Downto0

Why does bank charge a returned item fee?

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Thank you.

I don't see why it would cost the bank money to deny a request for payment except for postage and a smidget of someone's time to drop the envelope in the daily mail bag. With the advent of internet banking, that small charge is gone. No pay/pay is embedded in the software. The computer does the decision making with a little zap of electicity.

And, what service is provied to the account holder by the bank during this NSF?

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I don't see why it would cost the bank money to deny a request for payment except for postage and a smidget of someone's time to drop the envelope in the daily mail bag. With the advent of internet banking, that small charge is gone. No pay/pay is embedded in the software. The computer does the decision making with a little zap of electicity.

They had to pay for the software. They also had to pay for the software to be customized and interfaced to their existing hardware and mainframes. Banking software is absurdly expensive and is purchased from very reputable vendors. So, there is a huge initial or sunk cost there. Then, there is the yearly cost of licensing and support, which is most likely paid yearly and is probably something on an order of $1,000/workstation. Then, there is the cost of training employees how to actually use the software. And, again, as I've already stated in this thread, nearly all bad checks are handled by a bank employee at some point as they are routed to the Exceptions Department, so there is the cost of human resources again. Nothing is free.

Now, it is true that these costs are offset by the fees they rake in, but there is a slippery slope between risk management and profitability and if you start tugging too hard at their profits, this can be a risky proposition relatively quickly and that's not in anyone's interest [except for some deranged people who post on this Web site...].

And, what service is provied to the account holder by the bank during this NSF?

The service of acting as a "clearinghouse". The service of taking your check, routing it through Exceptions and sending it back to your creditor unpaid and marking this on your account statement for reconciliation as provided for in your deposit account agreement.

The banks will also send you a notice by mail that you have bounced a check. [some smaller banks and credit unions will even give you a courtesy phone call. At the big banks, you can get that type of service if you're part of their "private banking group"]

Edited by Bigwoodystyl
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Now, it is true that these costs are offset by the fees they rake in, but there is a slippery slope between risk management and profitability and if you start tugging too hard at their profits, this can be a risky proposition relatively quickly and that's not in anyone's interest.

This is pretty much the issue here. The operational costs, once the total profit was figured in, would probably pretty much look like peanuts.

And, once you enter into an adhesion contract, you pretty much tell the bank that they can do anything they want with your money. It doesn't matter that you later realize you are getting a bad deal. The courts are reluctant to help:

The law generally treats an adhesion contract like any other legal agreement and assumes that a signature or use of the product or service establishes the intent to be legally bound. Whether or not the consumer actually read the terms of the adhesion contract is not legally relevant. Nevertheless, certain consumer protection rules apply to adhesion contracts when the terms do not fall within the reasonable expectations of the consumer. For example, if an adhesion contract term were so unfair that no reasonable or informed person would agree to the term, the court may invoke the legal doctrine of unconscionability and not enforce the agreement. However, in an effort to balance the competing interests of the parties, courts have set the standard as to what terms are unconscionable quite high. Thus, the adhesion contract clause in question must have been unfair at the time the contract was created and “shock the conscience” of the court.

http://www.mnbar.org/sections/adr/Contracts%20of%20Adhesion.pdf

No court is going to unilaterally make a decision that would deny the banks profit which would dig deep into the whole banking system's pocket.

But something needs to change. The banks don't really try to recover costs or make profits from the wealthy because those account holders can afford lawyers.

There are many, many, many more working poor people who are easily convinced that it is their moral obligation to be an indentured servant just because the bank allowed a POS to go through for a gallon of milk and a box of cereal, for an additional fee of $35, of course.

The account holders who have the money to avoid the bank's fees are the ones who are not paying for any of the bank's operational costs. The poor pretty much cover it for them.

Yep, the rich get richer and the poor get poorer.

Edited by Downto0
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You throw out insults and then try to act rational. The bottom line is that I said nothing wrong about those Citibank accounts. If an account had a positive balance and it was wiped to zero on the credit card, that would be BAD for the consumer. Why? Mainly because it was CHEATING the consumers. Secondly if the card had any account maintenance fees then as soon as the sweeps hit a persons' account and zeroed it out, that person would be in the red as soon as their account maintenance fees hit, whereas with a small positive account balance, their account might not have been impacted as badly. To assert that the Citibank case is an exception rather than a rule is rooted in a hope that these institutions will act honorably. Nothing could be further from the truth. Evidence and time has shown us this.

You've also obfuscated the discussion and tried to justify these egregious fees by saying that the banks pay for everything and nothing is free. Well, if they charge on average $3.00 per ATM transaction and millions of people use the ATM per day, that is $3 *millions, surely enough to cover the expense of workstations that run proprietary software. Next, the cost of the software tends to range from $1 to $10 million (eg SAS for analytics and the proprietary packages), so within the span of one week or so, the cost of the software and workstations could be paid for a branch and certainly within the span of two or three weeks, many of these administrative costs.

You are trying to justify bank conduct and the fact that they've increased their profits via fee income from consumers over the years. It doesn't work. This is wrong. You grasp at straws then give some tired argument from introductory philosophy class. Grow up.

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...justify bank conduct and the fact that they've increased their profits via fee income from consumers over the years. It doesn't work. This is wrong.
This statement is key to knowing why you feel the way you do. Banks don't have to justify conduct to anyone but their owners. They are there to MAXIMIZE shareholder value (truly, by law that is their purpose). The check and balance is the system is the fact that there are quite literally thousands of banks and credit unions that compete for your business. They certainly don't have to justify themselves to you or I, only to the millions of people who provided them their capital. So if you feel the bank is unfair, find a new one.

If a bank wants to charge $10 ATM fees and $100 overdraft fees and pay their CEO $150 million per year, I'm all for it. Shareholders will get wiped out when consumers vote with their business and bank elsewhere. The bank owes me nothing as a customer. I don't where people get this idea that the bank owes them "fairness".

But the real question is why anyone on this planet continually takes it on the chin and pay NSF fees?

One more thing- sweep accounts are yield boosters. They are beneficial to small business customers who tend to keep free cash in accounts. When I open up businesses for people, I advuise them to open accounts with a sweep feature.

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I do not see why there is even a pizzen contest to this thread:confused:

A bank is there to make money, and they will do it anyway they think they can squeeze a dollar, and we all know this.

If you write a bad check, it will cost you on both ends regardless of your situation and if one does not like the fee structure, then dont bounce the check.

If you dont like the fees charged by using a debit card,ATM, or check, then dont use it, and the list goes on and on.

I am not defending the banks, but common sense in that you know when you use their products it come's with a price that you agreed to when you wrote the bad check or swiped the ATM or took out the loan.

If anything in this Global mess has taught anyone, it should be money management.:shock:, and the BANK's rule the world:-(

Edited by 1time2many
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But the real question is why anyone on this planet continually takes it on the chin and pay NSF fees?

You seem to be a person who has never lost their income unexpectedly otherwise you would not be asking this question. Most consumers do not get up in the morining and decide they will start to run a low balance just to see if they can manage their financial affairs under this constraint.

but common sense in that you know when you use their products it come's with a price that you agreed to when you wrote the bad check or swiped the ATM or took out the loan.

No, common greed is the problem. Swiping the ATM is the best example why you are wrong. Banks purposely encourage their account holders to sign up for some sort of overdraft protection in order to collect more money at the POS. Some banks give overdraft protection without even asking the account holder's permission.

With this set up, the account holder can go to the burger joint and charge a $5 hamburger and unknowingly pay an overdraft fee. If the account holder did not have overdraft protection, the transaction would be denied. The consumer would go hungry until they got home but at least they would not have paid $40 for a hamburger.

The simple solution, and it's in court right now, is to inform the account holder at the POS that the current charge will overdrat them. The banks are fighting it because they know they'll lose future pofits.

This is not only not fair, but down right dishonest.

Edited by Downto0
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This is simply not true. If you are getting your information from the USA Today, I suggest another source.

(1.) It's a function of risk management [that just so happened to become profitable].

(2.) "bad" checks are still handled by individuals. They are held in the bank's exceptions department for a minimum amount of time determined by regulations and/or they are forwarded to loss prevention / deposit account loss control centers if they are large amounts. There is real human resources involved each time a check is "bounced".

OK, I may be naive but from what I have seen, this statement is not true. You cannot honestly tell me that an actual human looks at a 10 cent overdraft and just stamps it and moves on without questioning the practice. If there are humans doing that, then they will not for long because with that kind of thought process, they could make more money as debt collectors.

Besides, from what I have seen at my bank when I did bounce a check once, it was all automated. Once the check arrived and there was not enough money in my account, the money was taken from savings (and charged a $5 fee), the notice was posted to my account inbox, and I received an email from a non-response server. This happened so fast that there is no way a human did that.

Even if per chance, a human does look at these things, the most it would cost a bank would be $10 to deal with an NSF check. That is still a long ways off from $40 in the fee that you were charged.

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You seem to be a person who has never lost their income unexpectedly otherwise you would not be asking this question. Most consumers do not get up in the morining and decide they will start to run a low balance just to see if they can manage their financial affairs under this constraint.

No, common greed is the problem. Swiping the ATM is the best example why you are wrong. Banks purposely encourage their account holders to sign up for some sort of overdraft protection in order to collect more money at the POS. Some banks give overdraft protection without even asking the account holder's permission.

With this set up, the account holder can go to the burger joint and charge a $5 hamburger and unknowingly pay an overdraft fee. If the account holder did not have overdraft protection, the transaction would be denied. The consumer would go hungry until they got home but at least they would not have paid $40 for a hamburger.

The simple solution, and it's in court right now, is to inform the account holder at the POS that the current charge will overdrat them. The banks are fighting it because they know they'll lose future pofits.

This is not only not fair, but down right dishonest.

Then the next time you get an NSF charge for a POS event, refuse to pay it, deal with the collectors and fact that you cannot open a bank account, and eventually go to court and fight it.

Not all laws are encoded into law. Almost all states in the USA follow the common law system that was brought over from England. That means that the court follows any presedent that was set forth by either a court in its juridstiction or a higher court. If no presedent cannot be found in US law, the courts can and do look to English law prior to 1776 to see how to rule (in fact, truth as a defense to slander is a common law rule dating to the 1730s). I am sure that somewhere in all the court rulings, someone can find one where a court has ruled that fees for bad checks are legal. That however is not for me to find but for you.

Also realize, that many banks charge the fee in lieu of criminal charges which can be brought against you in most states if you write a bad check. Some could say it is extortion but that is for the courts to decide and apparently either no one has tried to fight it or has fought it and lost.

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No, common greed is the problem. Swiping the ATM is the best example why you are wrong. Banks purposely encourage their account holders to sign up for some sort of overdraft protection in order to collect more money at the POS. Some banks give overdraft protection without even asking the account holder's permission.

It does not matter, you chose the use of the ATM card, period. If you did not read the fine print then you are to blame. If you let your account (for whatever reason) to get that low, then you know you are taking a chance,Period.

The simple solution, and it's in court right now, is to inform the account holder at the POS that the current charge will overdrat them. The banks are fighting it because they know they'll lose future pofits.

This is not only not fair, but down right dishonest.

To this point I might agree, but again it is YOUR responsibility to ensure you have funds available to cover any transaction.

I dont like bank cards, I dont use ATM's, and I make sure I dont write checks my butt can't cash, this way I avoid any useless fees the banks has to offer8-), it just that simple.

Common sense will dictate whether or not you ever pay these type of fees, its not rocket science.

Edited by 1time2many
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Just look at my sig to see how I feel about banks.

For hundreds of years, banks have been the scalawags of the community, but now they are looked at as "providing a service". Yeah they provide a service alright. Vacuuming our wealth out of our pockets to the elite. They've just become more and more bold over time.

Before long, they'll probably charge us for withdrawals, to get our own money back.

Don't laugh. If they want to, they will. And don't look for any "elected leaders" to stop them.

I add another quote from Thomas Jefferson: I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a moneyed aristocracy that has set the government at defiance.

And here is one from Abraham Lincoln. You should really take this one to heart. It's very prophetic:

"The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies, all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the Bankers in the rear. Of the two, the one at my rear is my greatest foe.. corporations have been enthroned and an era of corruption in high places will follow, and the money powers of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed."

Edited by pcmech
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Y'all are free not to use banks if you think the services they offer are of no benefit and are only there to rip people off.

However, to whom you will pay your mortgage and where will you go when you want to buy a car..[Will you, the person who can't account for a $5 hamburger, pay cash for a vehicle?] What will happen the next time you get ripped off by an unscrupulous merchant [who, by the way, already took your cash]? Would you prefer to go to the post office and spend hours each month buying money orders and mailing your bills? Who else will guarantee your deposits from loss--are you going to put your money under the mattress? Who is going to offer you the real protection and privacy of a safe deposit box, which, physically, without your key can only be opened by drill? Can you find an inexpensive lawyer to provide basic trust services? ........................

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"The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies, all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the Bankers in the rear. Of the two, the one at my rear is my greatest foe.. corporations have been enthroned and an era of corruption in high places will follow, and the money powers of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed."

He was a Republican, right? :shock::)

I disagree with the quote, of course. As for the wealth being aggregated in to the hands of a few. Alexis de Tocqueville wrote in 1835, "Most of the rich men in America were formerly poor", and that's as true today as it was then.

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This statement is key to knowing why you feel the way you do. Banks don't have to justify conduct to anyone but their owners. They are there to MAXIMIZE shareholder value (truly, by law that is their purpose). The check and balance is the system is the fact that there are quite literally thousands of banks and credit unions that compete for your business. They certainly don't have to justify themselves to you or I, only to the millions of people who provided them their capital. So if you feel the bank is unfair, find a new one.

If a bank wants to charge $10 ATM fees and $100 overdraft fees and pay their CEO $150 million per year, I'm all for it. Shareholders will get wiped out when consumers vote with their business and bank elsewhere. The bank owes me nothing as a customer. I don't where people get this idea that the bank owes them "fairness".

Right!

While the purpose of any publicly traded company is to increase shareholder value, in the case of an industry like banking, one that is highly regulated and hyper-competitive, the well being of the customer has to be considered. If the customer is not considered first, then, as you say, the shareholders would quickly get wiped out. If there were some sort of massive collusion effort or conspiracy among the big banks to steal money from the poor, then the banks that engaged in this practice would lose all their customers.

From marketing to human resources to technology services to wholesale banking to retail banking, lending and credit cards, banks try to put the customer first. If they didn't do these things, they would lose their customers to the bank across the street that did do them.

OK, I may be naive but from what I have seen, this statement is not true. You cannot honestly tell me that an actual human looks at a 10 cent overdraft and just stamps it and moves on without questioning the practice. If there are humans doing that, then they will not for long because with that kind of thought process, they could make more money as debt collectors.

You might be, but it's not a question of naivete, it's a matter of banking operations, which are actually quite transparent. I can "honestly tell you" that I'm not here to lie to people on an anonymous forum... You can't make a blind man see, but anyone who remains naive does so by their own choice. For the most part, banks all function relatively the same way because they all use relatively the same systems. As for the human element, it's not a great job, but it's a job. Go to any bank's Web site and go to the "careers" section and you can find jobs in exceptions or in check processing for $9-$12/hr. Read the job description. Then, get back to me. Who writes checks these days, anyway?!

You seem to be a person who has never lost their income unexpectedly otherwise you would not be asking this question. Most consumers do not get up in the morining and decide they will start to run a low balance just to see if they can manage their financial affairs under this constraint.

As one who carries a low balance, you should be the most careful, especially since you are so well aware of what happens if you spend more than what you have on deposit. Keep a checkbook register and track every penny you spend. Or, carry cash and don't use your card or checks. If you carry cash, you can't possibly overspend. Suppose the bank gave you a free $500 tomorrow. I surmise that you'd be right back in the same situation 3 weeks from now. Your problem is a lack of income and a lack of accountability. Your problem is not the bank.

Common sense will dictate whether or not you ever pay these type of fees, its not rocket science.

Well said.

What I just don't get is how providing a service means ripping people off.

Who is getting ripped off again? Just look around this forum and see how many people have Chex Systems listings because they owed a bank money and didn't pay.

You are trying to justify bank conduct and the fact that they've increased their profits via fee income from consumers over the years. It doesn't work. This is wrong. You grasp at straws then give some tired argument from introductory philosophy class. Grow up.

:rolleyes: You've got it all figured out.

PS

If you post in this thread again, I will expect another set of arguments from you that don't hold water followed up by yet another ad hominem attack against me

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Originally Posted by Downto0

You seem to be a person who has never lost their income unexpectedly otherwise you would not be asking this question. Most consumers do not get up in the morining and decide they will start to run a low balance just to see if they can manage their financial affairs under this constraint.

As one who carries a low balance, you should be the most careful, especially since you are so well aware of what happens if you spend more than what you have on deposit. Keep a checkbook register and track every penny you spend. Or, carry cash and don't use your card or checks. If you carry cash, you can't possibly overspend. Suppose the bank gave you a free $500 tomorrow. I surmise that you'd be right back in the same situation 3 weeks from now. Your problem is a lack of income and a lack of accountability. Your problem is not the bank.

I don't know if you are being purposely evasive or are so distracted by trying to get your own point across, that you miss the actual point being expressed.

You, jq26, and a few others, have a regular source of income. You guys keep a balance above the overdraft threshold. What if you unexpectedly lost that secured income? How long could you make your current payments before you would be in the same boat as the rest of us unappreciative account holders?

One thing that I think I have learned is that you guys seem to be quite happy with the bank's policy of chasing after the poor little guy. If their profit lust is satisfied here, they won't be ogling your accounts.

Don't worry, we've got the operational costs for the banks covered. You can bank free. It's on us.

Anyway the answer to my thread question seems to be that, "No, there is no law which justifies banks charging inordinant fees - it's just something that they've always done".

Is this it, or did I miss something?

Edited by Downto0
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OK, I am not interested in getting into a fight on whether banks use humans or computers to deal with bad checks. However, here are my viewpoints on this:

If you write a check to a merchant for goods and services and do not have the money in your account, you are a liar. You have committed theft and fraud. It is as simple as that. A check is as good as if you handed cash to the merchant. You have the item or results of the service but the merchant does not have your money. Not only that, but I see money as "Certificates of Appreciation". That means that you show the merchant that you appreciate their efforts by giving them money. When you give a bad check, you are telling that merchant that you really do not appreciate their efforts.

The law sees bad checks as fraud too. Every state has statutes about that and if you have a habit of writing bad checks, you could end up in jail. Now many banks pay the debt to cover the merchant so they take over as the one who can file criminal charges (in the old days, it was the merchant who had the right to do so.)

The bad check charges were designed to 1) reimburse the banks for their efforts and 2) to act as a discouragement to writing bad checks. Now obviously, the fees of today certainly cover the costs the bank incurs to handle the checks. Whether they discourage the writing of bad checks is another question. I am sure that if I looked hard enough, I could find either case law or civil law that allows banks and merchants to charge for bad checks. I am sure you are not the first person to think about this subject.

Finally, keeping a bank book balanced is at most 6th grade math (and I am not sure it is that hard). I would have to say that 90% of the population should be able to do it if taught properly. Many times however, people either see balancing the checkbook as a chore that they do not want to do. Now I know that Debit cards and POS devices have made it harder to keep track of where the money is going. If you have a problem with those products, STOP USING THEM! Use cash, it will keep you from spending more than you have. I always run my checking account to the wire, putting the excess funds into products that will earn me a little money. I also keep track of my balance and if I see that the money is not there for a bill that needs to be paid, I go to my savings account (which all adults should have too) and put what I need into checking.

So in the end, even if I think that NSF fees are excessive, I think they are necessary, otherwise the public would have to go back to cash because no merchant would want to take a check or debit card.

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What I just don't get is how providing a service means ripping people off. But you said it less confrontationally and more elegantly then me:)

Well thank you.

To Bigwoodystyl, yes he was Republican, but that was a time when the parties were actually different and people like him spoke from their heart and told it like it was, instead of today when both parties bow down to the same people and give us a false choice and spout "talking points" all day. I know it sounds like I'm getting all political here (:)) but I'm not meaning to.

When you go back and do a little historical research (not the white-washed kind you find in school history books), you see that most presidents' biggest foe was the banks. Andrew Jackson said on his death bed that his biggest accomplishment was "killing the bank".

Woodrow Wilson (who was nominated and elected for the specific purpose of signing the Federal Reserve into law when the other candidates wouldn't) said before he died, talking about the Fed, that he had (and I'm paraphrasing here, can't remember the exact quote) sold his country down the river when he signed that.

Basically, I know this thread is about bank fees and stuff like that, but when you study it, bank fees are the least thing we should worry about when it comes to banks.

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When you go back and do a little historical research (not the white-washed kind you find in school history books), you see that most presidents' biggest foe was the banks. Andrew Jackson said on his death bed that his biggest accomplishment was "killing the bank".

Evidently, I need to do some "historical research". Andrew Jackson...that's the guy on the $20 bill, right? :p

I keep track of my balance and if I see that the money is not there for a bill that needs to be paid, I go to my savings account (which all adults should have too) and put what I need into checking.

Well, it's easy if you have money in savings. Put yourself in the OP's shoes and suppose you didn't have a savings account.

Would you remit payment anyway even though you lack the funds to do so and then later whine about the banks ripping you off?!

Edited by Bigwoodystyl
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So this is where all the action has been for the last few days. It will take me all day just to read this thread.

Before I do, though - what I can't get past is this:

Banks provide a service. No one has to use a bank. You can keep money in your pillowcase instead.

If you use a bank, why can't you just make sure you always have some money in there? If you write a check or make a withdrawal, why can't you just make sure the total withdrawn always leaves some money sitting in the bank?

The bank is there to hold money for you safely. It's a safekeeping place. Am I missing something?

No one can expect the bank to keep using its own funds to pay checks on your behalf when you don't actually have money in your account. Seriously - what is so complicated about that? It can be done with a paper-and-pencil ledger.

It's a good thing I'm not a bank. If I were, I'd shut down an account the moment it goes negative. I might or might not reopen an account at a later date for that customer, depending on circumstances and depending on whether the shortage has been made up, among other factors. At the very least I'd charge a hefty fee, if only to discourage the practice of carelessly making transactions for which no money is available, thinking the bank will pick up the slack.

Edited by Chester P. Dexter
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You, jq26, and a few others, have a regular source of income. You guys keep a balance above the overdraft threshold. What if you unexpectedly lost that secured income? How long could you make your current payments before you would be in the same boat as the rest of us unappreciative account holders?

What? Wait a minute. I run my account down to 30 cents regularly. Risky, yeah - but I use a calculator and a paper-and-pencil ledger and check it against my online banking information and verify it three times. It seems like about once per year I screw up and make a mathematical error or forget an entry. At that point I call my nice neighborhood bank (it's really a branch of a regional - not a huge national - bank) and fess up to my mistake and ask them sweetly if they'll reverse that fee and they always say yes (the key seems to be don't ask for that more than once every six months.)

My husband did that twice in a six month period and he didn't ask the second time, he just ate the $39 fee. Why? It was HIS MISTAKE and he knew it. And he knew that no one told him to run his account down to 19 cents and then forget a charge coming in. See - I'd say we can go a year or more without one of these mistakes but we occasionally make them.

It doesn't have to do with having regular income or how much income (if you saw how puny our bottom line is most of the time you'd fall over - and if you saw how much money we move and where it goes and how many places it goes and how many tiny, medium, and huge transactions we make constantly, you'd wonder how we stay in the black almost all the time.)

If I really had no income anymore or could not keep from making mistakes, I'd just close down my account and carry around a wallet with cash in it. Why have a bank account if you don't have enough money to keep even a small amount of money in it?

I don't think the bank appreciates you or doesn't appreciate you based on your income or your account balance - they just want you to keep it in the black, that's all! What's so hard about that?!? If you don't have the money to make your payments, pull the money out of your account, put it in a wallet instead, and go buy money orders for paying bills. Or, if you keep a ledger and you see that a transaction will take your account negative, then don't put that transaction through until and unless you can put enough money in the account to make the transaction valid.

Am I missing something ?!?!?

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Bigwoodystyl:

Well, it's easy if you have money in savings. Put yourself in the OP's shoes and suppose you didn't have a savings account.

Would you remit payment anyway even though you lack the funds to do so and then later whine about the banks ripping you off?!

This is the problem. To remit payment you would have to beg, borrow or sell blood (before the bank gets it, of course) because you know the bank is going to hit you hard for a little thing.

At some point, your relatives will start turning you down and you can only give so much blood before you turn white as a sheet. And, you still don't have a job.

So, what kind of magic pencil do you guys have that will make my ledger balance?

What? Wait a minute. I run my account down to 30 cents regularly. Risky, yeah - but I use a calculator and a paper-and-pencil ledger and check it against my online banking information and verify it three times. It seems like about once per year I screw up and make a mathematical error or forget an entry. At that point I call my nice neighborhood bank (it's really a branch of a regional - not a huge national - bank) and fess up to my mistake and ask them sweetly if they'll reverse that fee and they always say yes (the key seems to be don't ask for that more than once every six months.)

This used to work for me but the banks are begining to realize that this is a cut into their profits. In fact, in my attempts to settle my current overdraft problem, my friendly banker informed me that no one was authorized to reverse overdrafts except for a few select few - and no one with this authority worked at the bank I do business with.

It doesn't have to do with having regular income

So, if you lost your regular income you would still be able to make payments until you found another job, right? Or let's say your husband became gravely ill, or worse, and you have kids to babysit, you would still be able to make payments, right?

The banks commonly find a way to assess 3 or 4 overdrafts when one will do. Bofa is being held to task because it religiously places the bigest NSF first thereby cause more overdrafts.

Is this okay with you. Sounds like it is. You say that if the account holder doesn't balance their account that it's the consumer's fault. Then as long as the consumer made the mistake, the bank can manipulate the event into as many overdrafts as it can conjure up?

WhoCares1000

Finally, keeping a bank book balanced is at most 6th grade math

Yes, I know how to balance my account. I do it at least once a month when I receive my statement. I sometimes do it during the month if I do a lot of spending.

This is not the problem nor does it have anything to do with my original thread question.

My original question was if there were any laws which support the banks overdraft procedures. One of those procedures manipulated by the banks is to give the account holder overdraft protection, with or without their permission, thereby confusing the consumer into thinking that they had money at a POS when they were actually dipping into the overdraft protection - at an additional charge.

The bank should realize that an account holder would not want to pay $40 for a $5 burger. There is a class-action suit dealing with this issue as we speak. The suit states that the account holder should be given a notice at the POS that the POS would overdraft them.

You know, it will never happen, but I'd like to see the bill I spoke of earlier become law where there would be a cap of 6 overdrafts per year. The banks, in their quest to quench their unadulterated greed, will invent new fees which are likely to find a place in the accounts of the posters who are now saying that the bank can do anything they want because you signed an adhesion contract.

Go ahead, try to balance your accounts. There will still be an "i" you did not dot or a "t" you did not cross because that is the way that the bank will set it up.

Edited by Downto0
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Evidently, I need to do some "historical research". Andrew Jackson...that's the guy on the $20 bill, right? :p

Yeah, that's his picture right below "Federal Reserve Note". He's been rolling over in his grave ever since. :)

When I talked about doing research, I wasn't saying that YOU needed to do research like you didn't know history or something. I was taking a jab at school textbooks leaving out so many important topics just to satisfy the people who decide what history is passed on to children.

It wasn't meant to be a slight toward you.

Just wanted to clear that up.

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So, if you lost your regular income you would still be able to make payments until you found another job, right? Or let's say your husband became gravely ill, or worse, and you have kids to babysit, you would still be able to make payments, right?

No, and I would not make payments with money I don't have. Because doing so would only incur fees and charges.

You can't pay bills with money you don't have!

Does this problem have to do with automatic payments that are set up? I don't have any of those. I log in and consciously, purposely put through a payment when I need to pay a bill. I first make sure I have money in the account to pay the bill. If I don't have enough money, I don't pay that bill.

Another problem may be using your checking account for many charges and purchases. I don't even use my checking account card for POS. I use credit cards for everyday purchases and then deal with the credit card balance later. I used to use my bank checking account debit card for everyday purchases but honestly, it did make balancing my account very difficult. I only use my checking account for paying bills online. The debit card gathers dust because I use it once in a very great while when I withdraw cash from the ATM - and that's almost never.

If you don't have a credit card, then just withdraw cash and use it for everyday expenses. If I had no credit cards, I would do more of that because I really don't like the recordkeeping that is involved with making everyday purchases (like for groceries, gasoline, etc.) around town with a debit card. It does make a checking account very "busy."

I'm sorry, but it really sounds like a lot of whining is going on regarding overdrafts that are the consumer's fault. The bank can't make money magically appear where there is none, and they can't supply money for you. You're mixing issues by being mad at the bank for your income problems. I can completely understand income problems - I've had them, and still have them - and how! But don't compound the pain by expecting the bank to be understanding when you run more money through your account faster than you can keep the bottom line positive and make everything go through on a cash-flow-positive basis. It simply isn't their fault! Of course they're going to give you some punitive fees if you pay bills using money that isn't really there. You can just deal in cash and money orders if it's that bad. That statement isn't meant to be insensitive - it's just good advice. Not everyone can have or should have a bank account - at least not at every phase in their lives. If your cash flow is that tight and/or you're unable to keep even $5 slush in there to keep it in the black, you really don't need or shouldn't have a bank account. You're just causing yourself more pain and worsening your financial situation by incurring bank fees - and I still say the bank does nothing wrong by charging you if you run your account negative. Don't let them - don't have a bank account if that's the way it's going to be.

Edited by Chester P. Dexter
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Yeah, that's his picture right below "Federal Reserve Note". He's been rolling over in his grave ever since. :)

When I talked about doing research, I wasn't saying that YOU needed to do research like you didn't know history or something. I was taking a jab at school textbooks leaving out so many important topics just to satisfy the people who decide what history is passed on to children.

It wasn't meant to be a slight toward you.

Just wanted to clear that up.

History is written by the victors, not the vanquished.

Just to be clear, when Andrew Jackson said "bank", he was talking about the central banking system of the United States and the control of the monetary supply, structures of the banking system, open market, etc., which has [almost] nothing at all to do with what we're talking about in this thread.

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