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The $36 soda: Overdrafting in America

banksimple.com

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Re: The $36 soda: Overdrafting in America

#41

Post by jeffool »

backprojection wrote: post #39
bdhe wrote: post #6

Earlier quoted context omitted.

It's a very easy trap to fall into if you're living check to check and make even the slightest mistake. In each such story online, I've heard a claim that they specifically have algorithms to maximize the penalty fees on these mistakes. Its another instance of a practice that disproportionately affects the poor. Unless you're living paycheque to paycheque, you would never even bother looking into such niggling detail…

What bothers me the most is that there are engineers who will use their creative skills in such a way. Their precious human capital could be used to create further knowledge and advance progress, instead it's used to exploit.

It's hard to fault them. They've got to pay off those huge student loans somehow...

Re: The $36 soda: Overdrafting in America

#42

Post by younata »

fletchowns wrote: post #7
jeffool wrote: post #2

I had an annoying run in with them. It happened because I didn't know Suntrust didn't take out charges in the order they occurred. They take out the largest charge first, and each charge as they decrease in value. One day I had had a few small charges, and realizing it was a week intl payday, I figured I'd run to the grocery store and make a large precise of groceries, to ensure I had food taken care of, expecting to…

This practice should be illegal, just like processing withdrawals before deposits is now illegal, which was also done to maximize overdraft fees (at least I'm pretty sure it's illegal now). Our government needs to make it easier to switch to a different bank. Tons of people would leave these awful banks for credit unions and such if it was easy to do. I mean it's possible to switch banks, it's a big headache though.…

This is precisely why I have USAA as my bank.

I was originally going to get a Wells Fargo account, but that changed when I decided to go to uni in Florida - before the wachovia merger happened. My father decided that not being able to keep tabs on my account was a dealbreaker, so I ended up getting a USAA account.

Worked out for the best, because USAA has some of the best customer service in the industry.

Re: The $36 soda: Overdrafting in America

#43

Post by cosgroveb »

kstenerud wrote: post #28
mkr-hn wrote: post #21

Earlier quoted context omitted.

You're being downvoted because it looks like you're blaming the victims. Everyone would seek out good information for making decisions in a perfect world. But we don't live in that world. Sometimes it's necessary to protect people from the worst tendencies of corporations.

The fact that banks collected 38 BILLION from customers in overdraft fees would seem to suggest that people AREN'T choosing to change their habits, even on such a simple thing as this. Yes, by all means, make the banks stop gouging people like that (especially maximizing fee collection by ordering largest-to-smallest). But really, once you've suffered overdraft fees once, there's no excuse for suffering it again and…

I'd be interested to know the stats on how many people have had overdraft fees and never let it happen again (or seldom) vs. those who get them routinely.

It's happened to me. Once. Never again.

Re: The $36 soda: Overdrafting in America

#44

Post by hugh3 »

steve8918 wrote: post #13

In the book "The Big Short", Michael Lewis mentions how one CEO admitted to an audience that free checking accounts were simply a way of screwing over poor people for all these additional fees, like overdraft, etc. It's really because people with less money need to spend more time managing their money because they are closer to drawing down the account, and the banks are betting on this. It's basically predatory bank…

Well, let's face it -- it's not like banks actually make money any other way out of checking accounts. Any bank account with less than... I dunno, $50K in it... is probably costing the bank far more than it's worth. The bank ain't a charity.

Re: The $36 soda: Overdrafting in America

#45

Post by fennecfoxen »

steve8918 wrote: post #13

In the book "The Big Short", Michael Lewis mentions how one CEO admitted to an audience that free checking accounts were simply a way of screwing over poor people for all these additional fees, like overdraft, etc. It's really because people with less money need to spend more time managing their money because they are closer to drawing down the account, and the banks are betting on this. It's basically predatory bank…

It's true that this is predatory. It's also notable that if banks don't reach out to poor people with free checking and the like, the federal government gets on their case for being "discriminatory".

This isn't to absolve any banks, but rather to mock the federal government and their chronic flailing about while trying to control the financial sector(+). It's shades of the same mindset which led to subprime mortgages being subsidized, purchased by the million by Fannie Mae and the FHA. "Banks are a bunch of meanies. They ought to do charity instead."

(+) and this isn't to say that the sector couldn't use a little control, just that the Feds aren't proving themselves very competent at it.

Re: The $36 soda: Overdrafting in America

#46

Post by fennecfoxen »

hugh3 wrote: post #44
steve8918 wrote: post #13

In the book "The Big Short", Michael Lewis mentions how one CEO admitted to an audience that free checking accounts were simply a way of screwing over poor people for all these additional fees, like overdraft, etc. It's really because people with less money need to spend more time managing their money because they are closer to drawing down the account, and the banks are betting on this. It's basically predatory bank…

Well, let's face it -- it's not like banks actually make money any other way out of checking accounts. Any bank account with less than... I dunno, $50K in it... is probably costing the bank far more than it's worth. The bank ain't a charity.

I don't think it's how much the account has in it, these days, half so much as the amount of payments they put on their check card. Cash flow and merchant fees are where it's at.

Re: The $36 soda: Overdrafting in America

#47

Post by pyre »

hugh3 wrote: post #44
steve8918 wrote: post #13

In the book "The Big Short", Michael Lewis mentions how one CEO admitted to an audience that free checking accounts were simply a way of screwing over poor people for all these additional fees, like overdraft, etc. It's really because people with less money need to spend more time managing their money because they are closer to drawing down the account, and the banks are betting on this. It's basically predatory bank…

Well, let's face it -- it's not like banks actually make money any other way out of checking accounts. Any bank account with less than... I dunno, $50K in it... is probably costing the bank far more than it's worth. The bank ain't a charity.

There are more honorable ways to make money than to label something as 'free' and then attempt to incorporate as many hidden fees as possible.

Re: The $36 soda: Overdrafting in America

#48

Post by bherms »

ceejayoz wrote: post #16
esrauch wrote: post #5

Earlier quoted context omitted.

Banks do this but they will easily reverse all but one of them if you call without even arguing. If you argue a bit, I think they would reverse even the legitimate one.

Not KeyBank. I had a situation like this in college. Several levels of escalation finally got two of six overdraft charges lifted, but I was told that two reversed charges was the limit per year, no matter what the reason.

Same here... I was with KeyBank for a while too and had this happen. Fifth Third is even worse about it.

Re: The $36 soda: Overdrafting in America

#49

Post by xbryanx »

esrauch wrote: post #5
jeffool wrote: post #2

I had an annoying run in with them. It happened because I didn't know Suntrust didn't take out charges in the order they occurred. They take out the largest charge first, and each charge as they decrease in value. One day I had had a few small charges, and realizing it was a week intl payday, I figured I'd run to the grocery store and make a large precise of groceries, to ensure I had food taken care of, expecting to…

Banks do this but they will easily reverse all but one of them if you call without even arguing. If you argue a bit, I think they would reverse even the legitimate one.

I was able to get fees like this reversed once, but not before I got a very demeaning, public, and personal lecture about personal responsibility from the banker. To quote from the BankSimple article, "After that, I said some bad words."

Re: The $36 soda: Overdrafting in America

#50

Post by nknight »

hugh3 wrote: post #44
steve8918 wrote: post #13

In the book "The Big Short", Michael Lewis mentions how one CEO admitted to an audience that free checking accounts were simply a way of screwing over poor people for all these additional fees, like overdraft, etc. It's really because people with less money need to spend more time managing their money because they are closer to drawing down the account, and the banks are betting on this. It's basically predatory bank…

Well, let's face it -- it's not like banks actually make money any other way out of checking accounts. Any bank account with less than... I dunno, $50K in it... is probably costing the bank far more than it's worth. The bank ain't a charity.

Yeah, tell me, how much are those electrons costing the bank, again?

Unless they're also giving you free checks, that's pretty much the cost. A human being will rarely look at anything. Everything is handled by automated computer systems.

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