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(BBC)   Banks make massive profits from penalties on bounced checks. However, in the UK, that's illegal, and the threat of a court case will get you all those penalties for the last six years back   (news.bbc.co.uk) divider line
    More: Spiffy  
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5194 clicks; posted to Main » and Business » on 13 Dec 2006 at 4:23 AM (16 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2006-12-12 6:02:11 PM  
It's spiffy that people have yet another way of over extending themselves, thus driving themselves even deeper into debt?
 
2006-12-12 6:14:11 PM  
I haven't bounced a check in the last 6 years.
 
2006-12-12 6:21:03 PM  
absoluteben,

It's spiffy that people have yet another way of over extending themselves, thus driving themselves even deeper into debt?

I like the idea of using overdraft fees as a way to discourage people from being dumb with their money.

However, a lot of banks have elevated it to an artform for stripping money from people who live paycheck to paycheck.

If you're a "paychecker-to-paychecker" and you deposit your check, they'll post all the debits to your account first in an effort to drive you into the red and charge you fees. Then, they'll post your paycheck.

The system is being abused horribly by the banks.
 
2006-12-12 6:27:07 PM  
That sure would have helped a few years ago.

Two occasions where I racked up more than 100 bucks in snowballing overdraft fees.

Yes, it was my fault, but the bank still earns the title of "bloodsucking bastards" in my book, which, BTW, is bound in human skin...
 
2006-12-12 7:28:09 PM  
SchlingFo: The system is being abused horribly by the banks.

My bank is one of the offenders. Just a couple months ago they got me good. I have two accounts, business and personal. All my deposits go into the business account and most of my checks/debits come out of the personal account, so I regularly transfer money into the personal account.

Well on one particular Monday I was an hour late transferring money. I did it at 9:00 PM and the cutoff is 8:00. The next day, they hit me with $231 in overdraft fees for two checks and four debits over the weekend. The pisser is they put the biggest check through first, which overdrew my account by less than $10. Then they put through everything else and charged me $33 in fees for each one. And all the debits were small, like $6 at Burger King, $2 for a Coke and chips, etc.
 
2006-12-12 7:34:34 PM  
A few years ago, I deposited a check for $40k in my business account, thinking I wouldn't be credited for it until the check cleared.
The next day, I took out $200 at the ATM, but apparently the check(from a company that I've never had any problems with) bounced. How was I supposed to know? The ATM said my balance was over $40,000.

The bank SOAKED me in overdraft charges, and redeposited the check 4 times in one day, until it finally cleared.
All in all, the whole thing ended up costing me close to $300.
 
2006-12-12 7:46:23 PM  
Smell the Glove: I haven't bounced a check in the last 6 years.

I haven't written a check in the last 4.

/electronic billing
/no more stamps
 
2006-12-12 7:51:01 PM  
Moral of the story: Banks are organized thieves. The thievery is so pervasive it is programmed into their computers, the overdraft charges game being only one example. The ATM machines are not up-to-the-minute with your actual account balance or with manipulations that go on behind your back. Banks have arranged custom-made laws to aid them in the overdraft scam. They can even yank funds out of your account weeks after you think it is safely deposited if an item you have deposited bounces, and they will tell you by snail mail, and charge you overdrafts for problems you can't possibly anticipate. The only antidote I know is to keep too much money in your non-interest-bearing checking account to cover such contingencies, which is all part of the scam. Bankers have black hearts big smiles and expensive lobbyists.
 
2006-12-12 8:00:02 PM  
I have not had this problem with USBank. they seem to post things in the order recieved. I did get stung once about 5 years ago because not all funds were available for a check i deposited when I posted a debit. But I didn't get charged an OD fee for some reason.

BofA is notorious for posting debits then credits.
 
2006-12-12 8:52:02 PM  
This About That: Moral of the story: Banks are organized thieves.

They have nothing on the government.

Monday deadline for property taxes

"SAN DIEGO - San Diego County residents have until Monday to pay the first installment of their 2006-2007 property taxes.

According to Treasurer-Tax Collector Dan McAllister, a 10 percent penalty will be assessed for any tax payment not postmarked or delivered by Monday. "
/on a $500,000 house that's $275.

$500,000 * 1.1% / 2
 
2006-12-12 9:20:12 PM  
And don't they just hate refunding those NSF charges when it's due to some double billing by a company?
 
2006-12-13 1:20:36 AM  
This About That: Banks are organized thieves. The thievery is so pervasive it is programmed into their computers, the overdraft charges game being only one example. The automated teller machine machines are not up-to-the-minute with your actual account balance or with manipulations that go on behind your back.

Credit unions are better. Their terms and conditions tend to be less rights-diminishing anyway.

/car loan and only credit card are both through CUs
//should switch the checking account to one, but is too lazy to
 
2006-12-13 4:34:44 AM  
What the hell is a check?
 
2006-12-13 4:38:27 AM  
I work at a Grocery store (HEB bleh) and I DESPISE anyone who writes a check. Get a flippin debit/credit card or carry cash.

yeah i got busted for accepting a bad check on accident though
 
2006-12-13 4:43:05 AM  
SchlingFo

I was going to post something, but you pretty much said it all.
 
2006-12-13 4:45:24 AM  
Question: Are there any laws in the UK stating what time of day a debt collector may call your house?
 
2006-12-13 4:52:00 AM  
cheque plix?
 
2006-12-13 5:10:24 AM  
My bank charges $25 for bounced checks (that it covers), and I've bounced a few times when low on funds. It's not enjoyable, but then again it's my fault unless the bank is holding my deposits for several days or something, and so far I've seen no evidence of that.

I rarely pay by check any more anyway, debit card 4tw.
 
2006-12-13 5:12:37 AM  
...deja vu, or was this once a TF-only story that they inadvertantly put on the main page about a month ago?
 
2006-12-13 5:30:44 AM  
All of you guys telling stories about how much you lost in fees...why did you put up with it? I overdrew a checking account once, 9 years ago, by a very small amount. I asked the teller for a break because I had money in their non interest bearing account for years and had never done this before. She said no.
I went to the manager and told her if they didn't refund the $29 fee, I want to close the account now. They credited it back.
So, to make a long story short, I have never paid an overdraft fee.
Neither should you.
 
2006-12-13 5:33:42 AM  
The reason these charges are illegal is because they're punitive, i.e. they don't represent what your transgression is actually costing the bank and instead they punish you, which noone apart from the courts is allowed to do in the UK :)

I think I'll be taking advantage of this soon as the second month in a row they've decided to charge me the full £30 for going overdrawn despite me paying money in the same day to avoid it. The really good thing is once you've been through the process you can do it again and again and they fast track your complaints so you don't have to go through all the hassle again.
 
2006-12-13 5:45:55 AM  
This was on the money programme on BBC last night, it wasn't just limited to checks bouncing, but every time a direct debit was refused, or every time someone went into unarranged overdrafts (even by a trivial amount) the banks charge on average £30 ($60) for each. There was some guy that had built up £12.8k ($25k) in penalty fees over the last 6 years), and several that had £5k or so just in one village that they surveyed - and they all seemed to be getting all or most of these back really easily, the banks were waiting until court cases were posted for the larger amounts, but then were caving in. Thousands of cases are being pursued at any one time, not a single one has been taken to court by the banks so far.

Personally my bank seems to be okay in most cases - I have an automatic overdraft facility that goes to £2k or so and just costs interest (at a moderately high rate, but no fees), so I don't have to worry too much, but I used to have a similar type of account years ago and feel foul of this trap when I was a student, so I have some sympathy for the people who are getting screwed like this.
 
2006-12-13 5:53:00 AM  
Epsilon

And due to a similar situation, I no longer bank with Wells Fargo.

In fact, every time I see someone using Wells Fargo I but in and tell them my story and encourage them to change banks.
 
2006-12-13 5:55:36 AM  
What REALLY irks me is banks that know you have checking and savings accounts, but no matter how many times you insist, when you make a mistake and go over your checking balance, they will not pull what's needed from savings. Instead, they invented overdraft protection schemes. You pay a fee of a couple of bucks every time it's activated and then pay interest... even if you have plenty of money sitting in another account.

This is precisely why I don't do business with banks any longer. Five credit union accounts, all but one of which will personally work with me when mistakes happen. And instead of "bouncing" checks, which are then re-submitted 2 or 3 times, resulting in a pile of fees before you even know it's happening, they'll cover the checks up to a certain amount, tack on their NSF fee, which is lower than most banks anyway, and I've even been CALLED when it happens. Personalized service has its benefits, and they truly earn my membership in doing so.
 
2006-12-13 5:58:26 AM  
The secret to not getting fees?

Have a prearranged overdraft facility that you don't use. Then, if/when shiat happens, you might be stiffed for a few pennies of interest but not a lot else.

Of course that does rely upon you not being a total retard with the finances.
 
2006-12-13 6:01:57 AM  
I'll present the other side of the story.

My wife works for a company called Intria and they do back-end processing for banks. Well, they do a lot of things, but that's my wife's department - investigations and the administrative stuff that's not in front of you when you are banking.

Long story short, I'd say it would be impossible to quantify how much it truly costs to refund these charges.

It's probably akin to a fireman's salary. How much are they worth when they're washing the fire truck vs actually fighting a fire? You are paying them to have them around and it averages itself out over time.

To say it costs 4.50 to cover a NSF charge is basically a number these people are making a best guess out of, but are pulling out of their ass.

My wife's department is always understaffed and overworked. Why? Because they don't generate revenue. If these charges were such a moneymaker, they would have more people checking this stuff. All they do is try to stop losses.

She could be tracking down $1,000,000 in the wrong account one minute and a bad NSF charge the next. Who's to say what it costs to do one and not the other? Even if you average out the cost to run the department I would bet you that it's a tremendous money-loser to figure the piddling fines/fees while it saves them far more than they lose when dealing with huge potential losses.

I'm not saying the fees aren't expensive. They are. But the fees aren't really the problem as much as the lack of a proper system to prevent it getting to the point where you have highly paid investigators reconciling a bunch of debits that came out in an unfortunate order.

The proper thing would be to not allow any charges to go through without verified funds available. And then if you are going to do it, force people to have a line of credit or a savings account tied to overdraft protection so that it won't be hitting them with fees. It's really a waste of everyone's time, and it should be handled at the branch level by $12/hr tellers, not people working in the back whose time is far more valuable and expensive.
 
2006-12-13 6:10:46 AM  
Wells Fargo and their check cards are the worst I've experienced with this.

Check cards are purposely designed not to reflect charges to your current balance until the vendor actually snail mails a copy of the receipt to them. This means that if you use your check card, the money doesn't come out of your account until after a completely arbitrary, variable delay -- anywhere from 48 hours to 2 weeks. If funds are not available at that arbitrary moment, they charge a $40 fee plus $5/day regardless of the amount overdrafted.

Supposedly, the point of not having to write checks is not having to keep an actual register. With normal checks you don't know when they'll be deposited, so you might have $800 in the account but you have $600 in undeposited checks floating out there, and you have to keep track manually. Check cards are supposed to eliminate this inconvenience, but in fact they actively exacerbate the problem in order to slam you with overdraft fees. There is no excuse, period, for the transaction to go through electronically but for them to wait an arbitrary amount of time to reflect the charge in your balance.
 
2006-12-13 6:23:55 AM  
I always wondered why some purchases reflect immediately while others take days to go through. Farkin' scam artists.
 
2006-12-13 6:31:29 AM  
peter_hook

To say it costs 4.50 to cover a NSF charge is basically a number these people are making a best guess out of, but are pulling out of their ass.

Of course, in the UK, the creation of these fees is almost entirely an automatic process, a computer notes you are overdrawn, creates a letter to send you, which is automatically printed and posted. No human intervention for the vast majority of cases - overall they estimated 80%, with bounced checks being the exception that makes up most of 20% where some limited human intervention is required, and then it is still something that is done in minutes. Where manual intervention is required on items as low value as this, it is always done by the most junior staff (who get near the minimum wage), so its not as if you have highly paid people poring over overdrafts and checks of such small amounts, its almost all done by machine.

The main issue here is that banks are trying to keep their current accounts free of fixed fees, despite the fact it tends to cost them money to run a current account with a low balance, as many people often have. So instead they use penalty fees to cover this aspect of banking, and then make a load of profit besides. Of course this means the costs of banking falls unreasonably on a limited group of people, rather than being fairly distributed among the unprofitable current accounts.
 
2006-12-13 6:35:40 AM  
Too bad this scam is alive and well in the United States. My bank's NSF charges have gone up $10 per violation in less than three years. And of course, they do debits before credits as well.

/paycheck-to-paycheck
//$2 overdraft shouldn't cost $38
///slashies are free!
 
2006-12-13 6:41:49 AM  
US Farkers: Can I ask about bank fees in the US please? One bank in the UK has announced that they will shortly be charging customers £10 a month for holding a current account (if they have under a certain amount in it). Their argument is that this happens in most other countries, and that Britain has just been lucky in the past. Do US banks charge you a fee for simply holding a bank account?

Just curious, really...
 
2006-12-13 6:45:15 AM  
Generally speaking, why can't you people just take responsibility for your own damn mistakes? Why can't you understand that getting overdraft charges is your own stupid fault? I am making this post because of being sick 'n' tired of people who don't want to accept responsibility for their own preventable mistakes and the consequences of their actions. Will somebody please tell me why you people think you shouldn't have to take responsibility for your preventable mistakes?

I have got to know. Why can't people understand that the best way to avoid overdraft charges is simple. Just simply don't write bad checks! It's that's easy! Why can't people understand that simple solution? Or is it that people just don't want to take responsibility for their own actions?

From the article
"They are not permitted to be a profit-making enterprise for any business. He believes if a penalty charge is higher than its administrative cost, it is illegal."

That would not have happened if you hadn't written a bad check to start with, skinbag.

whidbey wrote
"That sure would have helped a few years ago. Two occasions where I racked up more than 100 bucks in snowballing overdraft fees. Yes, it was my fault, but the bank still earns the title of "bloodsucking bastards" in my book, which, BTW, is bound in human skin"

In other words, you're too proud, vain and stupid to accept responsibility for your own mistakes. Why won't you accept it that said overdraft fees wouldn't have happened if you had kept a careful watch on your account and the amounts of the checks you write like any responsible person should?

Epsilon wrote
"Well on one particular Monday I was an hour late transferring money. I did it at 9:00 PM and the cutoff is 8:00. The next day, they hit me with $231 in overdraft fees for two checks and four debits over the weekend. The pisser is they put the biggest check through first, which overdrew my account by less than $10. Then they put through everything else and charged me $33 in fees for each one. And all the debits were small, like $6 at Burger King, $2 for a Coke and chips, etc."

Well, that wouldn't have happened if you hadn't made the stupid mistake of writing checks on money that was not yet in your account, skinbag.

TommyymmoT wrote
"A few years ago, I deposited a check for $40k in my business account, thinking I wouldn't be credited for it until the check cleared.
The next day, I took out $200 at the ATM, but apparently the check(from a company that I've never had any problems with) bounced. How was I supposed to know? The ATM said my balance was over $40,000. The bank SOAKED me in overdraft charges, and redeposited the check 4 times in one day, until it finally cleared. All in all, the whole thing ended up costing me close to $300.

That was preventable on your part. It's as easy as making sure the check clears before withdrawing $. Also, if the checked bounced, then the company youwere doing business with should be responsible for compensating/have to compensate you for the overdraft charges regardless of what some mere scrap os paper says.

This About That wrote
"Moral of the story: Banks are organized thieves. The thievery is so pervasive it is programmed into their computers, the overdraft charges game being only one example. The ATM machines are not up-to-the-minute with your actual account balance or with manipulations that go on behind your back. Banks have arranged custom-made laws to aid them in the overdraft scam. They can even yank funds out of your account weeks after you think it is safely deposited if an item you have deposited bounces, and they will tell you by snail mail, and charge you overdrafts for problems you can't possibly anticipate. The only antidote I know is to keep too much money in your non-interest-bearing checking account to cover such contingencies, which is all part of the scam. Bankers have black hearts big smiles and expensive lobbyists."

They are not. Please note that I said "they are not," not "*I* think they are not." Like I said above, overdraft charges are easy to avoid if you just don't write bad checks.

j0ndas wrote
My bank charges $25 for bounced checks (that it covers), and I've bounced a few times when low on funds. It's not enjoyable, but then again it's my fault unless the bank is holding my deposits for several days or something, and so far I've seen no evidence of that.

Exactly. Why can't the rest of you understand that?

DiamondSmasher wrote
All of you guys telling stories about how much you lost in fees...why did you put up with it? I overdrew a checking account once, 9 years ago, by a very small amount. I asked the teller for a break because I had money in their non interest bearing account for years and had never done this before. She said no. I went to the manager and told her if they didn't refund the $29 fee, I want to close the account now. They credited it back. So, to make a long story short, I have never paid an overdraft fee. Neither should you.

In other words you too won't take responsibility for your own damn mistakes and the consequences for your mistakes.

wic2ked wrote
The reason these charges are illegal is because they're punitive, i.e. they don't represent what your transgression is actually costing the bank and instead they punish you, which noone apart from the courts is allowed to do in the UK :) I think I'll be taking advantage of this soon as the second month in a row they've decided to charge me the full £30 for going overdrawn despite me paying money in the same day to avoid it. The really good thing is once you've been through the process you can do it again and again and they fast track your complaints so you don't have to go through all the hassle again.

Why? What is so horribly wrong with charging people with an overdraft fee that doesn't "represent what your transgression is actually costing the bank"? Like I said above, avoiding an overdraft fee is as simple as keeping a proper record of the checks you write among other things so you don't end up with an overcrafted account to start with. Translation, its your own damn preventable fault if your account's overdrawn.

peter_hook wrote
And due to a similar situation, I no longer bank with Wells Fargo. In fact, every time I see someone using Wells Fargo I but in and tell them my story and encourage them to change banks.

Why?! Why can't you people understand it that you wouldn't be gettong charged overdraft fees to start with if you just simply didn't write bad checks?! What is so damned hard about that?!
 
2006-12-13 6:45:30 AM  
Huh, well, this makes me appreciate M&I a bit more.

I've never had an issue with them debiting before crediting.

They typically give me a 1 day grace period for making a deposit to cover my debits, didn't know that was unusual.

/I'm probably just a lucky sob
 
2006-12-13 6:45:47 AM  
I don't care if the banks make money on charges if it keeps my current account fee-free. Let those who can't handle their finances pay for the rest of us to bank for nothing.

That said, these charges are unfair versus the actual cost involved, and if the banks claimed that reducing them would require current accounts to have fees, they are lying. They earn more than enough to cover this.

Truth of the matter is banks are looking for any way to start charging on current accounts (First Direct has already started), and if they can blame something (anything) else rather than their own greed, they will.

Current accounts should always be free- they use my capital to finance their transactions, and I pay them when I'm in debt. Cost of running the account should be covered by profit made off the money invested in the bank- as shown in their accounts, it does and then some.
 
2006-12-13 6:51:11 AM  
Cloudchaser the rainbow wolf

"What is so horribly wrong with charging people with an overdraft fee that doesn't "represent what your transgression is actually costing the bank"?"

imho nothing. But that doesn't stop it being illegal. It's a hidden profit-making charge currently criminally misclassified as an administrative cost.

Like selling stuff on eBay and 'padding' the postage charge
 
2006-12-13 6:52:45 AM  
Cloudchaser the rainbow wolf

In other words, you're too proud, vain and stupid to accept responsibility for your own mistakes. Why won't you accept it that said overdraft fees wouldn't have happened if you had kept a careful watch on your account and the amounts of the checks you write like any responsible person should?

You realise, as has been pointed out before, that banks deliberately lie to you to get you to write bad checks and go into overdrafts? For example they will display on screen, or in statements, that you have $500 when you in fact have $50 and $450 is being cleared, so if you write a check against it, it will bounce if its for more than $50 despite what the ATM, or a written statement from the bank says.

Why don't they show a value of cleared and uncleared funds when they provide you this information? Because then people wouldnt overdraw money as often, which would hurt their penalty generation scheme.
 
2006-12-13 6:57:07 AM  
A friend of mine lives in the UK. One day just before payday, he double checked his account balance, and withdrew most of the funds, leaving a couple of pounds in the account.

His bank sent him a letter warning him he was in danger of being overdrawn, and charged him 5 pounds as a service fee for sending the letter, to tell him what he already knew.

Of course this 5 pound charge overdrew his account, which resulted in a 30 pouns overdrawn fee.

Right royal bastards, the lot of them.
 
2006-12-13 7:01:45 AM  
I just got hit with $385 in overdraft fees for a, rarely used, bank account I don't even have a check book for. It's all from debit card charges. Apparently as a "convenience" the bank will allow companies to charge to your debit card even if the money is not there.

//no more auto-renewing domain names
 
2006-12-13 7:23:30 AM  
My bank has a three day grace period for situations like this.
USAA Bank is one of the few good guys in this regard.
 
2006-12-13 7:25:35 AM  
Jesus. If that was applicable to the states... I'd have a few grand comming back to me.
 
2006-12-13 7:26:08 AM  
peter_hook

I'll present the other side of the story.

My wife works for...



I'll bet she's really getting a kick out of most of these replies...
 
2006-12-13 7:32:10 AM  
Without invoking the dreaded "I work for" cliche, I actually worked in customer service for a bank for about a year back in the day. While the bank does do some shiatty things, the truth is, the majority of our customers did not keep a register of their personal checking accounts. Then, after several overdrafts, they would call the bank demanding the fees back. The fees were on a tiered basis, so repeat offenders were hit the hardest. The top tier was around $33 per offense. And people still refused to keep a running register. Even if they didn't want to do that, they could call us at anytime, toll-free, 18 hours a day, 7 days a week, to ask what their balance was.

As for Epsilon's story, that sucks, and in your situation it seems like the bank was screwing you. However, you admit you missed the cutoff time for processing, which doesn't leave you with much of a leg to stand on. Furthermore the processing schedule works like this. Credits made before the previous day's cutoff are posted first. Then the debits are processed, in the order from largest to smallest. While this may drive up fees in some circumstances, think of the logical benefits. If there was a limited number of funds in your account, would you want your Burger King debits to go through first or your electric bill? Yeah, lights are nice. They're especially useful for helping you see when you balance your checkbook.
 
2006-12-13 7:42:47 AM  
costas: Do US banks charge you a fee for simply holding a bank account?

It depends on the type of account. Where I worked, student checking accounts were free (gotta get fresh meat in the system), whereas the accounts aimed at middle-class adults charged something like $10-20 per month. There were often ways to get this fee waived. For example, if you didn't request copies of your cancelled checks and opted to get your statement electronically, you could get out of it. It was a way to encourage late adopters to get on the ball and cut down on the amount of paperwork the bank had to deal with. Sometimes you could get out of fees by keeping a certain minimum deposit. The best thing to do is to call your bank and ask.
 
2006-12-13 7:55:58 AM  
A lot of this crap could be avoided if the banks actually updated stuff in real time, properly, and if they actually refused charges once in a while.

No money in the account? Well you can't buy that, sorry. All that's needed is the computer system set up to reject the charges. Perfectly possible, I used to work on them myself. Then people would know when they've spent what they've got.

But then the banks wouldn't get to make money, so it'll never happen.
 
JDD
2006-12-13 7:57:59 AM  
XRIA: You realise, as has been pointed out before, that banks deliberately lie to you to get you to write bad checks and go into overdrafts? For example they will display on screen, or in statements, that you have $500 when you in fact have $50 and $450 is being cleared, so if you write a check against it, it will bounce if its for more than $50 despite what the ATM, or a written statement from the bank says. Why don't they show a value of cleared and uncleared funds when they provide you this information? Because then people wouldnt overdraw money as often, which would hurt their penalty generation scheme.


You just proved the point that you are a dumbass who can't keep a check register. The ATM doesn't know you've written a damn check genius. Of course it has to clear first. It doesn't even know you've just used your debit card at the gas station. Keep a record, and stop your whining. That is all.
 
2006-12-13 7:59:44 AM  
I work for a bank and I find all of your posts very amusing, or something like that...

But I do work for a bank, and I've seen the breakdowns in the past on what it costs the bank to process each overdrawn check, and believe me, we ain't making that much on them. The reserve costs alone, that the government charges us, by the way, probably eat up half of the fees, depending on out loan outstandings. As a matter of fact, we would rather close out an account of a repeat offender than make so-called enormous amounts of money on the fees. I'm in the process of closing out several accounts that we've collected hundreds in fees in the last few months because we just don't want to deal with them anymore. Screw the costs, people who are excessively OD are usually the biggest pain in the arses going. The time I spend with them going over their records compared to ours, correcting their ledger books because they can't add and/or subtract, researching the account to see if the checks were represented and paid, typing up cashier's checks for them because the people they wrote the bad checks out to won't take a check anymore and want guaranteed funds from the bank, I could be using this time to be out prospecting for new low-maintanance, low-liability clients; we like them the best.

Simple way to avoid most overdrafts...don't write out a check unless you have the funds available BEFOREHAND.

Second piece of advice, if you have online banking, use it, regularly, to check your balance and see what has been paid. Many mistakes can be caught early enough that way to avoid overdrafts in the next few days.

Third, if your bank offers overdraft protection, apply for it. If you are ever overdrawn and need the funds advanced from the OD protection, the couple of cents that you pay in interest will be much less than the amount you would pay in OD fees.

And lastly, if you are ever OD because of someone elses error, such as someone gives you a bad check, your bank may possibly be more willing to refund those OD fees if you don't have a history of unavoidable ODs caused by your own bad habits.

OK, I'm off to work so I can go spend the next hour or so calling todays ODs to get them to make deposits so we can pay the checks for them, and then spending the rest of the morning monitoring the accounts so when the deposits are made, I can make sure they get paid. Meanwhile, my clients who need to speak to me to borrow money from us for their businesses (I'm a commercial loan officer) will need to wait until I'm done with my ODs.
 
2006-12-13 8:03:21 AM  
Don't let your mouth write checks your body can't cash!
 
2006-12-13 8:09:03 AM  
Rainbowtyedye hit it on the head. Your $100 in OD fees pales in comparison to the interest the bank makes in a day off a single commercial deposit. If you repeatedly OD your account you are considered to be a nuisance. I had plenty of customers threaten to close their checking accounts and I cheerfully offered to connect them to our closure department.
 
2006-12-13 8:10:29 AM  
JDD it doesn't even know you've just used your debit card at the gas station

And there's absolutely no good reason for that, unless the transaction was such low value that it was put through offline and won't be settled until the next day.

That's the thing, the ATM really ought to know about it, it's just the weird "authorise now, settle later" thing the banks have going that screws it up. Does anyone know why they do that?
 
2006-12-13 8:10:38 AM  
Rainbowtyedye,

Quit being logical. That shiat does not fly here.
 
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