction in the pendings list, surely the amount is subtracted from the "Available Balance." Normal credit cards subtract purchase amounts instantly from the "Available Credit."

Also, the "Available Balance" is not always updated "up to minute" as the banks advertising and web site format leads customers to believe. Surely, there is something in fine print to cover the Bank's ass.

Bank of America has even further supported this notion of instaneous balance transactions by airing a television commerical in which a customer charges a cup of coffe in a cafe. The coffee drinker's "friend" in the cafe is using a wireless laptop at a table while the customer charges the cup of coffee on the card. When the customer returns to the table, his friend is viewing the Bank of America on-line web site and is amazed that the bank has already listed the transaction on the web site.

Surely the bank "knows" about the transaction. Why wouldn't they update the available balance at that point in time? Well, of course, it's to trick the customer! The television commercial mood further evidences Bank of America's intention to lead customers to believe on-line account activity, and therefore balances, are instantaneously updated.

For customers who have a balance in their accounts that is approaching the zero mark, Bank of America's system is designed to confuse and trick consumers "faster than the eye" to leverage hefty and multiple $34 overdraft fees. Customers believe they can make additional purchases because the balance is displayed as higher than it should be because known pending transactions list on the web page are not posted, are pending, but aren't subtracted from the available balance. Note that these transactions are often listed in the "pending" section, leading users to believe they are reflectd in the available balance.

Given the scenario above, customers continue to make minor purchases for amounts such as $20, $10, etc. knowing they are close to zero, but thinking there is still "enough" money in the account as reflect on the "Available Balance". Over the next day or so, Bank of America subtracts amounts in descending order rather than transaction time to ensure the maximization of their own profits. Overdraft fees are currently $34 for each transaction. A few minor transactinos like a cup of coffee, lunch, gas, etc. in a given "gray period" day can end up costing a customer up to five $34 fess in a single day, or $170. For example, if you purchased a coffee for $3.00, sandwich at deli for $6.50, and filled your tank up with $30 in gas, but your true balance was only $29, they will subtract the $30 first so that three overdraft fees apply rather than a single one. Advocates of the bank claim they do this to help with mortgage payments and car payments. That is not the fact. They don't care about their consumers.

If you are being ripped of like I have been, please take action, complain, and cancel your business with Bank of America. They have now merged with Fleet bank which has practiced very similar tactics with credit card payment receipts and lost a class action lawsuit. I received a $75 check last summer from the Fleet lawsuit.

With regard to the insidious comment regarding a check register, yes, I know how to use a check register. In fact, in 20 years of banking with a standard checking account, I never bounced a check a single time.

However, the card associated with this account leads consumers to believe that point-of-sale purchases are instantly reflected in the balance of the account. Their cafe commerical example is a clear example of this. The bank uses trickery on purpose to charge excessive fees to profit themselves.

The card is marketed as a convenient way to instantly access your cash account; however, they don't update the account balance correctly on-line. If the bank "knows" about a pending transaction instantly, they surely know the amount also to deduct. Standard credit cards to this instantly with the "avaiable credit".

Keep your "money management" advice to yourself. This is clearly not the issue.

A debit/check card is supposed to be a more conventient way to pay than writing a check. It STILL TAKES MONEY OUT OF AN ACCOUNT!!! Why can't you grasp this? Who cares if it comes out instantly or a week later?? If you run a checking account register, keep more money in the account than you spend. SIMPLE CONCEPT.

If you write a check or use a card who cares? DON'T WRITE CHECKS OR USE A CHECK CARD IF YOU DON'T HAVE THE MONEY!!

Sure banks do everything they can to increase revenue and maximize profits. I do the same in my business. In the old days, most all checking accounts had a monthy fee. Today, most banks offer free checking. Why? Because the idiots who continue to take more out than they have rack up fees which generate profits for banks!!! This allows responsible people to benefit from free checking.

Get a grasp Steve, it's called PERSONAL RESPONSIBILITY!!!

I feel your pain and have been there myself. I'm no fan of B of A and I have been abused by them and others regarding debt/visa cards. However, I don't think you will find things much different at another bank.

There are some types of transactions that involve a delay in having an accurate balance. (I don't remember the term) Typically this is when the final total price is not known when the transaction is initiated. These are processed very differently than a standard purchase at a cash register.

Moreover, debit/Visas are treated differently than “real” Visa credit cards on these transactions. I'll come back to this issue later.

For instance; in a restaurant when you pay your bill, your card is rung up for the food total and the system “holds” that amount plus something like 15%. You then add your tip which could be more or less than 15%; or nothing if you leave cash tip. Most restaurants process the final totals in one “Batch” at the end of the day. Often this happens after midnight, and might not get reported to your bank until the second day after your meal.

Your “available balance” represents the “estimated” total of your check and the bank does not know the actual final total until the restaurant reports it.

Another common situation where this happens is at the gas pump. When you use a card at the pump the system initiates a small transaction to establish that it is a valid card. Often this transaction will “Hold” just $1. Then at the end of the day (or sometimes not until Monday morning for the entire weekends' sales) the system “Batch” processes all of the transaction totals. So you might not pay for gas pumped on Friday until Tuesday.

There is a flaw in this system in that it exposes the station to getting “bounced” debt card transactions and this can be high in cases of fraud. There was a ring of scammers that would get cash out of stolen credit/debt cards by abusing this system. They would stand by the pumps and tell a sad story on why they needed cash fast. Then they would offer to let you pump $25 worth of gas on their card for $20 cash from you. A debt card with even a small balance like $20 could be used 20 times.

To protect themselves, some stations now “hold” $50 during the initial card verification check. If you only pump $10 the system will refund you the $40 balance when the batch is processed. Unfortunately, you might not get the $40 the station “held” on Friday until Tuesday. This can be avoided by paying inside with your debt/visa card as it becomes a standard transaction because the total is known and reported to the bank at the initial contact.

Hotels and car rental agencies often “hold” hundreds of dollars over your estimated bill to cover room charges, phone calls, gas, late fees and damages. It has coused so much friction that most rental agencies and many hotels do not accept debit/visa cards.

The reason Debit/Visas are treated differently than “real” credit cards is because the credit card issuer has performed a credit check and has established that you are credit worthy before giving you the “real” credit card. Banks and other debit/visa issuing institutions usually do not as it is your money not theirs that is on the card.

With a “real” credit card, the issuer does not apply any temporary “hold” amounts to the account. For instance; you have just $100 of your credit limit left and use that credit card to check into a $79 / night hotel. The hotel will run your card and estimate or “hold” something like $150. As long as you complete the check out the next day for less than $100, the fact that the hotel temporarily had you over your limit is transparent to you. Since you are a credit customer, the credit card company is willing to assume some risk above your limit.

Try to check into the same hotel with a debit/visa and you are likely to be “declined” at cheek in because this card issuer usually will not accept any exposure above your cash balance. ( FYI. Ask at check in what will be “Held” they will tell you. They will often reduce it if you ask.)

I have a PayPal Debit/MC. The online statement has so much more detail than any other of my debit cards which look similar to my “real” credit card statements. There is so much detail that it is very confusing and I can appreciate why most banks summarize the statement.

With PayPal they list each phase of every transaction in chronological order and NOT grouped by transaction. As an example, I have $100 in the account and I spend $70 over three transactions on June 1.

I'll see the following:

June 1. Fed Ex 10.00

balance 90.00
June 1. Shell 1.00

balance 89.00
June 1. Chili's 29.47

balance 59.53
June 2. Shell 19.00

balance 40.53
June 3. Chili's -29.47

balance 70.00
June 3. Chili's 35.00

balance 35.00
June 8. FedEx 15.00

balance 20.00
June 9. FedEx -10.00

balance 30.00

You can imagine how confusing this is. It is especially so when logging in daily to check my balance.

This day I logged into my FedEx online account to buy and print a label to ship a package. The package cost 15.00 to ship. On my way to drop the package I bought $20 gas and paid at the pump. That evening my wife and I spent $35.00 for diner at Chili's.

FedEx always bills $10 per package on the day you pay for it if you buy it online. Once a week they charge you the actual shipping cost for all packages shipped the previous week (individually). Then they refund the original $10. Sometimes the refund happens the same day sometimes the next. I'll often ship 3-5 packages a day. Reconcile that…ARGH. I have not paid FedEx with a credit card but I expect that it would show as one $15.00 charge on June 9 on the statement.

Most restaurant transactions show this way instead of how you would expect with one line for the food than another with the tip. I often use credit cards in restaurants and know this would show only one $35 charge on June 3. I already covered the gas thing but some stations do refund the $1 and bill the $20.

The process used in the previous response is mostly correct. Systems automatically will charge more then the billed amount for verification purposes. Companies can't very well let you just charge money without using something to verify your check/debit card with..so they charge a small amount or larger amount.

Gas stations used to "charge" $1.00 to your card to verify the card, and then that night at around midnight, the "pending" charge will be removed. You are not actually charged an extra dollar.

The $50 pre-authorization that is now charged is to protect customers from fraud. It is released from your account as soon as the real amount is sent by computer to the bank system and is not held on your account for days as previously stated in the other response. This is done within minutes of each other.

Restaurant's computers automatically add an additional 15%-20% on your bill to allow for tip. Don't complain to the restaurant, cause most employees don't even know this. They blame it on the bank but don't realize that its the computer system that actually added more to the amount they put in the little machine. The pre-approval or pre-authorized amount is then removed from your account within 24 hours (on a weekday or business day, not over the weekend).

Then the actual amount of your bill is processed when the bank receives the sales slip which can be days later. Most people are confused by the appearing and then disappearing transactions on their online banking account.

They assume that because the charge shows up on the online system...it automatically deducts it from their funds from then on and then they can trust the available balance shown to tell them how much money they have.

Well, since the "pending" transactions drop off within 24 hours, then it may seem like you have more money then you actually do. The reason you still need to keep a very accurate checkbook register is to ensure you know how much money you actually have.

The online system is to HELP you, not manage your money FOR you. If you don't want the hassle of keeping up with your money, then you should carry cash and not have a checking account.

I use the online system to go over my transactions for the day. I don't always write down the purchases i made at the exact time i made them....and i manage the funds for both me and my husband....so its VERY helpful for me to be able to look online and see what purchases he made using the check/debit card.

The bank of america commercial that shows the guy buying coffee and then seeing it online is ABSOLUTELY TRUE. You make a purchase using your check card, then you can go online and see the purchase "pending" to your account. And it will deduct it from your available balance.

Now the guy complaining about it doesn't deduct from your available balance may be confused about what an available balance is. First I need to explain your "posted" balance.

The posted balance is what the bank has actually deducted from your account and what has been processed. For example,your handwritten checks will never show in your pending transactions, they will only be deducted from your account when they have actually posted to the account.

Now, the available balance takes your previous night's posted balance and then deducts any pending transactions you make that day. The available balance is in NO WAY your ACTUAL balance.

It is only showing you the transaction you made THAT day. The pending transactions are taken off each night and then actually posted to your account for the real amount once the bank receives the paperwork. This can take days depending on how soon the merchant sends in the paperwork. This confuses a lot of people who do not keep running checkbook registers.

You MUST check your transactions every day. I check mine several times a day. And have NEVER had a problem. The people that have overdraft fees are people that either are confused by how the online system works, or take for granted that the online system will TELL them how much money they actually have. There is not a bank out there that will manage your money for you. The bank can only deduct everything when it is processed. You are essentially expecting the bank to be your personal financial advisor.

The online system is like an "Inside look" into your account. Before online systems, you spent your money using a debit card, then put it in your little register so you knew how much money you had. The banks had the "available balance" the entire time, only you..the consumer could not see it.

Now the banks are letting you see the general process they use to determine if you can make that next purchase using your debit card. Do not blame the bank for doing their job.

They provide you with a service and services cost money to provide. You complain cause you overdraft your account, yet it would not happen if you actually wrote down all your transactions. Overdrafts only occur when the consumer overspends their money. That is never the banks fault.

They can only charge you up to five overdraft fees per day for purchases that overdraw your account. This is how they make some money... by people that use money they don't have. When you overdraft, you are basically borrowing money from the bank to pay for your purchases. Cash advances cost a lot more then $34 bucks ($34.00 is the new Overdraft fee amount IF you have overdrafted your account more then six times!!). The bank has tiered pricing regarding overdraft fees and each day you overdraft your account counts as an "occurence".

For repeat offenders, they are charged more per overdraft. If you only have had only one to two days/occurences that you have overdrafted your account, you will only be charged $19 per overdraft on those days. If you overdraft 3-5 days/occurences, you will be charged $31 per overdraft on those days. And if you have overdrafted your account 6 or more times, you will be charged $34 dollars per overdraft. Now when i say days or occurences... i don't mean the amount of days your account has remained overdrawn or the amount of items that overdrew your account, i mean each day that you had something new post to your account, and it overdrew your balance that counts as one occurence.

You may have 10 items overdraft your account in one day, but you will only be charged up to five fees and it will only count as one occurence. And you will be charged the same amount for the 5 fees for that day. So the guy complaining about $34.00 fees has obviously overdrafted his account 6 times or more.

If you can't keep up with your account, then just use cash. You can't overspend whats not there if you use cash.

Yes, the ATM/check cards sometimes only temporarily subtract $1.00 for gasonline purchases and unexact amounts at restaraunts, I knew that. The restaraunt hold amounts are usually 95% accurate.

However, I made 4 purchases on a Friday at places like a barber, snack bar, coffee shop, and music store. Each of these amounts was fully known at the point of sale purchase. On Saturday when I checked the on-line web site it displayed "On-Line Available Balance $96.50" and listed the exact amount of ALL FOUR TRANSACTIONS in the "Pending" section with a message "includes amounts subject to any holds." In addition, there is a pop-up box with a note beside it that displays "Your available balance reflects all posted transactions, electronic transactions (ATM) performed today and any pending credits, holds or point-of-sale purchases that Bank of America has been notified of." Well, obviously the bank had been notified of my 4 transactions and the amounts were listed! However, I withdrew $50 on Sunday using the ATM card. Next, on Monday, it turned out the 4 transactions were not reflected in the $96.50 balance nor were similar purchases from prior days. Suddenly, on Monday, the bank had friggin field day posting everything at once in large to small amounts to generate FOUR overdraft fees of $34.00 each, totalling $136.00 ! ! What a SCAM.

Through much profanity and annoyance to bank staff, they have refunded $68 to me. Still $68 more dollars to go.

For all you boneheads trying to tell me how to manage my money, buzz off! I am 35 years old and have a net worth and salary that is in the top 3% for my age. All of which I earned on my own and didn't inheret a cent. I earned it through hard work and education. No, I don't keep significant amounts of money in checking accounts, I use it only to pay bills. Also, I was closely watching the account to ensure I didn't overdraft it before my next paycheck on Tuesday. It was the banks SCAM that took my money.

Let's face it: the bank has a bunch of fancy lawyers and finance experts working together to scam people who are relying on the convenience of modern-day technology to keep us up-to-date on balances. These transactions are not checks in the mail floating for several days. They are immediate purchases. Believe me, the banks can update balances immediately with these point-of-sale purchases. You'd have to be an idiot to think that today's technology can't do this!

And to the person who justified this scam because it is a good money generator for a business is a sad excuse for a business owner! Shame, shame! It's people like you who con others to your own benefit. The end does not justify the means. You need to seriously reform your ethical and moral process Buster !

Ta ta kiddies! Love ya!

I see you, just like all of the other complaints against Bank of America end of with "canned" responses that Bank of America hires people to write as comments on these posts. My message to you is of support. You like millions of other people are being scammed by a slack organization with a bunch of CEO executives that are laughing at all of us as they spend our money on the golf courses and the country clubs. Nothing we write on here or anywhere else will matter to them. This is how it works.

Unlike many banks that will deny access to an ATM card to people with financial instability or poor credit, Bank of America makes their money by allowing these accounts. Knowing that the account holder will skate on the edge of a -0- balance, they encourage the holder to use its on-line access to keep there balance information up-to date. They will place a hold on a transaction so it does not appear on their on-line statement then they play the waiting game. Once BOA computer system detects that the balance will go into overdraft they post whatever bank charges they can muster up then they post the hold transaction. (they cannot charge overdraft fees on a bank charge so they will always post their bank charges first). These charges can leave the account holder with 2 or 3 overdraft charges.

They will change POS transaction dates and do everything they can to throw off anyone who uses the on-line banking to balance their checkbook. The people who post rebuttals on here are instructed on how to rebute or "comment" . It is a shame that an organization can so blatantly take advantage of millions of people. It is sad and sickening. Whats worse is that they have people write rebuttal statements in attempts to make the account holders feel even worse, like they need to feel worse than they already do having been taken advantage of so easily. Some of the comments that are posted are incredibly cruel. Trying to make the person who filed a complaint feel like they are the bottom of the barrel for allowing their account balance to get so low. It is disgusting.

Finally a class-action lawsuit resulted in a $78 refund to customers who have been ripped off by Bank of America stealing from its customers. Justice has prevailed but I still am not getting everything back.