York State Bank and Trust Transaction Reodering to Maximize Overdraft Fees York, Nebraska

You may need to read some of the transcripts of the lawsuits if you are unaware what the banks were caught doing red handed and confessed to under oath and I can link you to it but feel you are capable.

Now while a agree the poster is wrong that there was no law put into place preventing the banks from re-ordering transactions it is simple FACT that the banks were doing this with intent to maximize fess from small transactions with the debit card which is why the banks strongly encourage customers to use the debit card and track it via the online statement.

I was born at night but not last night. With that said I would have to agree 100% that these fees can be avoided if due diligence is conducted by the customer never to exceed with intent of by error what is available in the account the banks are no angels and DID lose lawsuits.

If you would like just say the word and I can post a plethora of links where the banks were charged with this in lawsuits....and either lost and/or settled, and top officials of the bank admitted they did this with malice and intent and NOT to protect auto loans and mortgages as most of the complaints were regarding small debit card transactions costing customers hundreds or thousand in fees and no one sued for the bank not covering an auto loan or mortgage. Hence I feel the complaint as posted here has "some" degree of merit granted the account holder should have been less careless with the account as if this was not caused by error of the account holder as in my case you can get the fees reversed.

Actually my comments are not biased toward the banks. They state facts and explain how & why the people got the fees and how they can avoid them in the future. The OP inferred that the lawsuit they mentioned prevented banks from "reordering" the transactions and the settlement really has nothing to do with that. If people look at their statements the only difference they will see is on days that transactions may cause an overdraft.

They will see the card transactions first and then checks & automated debits. However they may see more checks & automated debits being returned unpaid which will cause NSF fees an fees from the payee. And these transactions will increasingly be for mortgages, car payments, etc. Which could result in these payees not accepting checks/automated debits due to returns.

None of the settlements resulted in any bank being charged with anything illegal. You may consider it unethical when a company conducts their business exactly as they tell their customers they are going do, but I consider it good business & ethical. I have problems that deceive their customers not the ones that tell customers what's going to happen and then the customers complain when it happens that way.

My mom had suggested I take out cash and use that for small purchases. I never used to do that because I have direct deposit and hate going to the bank. But I recently took out $600 to register a car and it only ended up costing around $200. So for weeks I used cash for all my small daily purchases and it really made things so much easier and even the online statement was very easy to understand as the only things on it now are my autopays or bills I pay online and not getting jumbled up with every day purchases. Makes reconciling a breeze...try it even if you also hate going to the bank and as long as you don't bounce a check or other ach/online bill pay you will not get a fee as you can not overdraft. Once the cash is gone you get more and all you need to do is count it to know where you stand.

Striderq makes some points but they are kind of biased towards the banks and it was proven that many of these tactics the banks used to maximize fees were unethical at the very least, and illegal at most which is why several banks have already lost lawsuits and/or settled.

Without getting too lengthy in my comment I will agree a regulation was passed that prevents the banks from automatically enrolling customers into overdraft protection as it caused many who were careless with their accounts to have huge fees placed for this and then it was compounded by the re ordering of transactions. Not all banks do this but some still do which can cause issues such as the author is complaining of. The banks know this and are not doing it to protect auto loans and mortgages, only to pillage customers for small debit card transactions.

What happened to me before the regulation change is Expedia accidentally double charged me for a plane ticket which caused an overdraft for one small debit card purchase. However due to the reordering I was sent 5 overdraft notices at 35 bucks a pop. I was able to get the charges reversed since I was able to prove it was Expedias error but had it been my error I would have been screwed.

Shortly after the regulation changes I was double charged again by some other company and also caused 1 overdraft. However the bank could not screw me. Funny thing was because this was an automated "program" they still sent me 5 overdraft notices....however each one listed the charges as $0.00,  so even though I still would of had the charges reversed if any customer had made one small mistake even by a couple of dollars they would have put at least $175.00 into the bankers pockets unjustly in my humble opinion.

Only advice I have is be very careful with checks and autopays, and make sure you are not signed up for any type of overdraft protection on your debit card as the only thing it really protects is the bank. Now on the other hand if you have a nice cushion of funds in the account you really do not need to worry. Sadly the economy is so lousy many do not have a cushion in their checking accounts and those type of banking customers are prime targets for fees so need to really watch that account balance to the penny or could suffer financial ruin due to fees from a couple of small debit card transactions if signed up for OD protection.

http://usatoday30.usatoday.com/money/industries/banking/story/2011-11-07/bank-of-america-overdraft-settlement/51113170/1

"Despite the settlement, Bank of America insists there was nothing improper about the processing sequence. New regulations enacted following the recent financial crisis prohibit banks from charging overdraft fees on debit cards without first getting customer permission." (Emphasis added.)

The suit and change of laws still allow banks to post in the order they want as long as they inform customers. So what happens now is they will pay debit card transactions and then look at checks and automatic drafts. If any of these cause the account to OD then (depending on if you have overdraft protection or not) the bank decides to pay or return the item unpaid. Both will cause a fee. However this can and has led to payments such as mortgages, car loans, etc being returned unpaid; which can lead to more fees from the creditor. So the lawsuit really didn't change anything. This is best proven by the fact that it was settled in 2011 and you overdrew your account in 2013.

On your 2nd post you made a comment about when the bank decides to post a debit. The bank has no control over this. When the merchant, other bank, etc presents the item for payment the bank must process it that same business day. They can't/don't hold it until the account is short. They can't/don't hold it because they know you have other debits out to come through. The bank must process it on the day they receive it in the order they have informed their account holders that they use.

As for the loan, paying against the principal will not change the amount owed for each payment, it will reduce the number of payments owed. To change the amount of each payment you would have to go to the bank and negotiate a new loan.

I understand your point fully and it is completely valid. However the reordering of transactions, ( I have a log of when the transaction occurred versus when the bank chose to post. ) shows this practice occurring. There have been several banks, including Bank of America, who have been sued and lost due to this practice.  See the below URL.

http://consumerist.com/2011/07/14/bank-of-america-paying-out-410-million-for-reordering-your-transactions-to-maximize-overdraft-fees/

I agree completely that I did overdraft the account, but disagree to your insinuation that the bank is perfectly in their right to charge me 3 overdraft fees instead of the single one it should have been if they didn't reorder the transaction.

When you reconciled your bank accounts did they show you spent more than you deposited?? I bet you did not keep a register or even reconciled your bank account so this is YOUR fault period.