Posted on 01/26/2009 4:30:36 PM PST by rabscuttle385
If you were hit with an overdraft fee from Bank of America (NYSE:BAC) (or one of the banks it acquired) between 2000 and 2007, you may be in for a little cash.
Bank of America recently settled a class-action lawsuit that alleged it (and by extension, Fleet Bank, LaSalle Bank and U.S. Trust Company, which it acquired during that period) changed the posting order of transactions and embarked on other activities in order to increase the revenue it received from non-sufficient funds fees, overdraft fees and similar charges. The lawsuit, which was settled for $35 million, also alleged that the bank failed to warn customers that certain transactions were triggering fees. Even though Bank of America denies any wrongdoing, it is agreeing to pay up to $78 per account holder.
(Excerpt) Read more at smartmoney.com ...
So great, now idiots who bounce checks are getting free money.
As an idealistic law school student, I actually thought that a tort-based class action suit did some good for the public at large.
Indeed, at one time that was the case.
Today, the representing attorneys make millions while members of the class get a check for $3.00 and there is little to no change in the practices that made up the underpinnings of the suit itself.
Makes me sick.
They have paid this lawsuit before (and will usually refund you the fees if you complain enough, and don’t let it become a habit), BUT will they dis-continue the practice?
You obviously don't realize the sorts of dirty tricks that the big banks play with their customers.
Post transactions in certain ways to maximize overdrafts, drop signature-based debit card purchases off the account between authorization and final posting, games with funds availability rules, etc. For example, back in the day (2005) when I was a Bank of America customer, I put cash into my checking account and then moved it into my savings account online when I got home. And yes, the transactions posted in such a convoluted way that I got slapped with overdraft fees and low balance fees (most of which I got waived).
The fact of the matter is that consumer banking regulations are excessively complicated and banks are essentially fleecing households of money.
Yes and no... BofA was sited for doing some rather nasty things... For instance, if you made a cash deposit to cover checks, they would process the checks BEFORE crediting your account with the deposit, when they occurred on the same day. Another thing they would do would be manipulate the order of transactions, in order to maximize the insufficient funds fees.
I once had a problem where they tried to charge me a late fee on a credit card payment, but I had proof that the check had been processed BEFORE the due date. I've since gone to only making my payments with BofA using electronic transfers.
Mark
You are right, if you bitch and moan they will reverse the charges.
No, it is a return of fees charged by BoA due to their practices designed to generate fees.
They are known to hold deposits and charge accounts so that they can maximize NSF fees.
Then instead of one large check bouncing, they’ll work it to make several checks bounce.
It isn’t “free” money, it is simply a return of some of the fees wrongly charged.
Not quite... Start with an account with a $100 balance. Deposit $1000 in your BOA account this morning; do it in cash, at a teller. Your balance shows $1100, and that’s what the receipt from the teller will show.
Now that same day, 5 hours later, use your debit card to buy something for $900.
BOA will, when processing the transactions will consider the purchase as “earlier” than your deposit, so that you had only $100 when you purchased, meaning they did an “overdraft protection” for the other $800 you didn’t have.
Essentially they would consider all withdrawals happening first thing in the morning REGARDLESS of when they happened, and all deposits as happening at the end of business, regardless of when they actually happened.
I don’t know if they are still in business but there was a California couple that lived for the class action suit.
They hit mortgage and credit card companies hard. Fleet lost and laid of thousands. Then I got a check fo 39 cents. I kid you not.
I am glad to see BoA whacked with this, however.
Then apply the customer's deposit.
Been there and done that. Deposit or transfer cash funds in the morning...pay bills online in the afternoon...see overdraft fees of $120.00 the next day. Yeah...they can play games even with the simplest of transactions.
The formula is quite simple:
Never write checks that total an amount more than the amount of cash that you have in your checking account.
Or you can run your finances by writing hot checks (stealing).
No, this really is a scam. If they put your charges in order, they would probably get one overdraft fee for the item that went over the limit. And that would be fair.
But BofA likes to pay off the big charge first, leaving a whole bunch of small items, each with its own overdraft fee.
Do you need a reading lesson or did you not bother to read the posts?
That is why there is a sign posted at the teller window and driver thru that reads "Money deposited after 3:00 will not be posted to your account until the next business day.
Again, simple rule, Do not spend more money than you actually have in your account.
Several years ago, I had $2500 in a BOA account with a $3k deposit that should have been added in first thing friday morning, giving me a balance of $5.5k, MORE THAN ENOUGH to cover $3800 worth of checks that were clearing on the same day.
HOWEVER
BOA took the checks out FIRST (even though the deposit had been transmitted thursday evening and was sitting there waiting)..they took out the clearing checks in order from highest to smallest (4 small bounced checks produce more revenue than one big one), THEN gave me the deposit..
I threw a tantrum like a 2 year old, in a BOA branch..in order for me to quiet down in front of customers, they refunded the check fees, admitting “an administrative error”. Once they gave me the funds back, I immediately closed the account and moved to wachovia..NEVER had that problem there..
those were the last checks I ever (non)bounced..
Look at my previous post.
I put cash into my checking account.
I then went home and transferred funds into my savings account from my checking account.
Bank of America's computer systems moved money back and forth between my checking and savings accounts in highly contorted ways (my savings was set up for overdraft to checking at the time) that ended with an overdraft fee AND a savings account low balance maintenance fee.
Try explaining how I got slapped with fees anyways, including a low balance fee on my savings account that I discovered too late to contest.
$78 bookmark
Yes, I understand BoA’s procedures and will not defend BoA.
However, there is no reason why a person should spend more money than they actually have.
I do the ATM and they tell me what funds are available.
capital one got nailed for reporting customer balances on credit cards as their credit limit..i.e. you put $100 on your card this month, they’d report your limit as $100..
this effectively increased your debt ratio and the credit score was lowered since you were “max’d out” on the card..
they lost the suit and now report normally..
No, it's not free money.
I already paid them the multiple 39.00 overdraft fee because they posted the largest item first and bounced all the other ones that should have cleared.
If I spent 8.00 for lunch and $4.00 on the way home for milk on my debit card and then the next day I screwed up and forgot the check was 500.00 instead of 450.00 and it bounces that night with the other two debit charges, I get banged for all three even though I spent the money hours, sometimes days earlier.
I would be happy to pay the one fee, for the over drafted check, since it was my mistake, but that's not the way it works
The problem is that you "have" the money but you "don't"...and BofA changes the status of its money and orders transactions to maximize its fee income.
None of the other big banks did this to the level that BofA did.
bump
Never write checks that total an amount more than the amount of cash that you have in your checking account.
Or you can run your finances by writing hot checks (stealing).
Just make sure that you've always got your deposit slips to prove when you actually made the deposits. I've been hit with NSF fees when I never actually ran low on money in my account. It wasn't with BofA, but I had to go back and show my bank that I had made a cash deposit more than 3 days before the date that the checks were processed.
Mark
yeah, a month or so ago I bought a pack of cigarettes for $4.50, but it cost me $144.50!
A.P. Gianinni would fire the lot of them.
Not necessarily, as a previous post pointed out, you deposit $1,000 in the morning, your deposit slip shows you have a thousand, then in the afternoon use your bankcard for a $900 purchase and they count the debit before making a final post of the deposit thus charging you overdraft fees.
I don’t even own checks. I strictly use bank cards. At least if I get an over draft now, it isn’t more than one purchase because the bank card will decline after that.
I have had this happen and in that amount too. One of the things that makes me mad about banks is they hit you with big fees and act like they are punishing you for being naughty somehow, but that fact is if no one had any overdraft or NSF fees for about a week, they would all go belly up.
My daughter overdrew because she thought the ATM card was also a MasterCard account. The fees for overdrawing $35.00 in three transactions came to $250.00. I bitched and moaned and they dropped the fees.
ATM cards as debit cards are dangerous. They can be used without a PIN number and your account could be cleaned out. I request an ATM only, no debit.
I guess you never had a mortgage.
Then you failed to understand the cited examples.
Worked for Wells Fargo for four years going through college. When you have your first overdraft and you try to get it overturned, they will snicker like a guard at Dachau. Also, they will tell you that you are a “new account” which means you will be subjected to holds on large checks. IMHO, when it comes to checking and savings on a consumer level, small banks treat you way better. WAMU got a lot of business from WF because they simply didn’t crucify you for over-drafts and fees.
Already did that and moved to another bank. Been w BoA for 10 years have the last two were very frustrating.
Screw them and anyone that works for them.
Yes, the primary checking account I now use has been in existence for more than 25 years and that same account has been at five of six different bank names which at this time is at Bank of America.
The original bank was a neighborhood bank and the president of that bank lived three doors down from us when I was a kid and when I opened that account.
When the bib boys took over that bank, I knew that I no longer had a connection with the officers of my bank.
I bounced one check when I was 18 0r 19 and have never bounced a check since.
And that is why they LOST this class action lawsuit. It turns out that money deposited BEFORE 3:00 PM will not be posted until the next business day, either. At least in terms of timing your payments and deposits.
False advertising, you know...
No, I did not fail to understand the cited examples and did not condone the actions of BoA. However, I have for a long time understood how they operate and would never put myself in a situation where I wrote a check that I was not 100% sure would be covered.
Good move on your part. Bank of America is a pretty vile place to do business. They’ve built just an endless stream of tacky little fees into their services. Much better to go with regional banks, IMHO. I never deal with the nonsense with them, it seems.
If that is the case, nail them. However, it does not excuse the practice of living paycheck to paycheck and having your paycheck chase your mortgage payment in your bank account.
Spend less money then you actually earn and these problems are less likely to occur.
By following that rule, you will build up a cushion in your checking account and may even start to build savings.
And yes, I have had some very lean years in my life where I worked 80 hours a week and still eat rice & beans, peanut butter or Ramen noodles every night.
BOA rearranges deposits and debits so that it doesn’t matter if you have the money to cover the checks/debits. They sometimes hold deposits to allow NSF charges that shouldn’t be there.
Before or after inflation?
This is what BoA is doing right now....they are thieves and liars hiding behind a corporate shield and psuedo-self righteousness....
BoA isn’t the only one smacking of self righteousness on this thread!
Before, during and after inflation.
You simple spend less money than you earn.
And yes, you may have to cut back on your spending.
I think the last thing we need on this thread is someone lecturing us on not spending more than we make...especially since that is not the topic nor the problem with BoA!
There’s a difference between income vs spending and cash flow but you just don’t seem to get it no matter who or how we tell you.
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