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The $36 soda: Overdrafting in America

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Re: The $36 soda: Overdrafting in America

#61

Post by Retric »

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.

Banks don't close accounts. So you can have a reoccurring charge on a canceled debit card show up on a canceled bank account get charged for it get an over draft, have a negative balance which you get charged for every day. Then once the balance is negative enough they sell your 'debt' to a third party debt collector.

PS: The first half of this happened to me costing me close to 300$ in 2 weeks and it's only me double checking that everything was fine that I got informed. At no point in this process did they attempt to contact me and they would have gladly let this grow into the thousands before contacting me for payment etc. O and the debt card had been canceled for over 3 months before that transaction happened.

Re: The $36 soda: Overdrafting in America

#62

Post by bluedanieru »

andrewljohnson wrote: post #23

I agree that banks are predatory, but the fact that people can't keep ~$500 in their bank account indicates they are spending more than they are earning. When someone can't keep an extremely small amount of cash on hand at all times. it doesn't mean they are living paycheck to paycheck and just netting zero - it means they are accruing debt every cycle, and then struggling to stay cash flow positive in any way necess…

If you wonder where those downvotes are coming from, it's the hordes of HN-libertarians who smelled a quasi-sort-of-but-not-really-socialist sentiment in your post from the front page and were instinctively, even mindlessly, drawn here.

Heaven forfend we have a single post anywhere that doesn't jive with the bootstraps, fuck-you-got-mine, randroid hivemind mentality.

Re: The $36 soda: Overdrafting in America

#63

Post by Dobbs »

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.

Bill pay, direct deposit, automatic savings withdrawal, subscription services, saved billing info (iTunes, Amazon) to name a few.

Re: The $36 soda: Overdrafting in America

#64

Post by shabble »

kstenerud wrote: post #8
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…

Which is why you shouldn't be using such a dangerous service when living check to check. Go to a bank machine, inquire about your current balance, and then extract cash to make your purchases with. Banks may be predatory with fees, but really it's your own responsibility to avoid this trap, and it's not even that hard to do. You can also join a credit union.

There are some payments which can only (or which otherwise charge some non-trivial surcharge) be made via direct-debit/automated payments. Power bills are the obvious one here, I think they couch it as a discount for online payments, and bump the baseline prices if you want to pay by cheque (by post - which you hope then arrives, and clears, and ...)

Re: The $36 soda: Overdrafting in America

#65

Post by notJim »

nknight wrote: post #50
hugh3 wrote: post #44

Earlier quoted context omitted.

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.

I think you're missing out on a lot of things. The bank definitely has costs that go into supporting its customers: branches and employees to staff them (most banks, not all of course), phone support people, the very computer systems you talk about, and people to keep them running and add new features to them. Most mainstream banks' free checking accounts make these things available to account holders, so I don't know how you can say they don't cost anything.

Re: The $36 soda: Overdrafting in America

#66

Post by protomyth »

dminor wrote: post #32
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…

Another trick: some banks count the purchase _authorization_ against your funds, rather than the _capture_, when you buy online. But the merchant may reject your order if the address verification failed. If you mistype your address multiple times, you've got multiple holds on your money. Even if the merchant voids the authorization, they conveniently don't process the voids immediately. So you can end up with overdra…

This is especially nasty with charges made at the gas pump where places like Holiday will authorize $75 and take their sweet time removing the auth after the actual charge.

Re: The $36 soda: Overdrafting in America

#67

Post by minikomi »

pyre wrote: post #47
hugh3 wrote: post #44

Earlier quoted context omitted.

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.

Bah! It's not like anyone would ever fall for that.

    Sent from my iPhone

Re: The $36 soda: Overdrafting in America

#68

Post by GigabyteCoin »

Almost every bank's overdraft fee in Canada has been pegged at $42.50 for the past 5 odd years, perhaps longer.

I just paid $42.50 for mistakenly giving a $3 refund in Canadian dollars via paypal, when both my paypal and my bank were flush with US funds, the simple fact that I mixed up a currency symbol means that refund now cost me $45.50.

This is one of the reasons I stand behind the bitcoin idea. Fee free banking would be too incredible.

Re: The $36 soda: Overdrafting in America

#69

Post by fletchowns »

ars wrote: post #59
gtCameron wrote: post #52

Earlier quoted context omitted.

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.

You are just making my point more. Not only are you missing a bunch of other things that would need to be done (What about my HSA? What about all my other recurring payments not setup through the bank? What about my direct deposits?), it would take a substantial amount of time to take care of that. Why would I want to waste a day doing all that crap? I would definitely forget some things too.

Yes, it's possible, but it's a pain in the ass. I should be able to export my entire account from Bank A and login to Bank B and import it in a matter of minutes. They know that it is difficult, that's why they are doing these fee raises and getting away with it.

Re: The $36 soda: Overdrafting in America

#70

Post by gujk »

Dobbs wrote: post #63
gtCameron wrote: post #52

Earlier quoted context omitted.

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.

Bill pay, direct deposit, automatic savings withdrawal, subscription services, saved billing info (iTunes, Amazon) to name a few.

Free startup idea: create a pseudo-bank that provides a pass-through account number for all this stuff.
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