Watch Your Back: Banks/Credit Card Companies Have Found Yet Another Way

As one door is closed to them, unethical banks will surely find another. That's what I shared with my senators and representatives when writing to them today. I've been using banking cards for a very long time. And never has a bankcard allowed me to get money I did not have.

Well, those days are apparently over. My teen-aged son used his new card from his new bank account to withdraw money. When he accidentally attempted to withdraw more money than was in his checking account (but rather in his savings), the machine gave him money - and not just once.

The bank then charged him over and over before letting him know that he was overdrawn.
My son and I visited the bank. Do you think they were willing to give him his money back or do a simple transfer of funds to rectify the situation? They told us it would nearly take "an act of God" to help us out because they have their rules and processes and customers need to keep up with the changes, including the role credit card companies now play at bank machines that are out of bank control. I asked her who received the penalty money. "We did," she said. "Then you're in the loop" I replied. "And you're responsible." I then explained that my family has rules and processes too that include a bank operating with integrity if they are going to retain our business.

My son was given half of his money back, but they are insisting upon keeping the rest. We'll see.

If I were you I'd watch my back. They're obviously now trying to get the money from the little guys in new ways - even teenagers -- money their fat cats absconded with both before and after the bailouts. My bet is that banks like this are hoping that a lot of people low on their luck will be overdrawing and that by letting them do so, they'll be able to put these people further into debt with penalties. Then there are elderly or infirm people who may not keep their own records and don't know which account has money.

It's a slick and sick move. People assume they won't be allowed to overdraw - that the machine will refuse to comply. And it's that assumption, common and reasonable, that allow some banks and credit card companies to quietly steal from their customers.

So when your son or daughter opens a bank account and they happily give him or her a card, be wary. And if you assume that your bank is going to stop you from accidentally overdrawing from the wrong account or one without the amount of money requested, think again. Your bank might be counting on that assumption. If so, they don't care if you're a kid, if you had money to cover it in their bank or that you've been a great customer. You lose. They win. So watch your back.

Dr. Reardon also blogs at bardscove.

Comments

[Mephili]

Banks rob more money than bank robbers.

[generationyes]

You ain't just whistling dixie.

[Pavane]

Nope. It's the Tune of the Bank Robbers.

[ZanIts1984]

I have had that situation happen to me more then once in the past years. I'll admit that I was ignorant when it came to money. I always just assumed that the bank would stop me from withdrawing money if it wasn't in my account. Wrong. I would go and use my debit card, that would be approved, not knowing that each transaction was being penalized since there were no available funds. Then I had a bank statement claiming that I owed them over $400 to cover the withdrawals and the overdraft fee's. I put trust in the banks, particularly Wachovia. I eventually switched to a smaller Credit Union. If I try to use my card not knowing I have no money in my account, the Credit Union won't allow the transaction to happen. If I did overdraw, the fee is not as hefty but it would only be one overdraft fee since the bank would not let it accumulate. The larger banks never cared.

Banks I thought were suppose to inspire confidence in that your finances were safe with them. Not anymore. I have chosen to put my money in a smaller bank who are more hands on with their customers. They solve my complaints, as few as there are, with no problem at all. Unfortunately, young adults that are as ignorant as I was until they are hit in the head by a 2X4 of penalty fee's. In this economy, that could be catastrophic for many.

[JnrNorman]

Make sure when you start a checking account that the account is set not to give more money at the atm then is in the account.

[PS9]

Your son should also read the receipt each time he withdraws.

That would clearly show the balance in the checking and savings accounts.

No sympathy here. I hope but am unsure he will learn a lesson.

Sorry.

[generationyes]

I don't understand why acknowledging he has responsibility means "no sympathy here." We should have empathy for others - it's not a character flaw. And he's a teenaged boy fer gawd's sake. Jeez.

[NedFlanders19]

On a positive note, at least we bailed them out with our tax dollars after they "made" bazillions. At least now they are able to use those tax dollars to lobby against changes to their practices. At least now they are figuring out more ways to screw us out of every last cent. At least there have been no consequences for the CEO's who created this mess in the first place. At least now the government is ensuring that more money goes to these black hole too big to fail organizations. At least now we have legalized usury.

This whole deal has been like putting a band-aid on a gunshot wound. When Obama spoke of change, in this regard, I didn't realize he meant it was with a small c.

[TJCole]

Until we Nationalize these major corrupt banks, we are only throwing good money after bad..!

[mjc]

The greediness and sly means companies as well as banks will use came home to me in a big way this Thursday. I was told by a very sweet woman on the phone...Amazon customer service person.....that if I was interested I could get an Amazon credit card. I could use it to buy goods from Amazon...I was interested in a tv which they knew because I had been researching them for months. The charge would not carry an interest rate and if paid in full at the end of six months would free and clear. So two weeks later I got the card and the fine print..which I read. There was nothing there about the six months moratorium in the literature and I called. "That is a promotional program". "When you put the item in your shopping cart, the promotion will say that, if you are qualified." "It is only available on certain items, like tvs." Finally, you may be subject to third party promotions. I simply told them I didn't need such a black hole for credit. You HAVE to read the fine print; trust nothing that is just spoken on the phone; don't be impressed with big companies who sound like they really care about you.

[quindy]

Few years back I got bank card from WaMu. I was told that overdraft is impossible. I charged four coffees on my card and got slapped with $120 overcharge. When I complained I was told that I don't know how to manage my finances. I insisted to get my money back. They gave me half. I told them that I will take it and that I will report this to our attorney general Eliot Spitzer. (Yes, that Eliot Spitzer who was brilliant lawyer and who should come back to chase the crooks.) It worked like magic. I got a full refund and immediately closed that account.

[faceplant]

Overdraft is of course possible, as long as the bank thinks they can make it pay. They probably sent you a notice that their policy had changed, in microscopic type on the back of a statement, the month after you opened your account. It really is on you to keep track of the funds, so they have no excuse to screw you. I always try to keep a pad on my checking account balance to cover anything overlooked, unforseen, or miscalculated. I don't balance my checkbook as often as I should, but I keep a running total of checks written and ATM withdrawals in my head all the time. I've been overdrawn once, by about $10, about 17 years ago. My bank probably considers me a lousy customer they'd like to be rid of.

[peterg76]

It's simple old-fashion fraud. They know they'll be forced to stop - they're counting on raking in as much as possible until then.

[Kathleen Reardon - Huffpost Blogger]

Peterg76: I'd say that's the plan. And if it can be done to people without the power to fight back, all the better in their minds.

[BarryS]

My bank refused to NOT give me overdraft "protection", that is protection of their profits. How about ending this abuse, and fining the banks [not 100 dollars, but 1000000 per instance, taken from the CEO's pay for each and every instance. Also, rename it fraud and remove the corporate cloak from imposing it. We will soon have plenty of empty cells at Gitmo.

[babyboomerorig]

This is why I stay where I am and throw away credit card offers that come unsolicited in the mail.

We're lucky. The gentleman we've dealt with at our bank for the last 15 years, knows us. He knew when my husband was injured on the job. He's backed us when our monthly income was $600 and we needed medicine. He's returned overdraft charges simply because we talk to him at least once a month. He let a car payment slide when my husband went through his first congestive heart failure episode because we didn't know how much was going to be needed for meds and said if he could help any more to let him know.

This is sooooo rara and, believe me, we know how fortunate we are.

[lacitepq]

Thank you for making consumers aware of these institutions and the many ways they try to extract fees from us. Unfortunately a lot of people aren't so financially literate/saavy and don't read the fine print, but that doesn't mean they deserve to be ripped off. The rules are written to favor the businesses and they continue to become increasingly complex. I keep all of my money at a credit union and don't do business with the national and larger regional banks and pay $0 in fees even for ATM withdrawls.

[Kathleen Reardon - Huffpost Blogger]

Lacitepq: That's true about the fine print -- the ever-shifting fine print. The problem now is that even if you read it today, next week it will change. There's a niche for honest banks, but we'd be hard pressed to believe them. Somebody could make some honest money while helping other people keep theirs. K

[birdie2]

This happened to my son also, and we specifically refused overdraft protection.

[CAPTAINSKIPPY]

Our experience has been similar - any overdraft is the bank's opportunity to levy excessive fees and charges, to earn profits on a new generation of inexperienced customers under new and grossly unfair "procedures". It's time to re-assert our authority to write appropriate banking laws.