My 17 year old son recently opened a student checking account with direct deposit at the First Convenience Bank branch in Midlothian, Texas. He works part time and I encouraged him to open an account at the bank for convenience and to help him begin becoming financially responsible. I went with him to open the account to make sure that I understood the type of account, fees, etc. He was issued an ATM card and signed up for a MasterCard debit card which he received and used. Both he and I religiously checked his account balance prior to his using either card and he knew that I put money in to keep him solvent.
He withdrew $200 after calling the 800 number and doing the ATM inquiry, both of which confirmed a balance of $240.00. The next day he was overdrawn by $200 which ballooned to over $400 with the addition of 5 overdraft charges at $33 each and the following day another $99.00 in fees. I immediately called the branch and made two personal trips to the bank to find out how this could occur. I was advised that because he signed up for direct deposit that he was automatically given $400 in overdraft protection
First of all, had there been any disclosure of an overdraft protection at the time the account was opened, I would have point blank declined it. Many
adults have difficulty with overdraft, so a 17 year old with his first checking account and a $400 overdraft is not only ridiculous but asking for trouble.
I don't think most 17 year olds have much experience in the difference between "Available Blance" and "Ledger Balance," not to mention the pitfalls and ramifications of using overdraft protection. After 5 days and much discussion we were able to get a few of the charges removed but that is not the issue.
My son now has a liability based upon the complete non-disclosure of the overdraft protection on a direct deposit account. In fact there is no mention of the overdraft on the bank's website anywhere including the Direct Deposit link.
I have over 25 years of experience in the Texas savings and loan industry and I certainly know when something is either improperly disclosed or not disclosed at all. In this case there was no disclosure and this is a minor.
I am not sure what the legal ramifications are on this matter but I certainly thing the Texas state banking regulatory agencies should be apprised of this gross misconduct as I am most concerned that this is a widespread banking scam.