New law on ATM overdraft fees goes into effect this weekend.

Bank customers get break from ATM overdraft fees

Beginning Sunday, banks and credit unions no longer can approve and charge penalty fees for one-time debit-card purchases that exceed customers' account balances unless the account holders have agreed to "opt in," or accept overdraft coverage.
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For years, banks simply had denied these transactions. However, by allowing them to go through without the cardholders' consent and charging $34 for the "service," standard or "courtesy overdraft coverage" reels in more than $10 billion in debit card fees each year, the center estimates.

Even better, when debiting a day's transactions from your account, some banks (such as Bank of America) will actually make sure to process your biggest payments (checks and debit cards) first, regardless of when they came in, so they can deplete your account quickly and ding you for as many overdrafts as possible. AND, if you've had a few overdrafts, they'll put a hold on future deposits for as long as a week. That way, they won't hit your account and as a result you get even MORE overdrafts.

A 2008 survey by the FDIC found that 81 percent of banks allowed overdrafts on debit card transactions and ATM withdrawals, but only 8 percent informed customers of their cash shortfalls before the debit card transactions occurred. Only 23 percent did so on ATM withdrawals. Advance notice would have allowed customers to cancel the transactions and avoid the fees.

It is truly sad that so many personal, corporate and banking fortunes are made by simply manipulating money while contributing nothing to society. At least this is a step in the right direction.


[edit on 8/12/10 by mothershipzeta]

I opted in.

The way I understood the option was that if I opted out they would basically freeze my account at a certain amount to ensure I don't go over.

I don't know about others, but sometimes I need every dime I have in my account.

[edit on 12-8-2010 by jam321]

Overdraft is like a stupid tax.

I like how they try to spin it into an insurance. Calling it "overdraft protection."

I opted out when I got my letter from my bank. I guess they didnt believe me because they called not long ago to make sure.

They said "well, without this protection if you're out shopping and you buy something you dont have the finds for the sale will be denied."

I answered "if I dont have the funds what the hell am I doing going shopping?"

I got a laugh with that.

The frustration of knowing I live among raging imbeciles and their stupidity shapes my reality via policy and law compounds daily.

I welcome this. In fact, for years I tried to opt OUT of this kind of "courtesy" and got nowhere.

If I make a mistake in my balance and then try to use my card to pay for something and don't have enough money, I'd rather just be told that at the point of sale instead of having them do me a favor and extend me credit I don't want...and charge me through the nose for it repeated times when their multiple $25 or $30 fees in addition to my mistake snowball as a result of them letting me go "over."

The way my banks harassed me about opting in...emails, calls, snail mail makes me wonder just who this opting in is really benefiting anyway. I was sure they stood to lose hundreds of billions on fees.

[edit on 8/12/2010 by ~Lucidity]

I opted out as well. I rarely use checks due to how long they take to get cashed sometimes and I'd rather get my purchase declined than not realize I'm a penny short while the bank cheerfully tacks on 15 overdraft fees and holds my deposit as long as they possibly can.


Posted Via ATS Mobile: m.abovetopsecret.com

The banks fought this tooth and nail with lobbyist and special interest groups. this was their bread and butter, free money!

I am glad they didn't win this one, count this as a win for the small guys.

But I gave up using banks awhile ago, so personally, it will not affect me. My 'credit' is whatever I save up for.

No longer a slave to my credit score.

Originally posted by thisguyrighthere
They said "well, without this protection if you're out shopping and you buy something you dont have the finds for the sale will be denied."

I answered "if I dont have the funds what the hell am I doing going shopping?"

lol, good one.

My bank never asked me, I suppose that because I already have overdraft protection on my accounts, so I guess I've automatically opted in or out?

Even though I haven't bounced a check since I was at university 25 years ago, my bank doesn't charge for overdraft protection, they just transfer money out of my savings account to cover any shortfall, so it seemed like a sensible thing to add. Though I suppose I should look to see if they've changed that policy with these new laws.

I think it's a shame that people are so irresponsible and negligent with their money, that they have to even introduce this.

For all the talk about rich, immoral banks ( justifiably ), we don't exactly do ourselves any favours by giving them free money in the form of overdraft fees and getting penalised for carrying out transactions with money we don't have.

If people kept track of how much money they had in their account and avoided needless credit, then the bankers wouldn't be quite so rich !

Originally posted by ErEhWoN
But I gave up using banks awhile ago, so personally, it will not affect me. My 'credit' is whatever I save up for.

Do you mean that you only use cash and store it in a coffee can or something? I'm not being sarcastic, I'm just wondering at the logistics of not using banks at all. It doesn't really seem feasible any more. People look at me like I'm from Mars if I write a check instead of using my debit card, and the only reason I think anyone uses cash here is because of the Canadian / American conversion benefit.

reply to post by thisguyrighthere


Do you bank with Chase? I've been getting letters from them pressuring me into accepting their "discretionary" overdraft approvals, which, if approved, you don't deposit within the same day or something, they ding you. It's neither here nor there since I've never overdrafted myself. The only incident was the merchant's fault and was promptly cleared up.

Originally posted by EnlightenUp
reply to post by thisguyrighthere

 

Do you bank with Chase? I've been getting letters from them pressuring me into accepting their "discretionary" overdraft approvals, which, if approved, you don't deposit within the same day or something, they ding you. It's neither here nor there since I've never overdrafted myself. The only incident was the merchant's fault and was promptly cleared up.

I just opened a "household" acct with Chase, specifically for the purpose of bill paying via the internet/ auto debit, etc. They continually pressured me to agree to overdraft approve and I wouldn't...why would I agree to let them ding me for 35 bucks? If I were in a position to make a deposit that day, then I would WAIT till after the deposit to make that purchase anyway.....despite the fact that this account is ONLY to pay bills out of via check or bill-payer online anyway, I would hardly ever need to use debit card out of this account. Crazy.

What is really crazy is the EXORBITANT AMOUNTS THEY CHARGE for their ahem "services......"
The truth of the matter is that these banks have the gall to stick it to us for things that computers do automayically as programmed!
It is no extra trouble to handle much of what they charge for, and it is criminal that they are allowed to set raters for sevices independantly without sufficient goverment oversight.
Why can i get money at an ATM for 1.50$fee, but the banks want 2.00
to get the money from an account at another bank.....
The extra fifty cents is a penalty for not having an account with the bank whose automated teller you go to.(as far as i can see...)
Why are these service charges not standardised and limited by regulations?
The field is wide open for the banks to suck free money off the people whos money IS the banks capital!
It is an egregious obscenity how they operate.
In so many ways making or breaking peoples lives on their whims and greed.
The hypocrisy of it all staggers the imagination....how easily we are forced into supporting these blackgards !.

Chase was one of the accounts I was referring to as well. Based on the amount of emails, calls, and snail mail I got from them about this, I have to assume they spent millions. You know this is going to ding them.

I was trying to remember when this practice of covering and overdraft and charging exorbitant amounts of money actually even became the norm, because it didn't used to always be that way. Quite the opposite in fact used to be true...if you wanted the protection, you had to pay for it. At some point in the mid-2000s it seems to me this changed.

credit is for suckers. your credit score is an imaginary number used to keep you living a life of corporate servitude. if you spend your whole life chasing material things and petty little status symbols you are gonna wake up one day and realize that you never really lived a day in your life. life is too short to spend it entirely in the pursuit of junk.
www.abovetopsecret.com...
i'm not sure if most of you are familiar with hunter s thompson mostly known for writing the book fear and loathing in las vegas. well later in his life he published a book called the rum diary, which was about living in puerto rico (i believe, not quite sure) and in it he talks a lot about his thoughts on the rat race. i remember one paragraph jumping out at me in particular, and i'd like to share it with all of you. "I sat there for a long time, and thought about a lot of things. Foremost among them was the suspicion that my strange and ungovernable instincts might do me in before I had a chance to get rich. No matter how much I wanted those things that I needed money to buy, there was some devilish current pushing me off in another direction- toward anarchy poverty and craziness. That maddening delusion that a man can lead a decent life without hiring himself out as a Judas goat." and another is "The scene I had just witnessed brought back a lot of memories – not of things I have done but of things I have failed to do, wasted hours and frustrated moments and opportunities forever lost because time had eaten so much of my life and I would never get it back."

reply to post by Sherlock Holmes
I was a member of a credit union once and I didn't have any checks, but I had my debit card. What was really bad was that charges sometimes wouldn't show up or debit my account for up to 3 weeks. I didn't have a check register, so all I had to go by was an estimate of how much I've spent and looking at the balance of my account.

Yes I could have made a spreadsheet or something, but I was young and I didn't know any better. I thought the balance on my account was always correct, maybe a day behind.

Long story short I didn't make a lot of money so for awhile I was in a vicous cycle of overdraft fees. I think when it hit I had overdrafted around $180 over I believe 5 purchases. All my purchases from weeks prior "cleared" on the same day. So I paid at least $150 in fees, but that's not where it ended. Because of the delay of some charges over weeks and not others from whatever reason I got hit with another overdraft the next day before I even had money to pay off the day before's fees.

Because of this I think I ended up paying $500 in overdraft fees and lived off of campbell's soup and ramen for about 2 months to catch back up and I could barely afford those items.

You live and learn I guess, but many people seem to think the way I did, at least once. The good news is that since then I overdrafted once because I transferred too much from checking into my savings by about $3, so now I have it set up to take out of savings if I accidently miscalculated again (paid $33 for a $3 purchase, so 1000% interest for less than a day of a "loan").



[edit on 12-8-2010 by Zaxxon]

reply to post by EnlightenUp


Not Chase. Oddly enough I took my money out of one of those big national type banks and put it in a small local bank. So it was the local bank that was trying to sell me on overdraft.

I wouldnt be surprised to find out that the local bank is just a small part of some giant national bank though.

reply to post by Sherlock Holmes


I understand where you're coming from, however - it isn't always as simple as irresponsible money management. I had a problem with a company that i paid my monthly bill to via auto-draft. I had authorized this company to debit my bill payment on a certain day of each month. One month, for reasons i still don't have an answer for, they chose to debit my payment at an earlier date. I, of course, did not find out about this until I started receiving overdraft fee notices from my bank. I explained the situation to them, and basically got "not our problem - take it up with the company that did it". The entire situation was a massive hassle and took weeks. I eventually got MOST of my money back, but nonetheless, this was an embarrassing and frustrating situation and it had nothing to do with how i managed my account. Just sayin!

Oh, and like others have said - I had NO choice about having the "overdraft protection" it was just SOP for my bank. Glad to see a new law that doesn't make me want to stomp and fume!!

reply to post by ~Lucidity


I took on a well known and popular UK bank i had an account with (briefly) and won my charges back, after threatening them with litigation.

They know they're crooked, and they do NOT want bad publicity.

They did to me, what other posters have said they do.

I ended up with - get this - £320.00 in O/D fees because i went overdrawn on a purchase made with a debit card.

How much had i gone overdrawn?

The grand sum of £0.62...62 pence! And i had a cheque waiting to clear.

They tried to 'fine' me £320.00 for an O/D of less than £1.00!

I pointed out, that i was using a debit card and as such only payments that can be covered by actual funds in my account could be authorized, and basically, if the money is not in the account to pay the transaction, the transaction should not be accepted.

The letters, phone calls and threats of bankruptcy, threats of counter-suits, messing with my credit rating for years to come all ensued over the months it took to get these crooks and thieves to accept defeat.

In the end, i basically told them to go and...'have sex with themselves' and any further contact should be made through my solicitor.

In the end, they zeroed and closed the account, with their corrupt tail between their legs.

Don't let these bastards fleece you, take your money out of their accounts and put it into a honest bank (if you can find one).

Originally posted by spikey
reply to post by ~Lucidity

 

I took on a well known and popular UK bank i had an account with (briefly) and won my charges back, after threatening them with litigation.

They know they're crooked, and they do NOT want bad publicity.

They did to me, what other posters have said they do.

I ended up with - get this - £320.00 in O/D fees because i went overdrawn on a purchase made with a debit card.

How much had i gone overdrawn?

The grand sum of £0.62...62 pence! And i had a cheque waiting to clear.

They tried to 'fine' me £320.00 for an O/D of less than £1.00!

Isn't it illegal for UK banks to charge exorbitant amounts for overdrafts?

en.wikipedia.org...

In 2006 the Office of Fair Trading investigated the charges being imposed on customers of credit card companies. In its report, the OFT said that many of their default charges were unlawful, as they constituted unjust enrichment. It stated that it would act upon receiving notice of any charge over £12 as a penalty, and therefore unlawful.

"Unlawful enrichment." If there's a better way to describe banking practices, I haven't seen it.

Now US banks will just start calling overdrafts a "service" rather than a "penalty," but at least you're required to give informed consent for that "service."

reply to post by spikey


It's a horrible thing for people who run close to the low on their accounts. The same thing happened to my son...they racked up about $400 for and .18 overage when he bought a soda for $1!!! Same thing happened to a friend for $2. I think they did what someone above said to her...took out a higher charge first so that about 12 smaller ones bounced, while they tacked on their $25 fee for each of the smaller ones. Both cases are still in litigation after two years. I believe there is a limit of about $500 the bank may incur, but that a lot of money to a lot of people. Some "favor," eh? Good work on your case! We're not letting them get away with it.