• Report: #154054
Complaint Review:


  • Submitted: Wed, August 17, 2005
  • Updated: Sat, August 20, 2005

  • Reported By:muncie Indiana
Lyndenbrook Place Muncie, Indiana U.S.A.
  • Phone: 877-226-5663
  • Web:
  • Category: Banks

Bank One, Chase ripoff, holding deposited paycheck for 11 days Muncie Indiana

*Consumer Comment: Some comments on reg. CC

*Consumer Suggestion: This *is* illegal

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Recently, I moved to Muncie, IN from Columubus, OH. During the job transfer, my electronic deposit needed to be renewed. While waiting, I received one paycheck on July 29, 2005 and made the deposit at a BankOne branch in Muncie. All went fine.

I received and deposited my second check since moving to Muncie on August 12, 2005 at the same Muncie BankOne branch as my prior deposit. (I kept the deposit receipt by chance). Living, as most Americans now do, paycheck to paycheck, I needed to pay bills online. I paid the bills on Friday which promptly posted to my account THAT DAY. Usually, no big deal as my paycheck deposit becomes available the following Saturday. Not this time! My check never showed pending. I called Saturday to complain (mostly because I was hungry and needed to buy groceries - - remember I just moved to Muncie which took up most of my funds). They told me the deposit would not post until August 17th (5 days). I tried to explain my dilema to the uncaring and rude customer service agent. My complaining must have worked because the funds became available that Saturday afternoon. By this time, my available balance was negative $600.00. Well you would think this is the end of the story... but NOOO!

Today, August 17th, I went to the grocery store again and my debit card was denied!! What the... I called the bank and to my suprise I now had a $1,104.00 negative available balance. I finally spoke to a customer rep. who told me my deposit was put on hold and he could not "unhold" it. He gave me the number of the department who could give me details. So... I call them. Turns out, according to that rep., that my check was "randomly" selected to verify funds from the drawee. Ironically enough, I work for a First Merchants Bank in IT. Anyway, the agent claimed that because my check was deposited at an ATM, they could not physically look at the image, and some more blah blah blah, to verify the funds availability. Now, interestingly, I did not make my deposit at an ATM, it was a branch with a real live teller (remember, I just happended to have the receipt). Did not matter much. The rep. told me that because of the Chase/BankOne merger, her department could not "unhold" my deposit. She told me that my check would be held until August 23 (11days from deposit). However, I could "plead" my issue with the branch manager of the bank where I made my deposit. So, now I am reduced to begging a branch bank manager to p-l-e-a-s-e let me have my hard earned money. I plan to do this tomorrow as I have -$1,104.00 in my bank account and I have no gas, no food, past due car payment, and past due insurance payment!!! Up to this point, I have been told that all debits to my account have cleared and I have no NSF charges. But, I am waiting for that shoe to drop soon. This should be illegal.

muncie, Indiana

This report was posted on Ripoff Report on 08/17/2005 08:09 PM and is a permanent record located here: http://www.ripoffreport.com/reports/bankone/muncie-indiana-47304/bank-one-chase-ripoff-holding-deposited-paycheck-for-11-days-muncie-indiana-154054. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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#1 Consumer Comment

Some comments on reg. CC

AUTHOR: Timothy - (U.S.A.)

Ken is probably right. I say "probably" because regulation CC is full of exceptions that make it very hard to determine whether a violation has occured.

Here is the general rule:

"Funds generally must be made available in accordance with a schedule specified in Regulation CC. That schedule varies depending on whether the check is considered local or nonlocal.

A check is considered local if your institution is located in the same check-processing region as the paying institution. Funds from local checks must be made available by the second business day following the day of deposit.

A check is considered nonlocal if your institution is not located in the same check-processing region as the paying institution. Funds from nonlocal checks must be made available by the fifth business day following the day of deposit."

And here are the exceptions:

"For certain types of deposits, Regulation CC permits financial institutions to delay, for a reasonable period of time, the availability of funds. A reasonable time period is generally defined as . . . six additional business days (total of eleven) for nonlocal checks; your institution may impose longer exception holds, but you may have the burden of proving that they are reasonable. "

In my mind, a hold becomes "unreasonable" when the bank actually receives the funds, which usually happens within a couple of days. I'm not sure if the courts have arrived at the same conclusion, but it seems right to me. The law allows banks to place holds so that they don't give out money that isn't there. Once they have the money, the reason for a hold ceases to exist and the hold is no longer "reasonable."

And check this out:

"If you decide to hold funds beyond the period specified in your institution's general availability policy, you must give the customer a notice at the time of the deposit explaining why the funds are being held and when they will be available. . . if you decide to extend the time when deposited funds will be made available after the deposit has been made, you must mail or deliver the notice to the customer not later than the first business day after the banking day on which the deposit is made."

And here are the types of deposits that fit into the "exceptional holds" allowance:

"Deposits to accounts that are repeatedly overdrawn

Reasonable cause to doubt the collectibility of a check

Deposits into accounts of new customers (open for less than 30 days) Next-day availability applies only to cash, electronic payments, and the first $5,000 of any other next-day items; the remaining amount from next-day items must be available by the ninth business day."

Ok, so lets break this down. If your check did not fit into one of the categories allowing for an exceptional hold, then it should have been made available by the fifth business day at the latest.

However, even if you did fit into an exception, they were still required to notify you, AT THE TIME OF DEPOSIT, of the exceptional hold, or to mail you a notice the next day. BUT, the mailed notice probably would not be sufficient if the decision to place the hold was made in accordance with a standing policy. I would argue that, under these circumstances, the decision WAS made at the time of deposit and, therefore, you should have been given notice at that time.

Furthermore, it seems as though you may fit into the "new customer" exception. If this is the case, then the first $5000 must have been made available to you according to the general rule, and anything beyond that qualified for a longer hold.

On a cursory examination it appears to me that you are the victim of a regulation CC violation, and possibly several violations. Regulation CC allows for statutory damages of $1000 per violation.

So here's my personal (not legal) advice: send them a letter letting them know that you are aware of the regulation CC violations, and demand that they 1) refund any overdraft fees incurred as a result of the violations, and 2) remit $1000 in liquidated damages for the troubles caused by their violations. Let them know that, if your demands are not met, you will hire an attorney. Follow through on that threat if necessary; the statutory damages you may be entitled to should offset the cost of a lawyer.

But, of course, your BEST option at this point is to hire a lawyer right away.

At any rate, feel free to update with any questions you may have, and let us know how everything is working out.

Remember: Bank One is "banking" on your ignorance of the law. Don't let them get away with it!
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#2 Consumer Suggestion

This *is* illegal

AUTHOR: Ken - (U.S.A.)

A bank is required by law to disclose to you, at the time of your deposit, that an exceptional hold is being placed on your funds, and the date on which your funds will be available.

If they fail to do this, then your funds are subject to whatever their POSTED funds availability policy is.

This is all spelled out under federal law (Reg CC). If you received no notice (and this doesnt mean that you got one you didnt read) then just go to the bank and tell them that they are in violation of Reg CC, and that they must refund charges to you, and that if they do not you will file a complaint with the regulatory agencies.

The agency controlling them directly depends on what type of institution they are, so you may have to dig a little.
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