I balance my checkbook daily. So this came as quite a surprise to me. I figured I would share my story, because I think the business practices of Key Bank, although they may be LEGAL, are inherently unethical.
I was getting ready to go out of town for about a week, so I had run my account balance pretty low so I could take as much cash as I could with me on the trip. My vacation was great, until I returned home to be bombarded with notices from Key Bank, stating my account had become overdrawn and I had incurred $180.00 in overdraft fees.
I started investigating, re-subtracting & re-adding to try and figure out what happened. It turns out, I had mis-calculated when subtracting a debit a couple weeks back and showed $10.00 more in my account then the bank had. Thus causing the $0.70 overdraft that s****. />
As I was told, "The System" charges a fee for an overdraft even if you are overdrawn a penny. This wasn't even the major part of my frustration. The way in which "The System" processes your transactions was. Allow me to elaborate...
If you SWIPE your card and at the time of the SWIPE (perhaps a few hours before a direct deposit hits your account, in my case) you do not have sufficient funds for the transaction, "The System" will charge you an overdraft fee just for the PENDING authorization. Sure, the transaction will of course POST to the account a few days later, after the direct deposit had been credited, but do they care? No. Because if you swiped your card a few MINUTES even before the direct deposit is credited to your account (which is 8 AM, so I'm told) and you are depending on that direct deposit, you will receive an overdraft fee anyway.
Oh and they have fee tiers. As if tier one fees weren't bad enough at $33.00 a piece, tier two fees are $38.00. Each. I don't know about anybody else, but $38.00? Thats a lot of money. Do I really deserve to be punished $180.00 for a $0.70 overdraft?
I called Key Bank's 1-800 Number and spoke to a girl by the name of Jean. She explained to me that it wasn't a "bank error" and the fees would not be waived. Did I mention this was all over $0.70?
After a few snide remarks and corporate drone rhetoric from Jean, I asked to speak with a supervisor. I eventually was connected to Melissa. Melissa said that it wasn't a bank error, and they would only be able to waive $33.00. She also mentioned that "The System" automatically charges a fee everytime your card is swiped and the money is not "available".
I know the bank receives notification that the direct deposit is incoming well before 8 am the day of the direct deposit, similarly as they receive notification that I swiped my debit card at 7:27:06 AM at whatever location I happen to be at. Why even allow the transaction to go through if the money isn't there? Well, I was told that it will allow me to do that in anticipation of a deposit being made... hypocrisy.
The point is the deposit should post first. I understand the bank is a business however, I have a hard time with paying a fee for a pending debit card transaction. If it hasn't posted to the account, why charge the fee?
Hope this information prevents another bank from robbing us blind.
"To argue with a person who has renounced the use of reason is like administering medicine to the dead. " -Thomas Paine