How Banks Are Routinely Screwing Us :: A Recent Personal Experience

I have my own consulting practice and with the economy in a steep slide it is getting harder and harder to find new projects and harder still to get paid for work I do. This puts a serious hurt on cash flow and makes for an unpleasant amount of stress. If I had a dollar for every 'The check is in the mail' conversation I've had with clients I wouldn't have a cash flow problem.

Very recently I had a very severe cash crunch. The good news was that I knew I had a really large check coming. After endless pestering my check was finally ready. Rather than have them mail it I dorve to pick it up. Becasue things were getting down to the wire I needed to get that check to clear as quickly as possible.

I went to a branch of the bank against which the check was issued. It was a large check (well over $50k). I asked that bank for $5,000 in cash and the balance in a cashiers check. Becasue I'm not a customer there they said they could not sell me any 'negotiable instruments' other than a cashier's check made out the same way as the business check and for the same amount. I half-heartedly told the teller that I'd take it all in cash then and she quickly (and uncomfortably) told me they don't have that kind of cash available. So, I had to settle for a cashier's check for the full amount made out to me. For which I had to pay $10.

Next stop was a close-by branch of BOA (my bank). I went to to the window and explained that I needed to pay 2mos mortage out of the check I was presenting and deposit the balance into my checking account. This is when I found out that a cashier's check is not one bit better than a business check. None. BOA told me (and yes, I spoke to everyone in the branch) that they could only deposit the check to my account. $5,000 would be available the next day but the balance (over $60k) would not be available for 2 weeks. Despite my protests of it being a cashiers check from a local bank I was assured 'that is the way it is'.

This all occured last Thursday. Now, my February mortgage payment is due now. My 'grace' period is up the 17th. The rest of my funds won't be available until after the 19th. Which means BOA gets to charge me a late fee on my mortgage despite their having my funds 'on hold'.

My wife, bless her heart, hates this kind of crap. She got on the phone this morning and contacted the issuing bank to see if the check had cleared. It had. Last Friday. She got them to FAX her a copy of the front/back of the check showing it had cleared.

I went to the local BOA branch and sat down with the manager. I explained my frustration with being late for my February mortgage payment casue they hadn't released the funds from my deposit. Also, that we had a credit card and lines of credit for which we were being charged interest while we could not access our funds. He explained that that is how the banking system works. It takes a while, he said, for the bank to collect the funds. I explained that it was all electronic and should take no time at all. He was unmoved.

Then I took out the copy of the deposited --- and cleared --- check. I showed him it had cleared the day after it had been deposited and asked for an explanation. After a couple phone calls and more telephone button pushing then I had ever seen before he released my money.

Can you imagine how much money banks make by this 10-business-day hold they put on checks when they collect the funds within 24hrs?

Welcome to our New World Order! Wait until you do something that TPTB don't want done. Then you may disappear entirely.

respectfully

reluctantpawn

My bank holds personal checks for 3 days, putting a small percentage of the amount available for use. It puts no hold at all on payroll checks. I've always thought it was BS. Take the name off of the check, look behind the process, and what is the difference.....nothing, nada, zilch....the checks are treated identically.

You know the 'golden rule'......thems that has the gold, makes the rules.

reply to post by jtma508


I've never heard of a bank taking 10 days to clear a check. In the past, I've seen large checks clear over a period of about a week, in increments. I switched to Commerce a few years ago and now I get money instantly. Same day funds. (next day if the deposit is made late in the day). The banking system is a nightmare and the only way to get around the myriad of rules and hold-ups (pun intended) is to become very friendly with the branch manager or the next in line. I no longer wait on lines, I no longer worry about the banking nuances that would normally make me crazy, I no longer get hit with fees of any kind and, in the event that something does hit the account, they reverse the charge. I'm no big depositor in the bank, I do give them business but nothing the manager can brag about (he tells me this whenever he can). I do, however, make a point of saying hello to him whenever I am in the bank, regardless of whether or not I need his help. I do sit down and b.s. with him about the Mets (he's a big fan and he took me to the playoffs two years ago when a friend cancelled last minute).

Treat them like a friend and they will do the same. Know the names of as many people as possible, try to always hit the same teller when you go to the bank. Familiarity and a friendly manner about you will result in their being more eager to help you.

Nightmare, indeed.

See for example:

Suit: Wachovia ignored scammers

Wachovia Corp., the fourth-largest U.S. bank and the biggest bank in the Lehigh Valley, was accused in a lawsuit of ignoring fraudulent telemarketers who used the bank to help them steal millions.

E-mails and other documents filed in April in federal court in Philadelphia show Wachovia employees knew of claims the telemarketers were using ''demand drafts,'' or unsigned checks, to steal from their victims, the plaintiffs claim in the suit.

...

The suit seeks to represent victims of the fraud nationwide who had demand drafts on their accounts deposited into accounts at Wachovia from June 2003 to February 2006.

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