Colonial Bank Fraudulent Overdraft Fees / Terrible Customer Service Fort Lauderdale Florida

Joi, a hold on checks over $5000 has been a rule for a long time. NOt jsut with Colonial bank, but all banks. WHy do you think all those scam checks we hear about on here are for less than $5000? Because of the hold and the red flags that will be triggered at the bank.

Joi, a hold on checks over $5000 has been a rule for a long time. NOt jsut with Colonial bank, but all banks. WHy do you think all those scam checks we hear about on here are for less than $5000? Because of the hold and the red flags that will be triggered at the bank.

Joi, a hold on checks over $5000 has been a rule for a long time. NOt jsut with Colonial bank, but all banks. WHy do you think all those scam checks we hear about on here are for less than $5000? Because of the hold and the red flags that will be triggered at the bank.

Joi, a hold on checks over $5000 has been a rule for a long time. NOt jsut with Colonial bank, but all banks. WHy do you think all those scam checks we hear about on here are for less than $5000? Because of the hold and the red flags that will be triggered at the bank.

First, let me start by saying the argument of accusing anyone here of being an employee or someone who works for the banking industry (when it doesn't say so) is the argument of someone with nothing to argue. Nobody here works for any bank unless they indicate so and it's ridiculous to think otherwise.

Next, a direct deposit isn't automatically available when you think it is. I have worked with payroll companies in the past and often it is the companies who defer the processing of payroll in such a way that the employee checks don't get into the employee's account until as late as Monday. Why? It's because the company wants to hold the additional money for an additional day themselves. You cannot assume any longer when a payroll check is going to become available because you don't know if (1) the company may defer processing, (2) the payroll process becomes delayed, or (3) the bank may have transaction processing issues. To uniformally blame the bank for something you anticipated would happen is wrong because you don't know where the problems lie.

Next, banks process debits before credits because the debits occurred first, They usually do. The other thing is that your OD's are based on your available balance, not your actual balance. Why? Because that's the balance that would be in your account had the money been taken out immediately? You can try to explain it away and say it isn't consumer friendly (it is). The problem is that it's consumer ignorant that holds the position you have. By your own admission, you spent money that wasn't avalable because you 'anticipated' the money was there instead of waiting until it was. If this had been the first time you did this, the bank would likely have excused your behavior and refunded some of the fees. The fact they didn't....tells us more of the story.

Next, banks always get federal attention - do you think just because they made the news that they weren't being watched before? Banks always follow the rules set forth by the government - they have to. The rules regarding sorting and holds have even been tried in a court - in class action lawsuits and the banks won. There is no one that's is going to hold a bank accountable in D.C. either because the lobby groups in DC have been paying politicians for years. Aside from leaders in the House and Senate, our current president received more from the banking industry than anyone else.

Finally, all banks are the same. The only difference is the name on the front of the building. Even if the bank is taken over by the FDIC, they will continue the same exact practices of resorting, holding, etc... You can change banks one hundred times - they all have the same practices. They all sort high to low. They all process debits before credits. They all have similar fee structures. It has nothing to do with karma. It has everything to do with following rules.

Best of luck to you....

Colonial Bank may turn out to be the largest bank default of the post Lehman Brothers Wall Street rip-off. As I read about their accounting practices that trigger overdraft penalties, let me assure you that this sloth of a bank is about to get it's just reward. What goes around comes around...watch what happens when the FDIC locks their doors for a few days while they "sort everything out"...

This isn't even close. Just because you screwed up and aren't willing to take the blame doesn't mean the fees are fraudulent. Try reading your account terms and conditions that you were given. Didn't read them? Figures. Go to the bank and ask for a copy.

"There's no floating or game playing involved in knowing that an automatic deposit occurs on a specific day that will more than cover any outstanding liabilities."

That is the definition of floating and is also illegal. Banks used to let you "float" as long as you made sure the funds were available when the payee presented for payment. Not anymore. It may have been Check 21, it may have been someone at the bank going "Oooo....major revenue stream." I don't know. All I do know is that they now look at the transaction date to see if the funds were available or not, rather than the posting date of the transaction.

As much of a broken record as it is, Common Sense says don't spend money you don't have in your account at that very moment. It will get you in trouble, financially or criminally.

Folks should be glad stores don't have the time/manpower to pursue check fraud cases against everyone who bounces a check.

1) what was your actual paydate? or deposit or whatever. I ask this b/c most direct deposits are at the bank prior to actual payday. Like payday is 08/08 Friday. It may be visible to the bank as early as 08/06 as a pending transaction. but being visible and available are two different things

2) what where the posting dates of the transactions? If the posting date was 08/07 then it doesn't matter if they can "see" the pending deposit.

What would matter to them is the amout of money in the acct. on posting date..

A lot of banks are starting to look at the transactions not the posting date. If the money isn't there the day of the purchase but it is there the day it is posted they are charging NSF charges b/c when you made the purchase the funds were not available, you were counting on the funds to be there when the transaction posted and that is against every banks policy.

EX: on 08/01 you make a debit for 85.00 but only have 73.00 in the account. You know it take 2 days to post and you have a direct deposit scheduled for 08/02. So when 08/03 rolls around and the transaction posts you have the funds available but on 08/01 when you physically made the purchase they were not there so you are charged a NSF.

They have every right to do this b/c you were spending money you didn't have. I believe it is kiting



"Some people who find themselves short on funds may resort to writing a bad check in anticipation of a deposit during the float time. While this in itself is an illegal act, the chances of getting caught by the bank or prosecuted by a retailer are fairly slim. A professional check kiter, also known as a paper hanger, is more motivated by personal gain than economic survival, however. A professional check kiter will continue to slush funds between accounts until he or she is caught by the law or a bank catches onto the scam." quoted from wisegeek dot com

First, interestingly, I see you've posted concerning several other banks accused of the same thing. Might you be someone whose job it is just to go around trying to diffuse the truth in these types of allegations?

Second, you're wrong. There's no floating or game playing involved in knowing that an automatic deposit occurs on a specific day that will more than cover any outstanding liabilities. There is no real overdraft in that situation. The only "overdraft" that occurs is caused by the bank refusing to process the deposit - which they clearly see - prior to debits that are scheduled to clear that same night. The money is there, ready to be credited to the account. The bank just refuses to acknowledge it and instead processes the debits first. There's no float on a debit that hasn't been processed. Why should the debit hit the account prior to the credit? That's easy, because the bank can screw the customer that way. There is nothing the least bit consumer friendly or fair about that type of process and you can try to couch it any way you like, it's wrong.

I stick strongly by my position that people should avoid the banks that adopt that policy and go with the many very good banks who treat their customers fairly. There are plenty of good ones out there.

And, hmmm, why do you suppose there is so much federal attention directed at the bank these days?

Lori

While I tend to agree with the suggestions made regarding not spending what you don't have, I'd also like to point out that Colonial Bank has recently started placing 10 day holds on any deposits totally more than $5000. Having done business with Colonial Bank for more than 7 years, this practice comes at a time where holding deposits for this amount of time can be the difference between staying in business or closing the doors. Our customers place an order and pay a 50% deposit with the expectation of their order at the earliest possible time. It is difficult to explain to a customer that there will be a minimum of 2 weeks wait before we can even start to process their order. Everyone knows that cash it tight right now, but the banks seem to be capitalizing on this rather than trying to help their loyal customers to survive the downturn and come out on the other side. We've experienced a number of NSF charges as a result of this new hold policy and one of the most interesting things I noticed was that the charges started at $25 per returned item and are now at $36 per returned item -- all within the space of about 30 days. I've also noticed that the Credit Card processors have started a similar practice, holding charges that they deem 'unusually' large and requiring documented proof of the charge, ie: signed contracts, or orders, etc. This is usually followed by a few or more days of 'risk management' review and then the release of the funds. I guess I share in the frustration that everyone in this forum seems to have and that is the sense of hopelessness for any regulation or control over these outrageous practices that will ultimately close the doors of more small businesses and put more people out of work. Change will never come from the Congress or the President, it has to come from our voices and even then it will be a long, uphill struggle, but that seems to be the only way things happen here in America.

Even though we have all done it, you are not supposed to write a check or use a debit card until there are available funds in the account. That's the law, by the way. If the funds are there, it doesn't matter how they post.

Once upon a time you could play the float game and beat items to the bank with a deposit, it's almost impossible to do that now.

Lori wrote: "They freely admit that they apply debits before credits each evening, so that even if you have an automatic deposit that they can clearly see (which they admit to being able to see by the way), they apply your debits first. Of course, this substantially increases the chance that you will incur overdraft fees. Which they refuse to remove, despite the deposit that more than covers the overdraft. This has happened to us on numerous occassions and NEVER happened with Wachovia. I have since researched the issue online and they are one of very few banks that engage in this practice."

Response: No, applying debits before credits does not increase the chances of an overdraft. For example, I have a direct deposit that will be made available on Thursday morning. They can process my transactions any way they like, debits first, last, largest item first or whatever. They cannot increase the odds of my overdrafting because I did not overdraft my account in the first place.

It sounds like you are attempting to authorize transactions and are planning to use future deposits to cover them. That simply doesn't work anymore. Only make purchases when you have enough in available funds to cover the transactions.



Lori wrote: "The government needs to step in and stop these types of unethical banking practices."

Response: Why would the government do that? That would mean less perks for the politicians.