You see, you are a prime TARGET for these rip off tactics and policies being a financially struggling student. Anyone these days who keeps a low balance and has an overdraft is subject to getting fleeced by banks.
Now you know that you expected an overdraft fee for the school loan and would have paid that fee with no complaint since you realize it was your fault...but why then were you hit with FIVE overdrafts fees which will financially devastate you??
...here is why.., the bank policies are cleverly and INTENTIONALLY designed to overcharge you in the event of a single overdraft. What they have in place is a tactic in which by re-sequencing the times of transactions, they can and do charge overdraft fees for transactions that did have the funds at the time. How do they get away with that you might ask???
..because they have deceptively used outdated policies, one of which is designed to protect large check transactions such as a mortgage payment by processing your transactions from highest to lowest..instead of the ethical, sensible way which would be in the order they are received. However, since ALL the transactions were covered regardless, and no policies were actually protecting a mortgage payment..what has this policy done to help or protect you in any way? Nothing...all it did was line the banks pockets with fees. This practice as well as other ways the banks "process" transactions is a set up for ANY checking account customer that overdrafts..for any reason, to be hit up with additional and excessive fees beyond what is warranted.
There are lawsuits in effect that should help you get some money back..but do not expect it to be all since most will go to the lawyers. But if the lawsuits do anything to help change these policies so no longer will students and others like yourself get ripped off by a bank they thought they could trust...I hope the lawyers make a MINT.
Some banks have already decided to change some policies on their own..most likely due to the plethora of complaints, exposure and negative press by the media, pressure from congress, and never ending lawsuits. As a matter of fact, the Fed has already began to step in...
WASHINGTON (CNNMoney.com) -- The Federal Reserve on Thursday
released a new rule to prohibit banks from automatically enrolling
customers in overdraft protection programs, which charge fees when
consumers spend more than they have.
Starting on July 1, 2010,
all banks will have to ask their customers to opt in to overdraft
protection plans for ATM and most debit card transactions.
Now this step is a still far cry from a cure all...and customers are still responsible for check and ACH payments which is fair, but at least this policy change (which believe me the banks are not happy about) can prevent the proverbial $35.00 cup of coffee and other similar situations that have caused such an outrage by banking debit card users who were not intentionally trying to overdraft, but failed to keep accurate track (mistake) or other situations such as merchant holds and certain bars/restaurants may do which can cause an inadvertent overdraft(s), and amass many fees unnecessarily.
Now of course you need to keep track as best you can by using a register and watching the account to the penny..since something has happened the last few years (the banks FAILED) which has caused them to resort to these deceptive, unethical and manipulative tactics as their new profit center..which feeds mainly off the most vulnerable of USA citizens such as the elderly, the poor, and students. But MILLIONS of bank customers have been effected according to the FDIC report.
Now at the end of your report when you say the banker might as well just put a gun to your head..at least that would give you a choice. In this case the bank just took your money..no gun needed.
Here is some info on a current lawsuit if interested...Your bank just so happens to be listed
October 20, 2009 11:00 AM Eastern Daylight Time
MIAMI--(EON: Enhanced Online News)--Marking a substantial step forward in litigation over the banking industry’s abusive and excessive overdraft fee policies and practices, plaintiffs' counsel announced that bank customers have filed a series of nationwide class action lawsuits against Bank of America, Wachovia, U.S. Bank, JPMorgan Chase and Citibank. The complaints were filed in the United States District Court for the Southern District of Florida in Miami, where all federal lawsuits brought against the banking industry for abusive overdraft fees have been coordinated before the Honorable James Lawrence King.
"The collection of excessive overdraft fees, usually around $35 per transaction, impacts millions of Americans each year and has become a multibillion-dollar profit center for the banks," explained lead plaintiffs’ counsel Bruce S. Rogow. "In many instances, these overdraft fees cost customers hundreds of dollars in a matter of days, or even hours, when they may be overdrawn by only a few dollars. Charging a $35 overdraft fee when a college student uses her debit card to buy a cup of coffee is unconscionable."
How Bank "Overdraft Protection" Works and Why the Abusive Collection of Overdraft Fees is a National Concern
Today, when customers open checking accounts, banks provide debit cards for the withdrawal of cash from ATM machines and the purchase of goods and services. Many bank customers are not aware that as part of the process of obtaining the debit card, banks automatically enroll their customers in "overdraft protection." The overdraft protection kicks in if the customer spends more than he or she has in the account to cover the purchase, up to a limit of a few hundred dollars.
Banks could simply decline to honor customer ATM or point-of-sale transactions if the account lacks sufficient funds, or could warn customers that if they go through with the transaction an overdraft fee will be assessed. In fact, until a few years ago, most banks simply declined debit transactions that would overdraw an account.
"Banks do not record charges and purchases on ATM or debit cards in the order they actually occur," stated plaintiffs’ counsel Michael W. Sobol of Lieff Cabraser Heimann & Bernstein, LLP. "Instead, banks reorder the charges and purchases so that the largest charge or purchase is the first one paid by the bank. This manipulative practice is intentionally designed, the complaints allege, to maximize overdraft fee revenue."
"If you buy your kids a $15 meal at McDonalds on your debit card and your account was overdrawn, that lunch actually cost you $50," added Mr. Sobol. "The bank won’t decline the debit transaction, nor will the bank tell you that you have overdrawn your account and is about to turn your $15 lunch into a $50 expense."
In 2007, banks collected more than $17 billion in overdraft fees. That number nearly doubled in 2008, as more and more consumers struggled to maintain positive checking account balances. In 2009, banks are expected to bring in up to $40 billion in overdraft charges from nearly 50 million customers.
"While all bank customers have been affected, these overdraft fee policies disproportionately affect young people, the elderly and the poor, who are most likely to maintain low account balances," noted Mr. Rogow. "Moreover, these fees have the tendency to create a domino effect, resulting in even more fees."
Further Information for Bank Customers
Bank customers assessed overdraft fees who wish to learn more about this litigation should visit www.bank-overdraft.com where they can submit their complaint to plaintiffs’ counsel.
Contacts
Lieff Cabraser Heimann & Bernstein, LLP
Michael W. Sobol, 415-956-1000
or
Bruce S. Rogow, 954-767-8909
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