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The $36 soda: Overdrafting in America

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Re: The $36 soda: Overdrafting in America

#51

Post by patrickyeon »

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.

I am not here to defend those engineers, but it's a very easy trap to fall in to. An interview I enjoyed reading, as a warning, was with a programmer who wrote adware [1]. It was just one more small step each time, first kicking competitors off, than maybe sneaking in an easier re-install, then maybe not going away... In the case of these overdraft fees, it doesn't even seem to me that it would take a particularily skillful or creative engineer to implement it, just a conniving enough boss to ask. After that, it's just any one person who's willing to do it for the paycheque, and we see many other people do much worse to get a paycheque.

As an engineer myself, it's even scarier when the problems are challenging and exciting, but the application scares me. Oh man, would I ever like to try and put together advanced intercept/listening systems (think cell phones, over the air)! I get excited thinking about all the technical challenges, so if someone wanted to pay and support me to do it, wow that'd be interesting! It takes me a moment to stop and think to realize that I don't want to be involved in giving that kind of power to the people who would want it.

[1] http://philosecurity.org/2009/01/12/interview-with-an-adware...

Re: The $36 soda: Overdrafting in America

#52

Post by gtCameron »

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.…

Honest question, since I haven't done it in 10 years, but what is the big hassle in switching banks? Shouldn't it be as easy as signing up for a new account and taking a cashiers check out of the old one and closing it. I'm curious to know what other hurdles they put in place to keep you locked in.

Re: The $36 soda: Overdrafting in America

#53

Post by ww520 »

younata wrote: post #42
fletchowns wrote: post #7

Earlier quoted context omitted.

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.

Is there an easy way to get into USAA for non-military people?

Re: The $36 soda: Overdrafting in America

#54

Post by ww520 »

I think credit card companies are starting to charge for "overdraft" fees.

I got mails asking me to sign up for over-the-limit protection program. I was like, huh? What over-limit? Just decline the charge when the limit has been exceeded. Apparently the CC companies would gladly authorize over the limit charge with a fee. Sneaky.

Re: The $36 soda: Overdrafting in America

#55

Post by dkokelley »

ww520 wrote: post #53
younata wrote: post #42

Earlier quoted context omitted.

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.

Is there an easy way to get into USAA for non-military people?

USAA banking is available to everyone. Some nicer services (deposit by phone, insurance) are for service members only.

For what it's worth, my brother (Air Force) sold me on USAA after he signed up with them. I worked at Wells Fargo at the time, so I had the best accounts. I'm happy I made the switch. Also, their web interface and iOS apps are excellent. By far the best I've seen.

Re: The $36 soda: Overdrafting in America

#56

Post by impendia »

jeffool wrote: post #31
impendia wrote: post #9

Earlier quoted context omitted.

Please tell me that you called them, or walked into the nearest branch, and demanded that they reverse all but one of the charges, and, either (1) They agreed, or (2) You promptly closed your account.

After a long while of phone conversation, they told me "no". I went into the branch and talked to someone there. They also told me "no". Then their spouse walked in; I'd known their spouse for years it turned out! They wiped the fees out for me. That actually pissed me off a little more... But I certainly wasn't going to tell them that. I've not overdrafted since.

> That actually pissed me off a little more

I greatly admire that.

Re: The $36 soda: Overdrafting in America

#57

Post by dhugiaskmak »

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.

Their precious human capital could be used to create further knowledge and advance progress, instead it's used to exploit.

You've just described the entire history of finance and nearly all of modern economics.

Re: The $36 soda: Overdrafting in America

#58

Post by Rinum »

My brother, a university student, got trapped in the overdraft scheme. This bank, TCF Bank, encourages students to sign up during orientation. My brother decided to sign up and deposited a small sum of money. Not realizing there exists an overdraft fee, he continues to buy things thinking the bank will prevent a transaction if his balance hits 0. He didn't realize his until letters from debt collectors came in the mail asking for $300! He tried with multiple TCF branches to try and reduce this amount, but no one budged. He got screwed!

What did he purchase to have to owe $300? He frequently buys $0.50 candy and $1 chips... at $30 per overdraft... yeah

Re: The $36 soda: Overdrafting in America

#59

Post by ars »

gtCameron wrote: post #52
fletchowns wrote: post #7

Earlier quoted context omitted.

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.…

Honest question, since I haven't done it in 10 years, but what is the big hassle in switching banks? Shouldn't it be as easy as signing up for a new account and taking a cashiers check out of the old one and closing it. I'm curious to know what other hurdles they put in place to keep you locked in.

You don't need a cashiers check, you can write an ordinary check.

If you have bill pay setup then you have to copy all those accounts to the new account.

You have to keep track of which checks you have outstanding, and especially if you have some people who take their time to cash them you may have to wait 6 months before you can close the account.

Re: The $36 soda: Overdrafting in America

#60

Post by shabble »

bdhe wrote: post #6
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…

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…

I've heard it mentioned as 'largest payment first', with the stated argument that it's most likely to be a loan or some other important payment, but has the practical effect of triggering charges on way more items.

It's For Your Benefit, citizen.

(Also, the cash advance interest differential for credit-cards, which is higher, and only paid off after all other charges are covered, rather than any sort of temporal ordering)

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