National City Bank Loves Inexplicable Overdraft Fees

Let’s play a game. Can you spot the problem below?

Like a smart consumer, college student Beth uses her debit card as a credit card at the store. She was then dismayed last Thursday to find National City Bank charged her an overdraft fees for pending charges. The pending charges would run her into the red, but she had a check in pocket for deposit later Thursday to cover it.

When she called to complain, National City Bank told Beth that, “depending on the company that you were buying from, when you swipe your card, the funds are taken out instantly.”

Unless someone changed bank law, credit cards place a “hold” on the funds for later processing. Debit cards process instantly, but only when actually used as debit cards,

National City Bank owes Beth a refund, an apology and we would say, her next overdraft waived, to compensate for the troubles. And a lollipop.

Comments

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  1. OnoSideboard says:

    Arby’s? Gross.

  2. DeeJayQueue says:

    They do that to me all the time at Wachovia. You know what they told me last time? “Keep a checkbook with you, and keep better track of the money you spend.” That was after they didn’t refund the NSF fee. She should count herself lucky that each one of those pending transactions didn’t incur its own fee. They’ve done that to me as well. It’s not pleasant to wake up thinking you’ve got $4 in the bank and find out you owe $300 in overdraft fees. Of course then they try and pimp the line of credit or a savings account for “just such an occasion.”

    Banks are bitches.

  3. The_Truth says:

    Bank of America puts deposits that are in the holding section of your account ahead of the debits, which is nice.

    Of course moral of the story is to not try floating your cash. BoA gives you a nice little book to monitor all your transactions in, if you have that much trouble keeping an eye on your balance then jot it all in the book, carry the book with you at all times, and if the book tells you that Arbys is going to cause you to go negative, event though you have the check to deposit that afternoon, dont buy Arbys….

  4. GrantGannon says:

    Why do we use our debit cards as credit cards again? I’ve seen this here before but don’t know the advantages.

  5. HawkWolf says:

    Who’s wrong here? Well, watch your money more carefully. And, if you’re a bank, don’t be an asshole to your customers. Both are equally important.

  6. HawkWolf says:

    Also, Grant:

    you can’t always use a debit card as a debit card, but you don’t want to use an actual credit card, and you don’t have cash or don’t want to fuss around with writing a check which takes a week to clear no matter what.

  7. Triteon says:

    Grant stole my post. I’ll addendum HawkWolf: and if you’re a consumer who doesn’t like how your bank (Big Box retailer, coffeehouse, cel company, et al.) operates– choose another service provider. That’s a vote that always counts.

  8. homerjay says:

    I agree with HawkWolf. One one side you have a consumer performing a balancing act and on the other side you have an asshole bank. Both are problems for each other.

  9. tokyomonster says:

    This Beth, happens to be my girlfriend, and I’m the one that contacted the consumerist about it. Those of you who are saying that you should keep a ledger are %100 correct. You should do that. The thing is Beth WAS keeping track of her account. If you look at the statement, and subtract that nasty preemptive overdraft fee, the 29.20 would have covered the three pending items that were to clear the next day. The 55 dollars, which was charged either the day before, 9/20, or that day, would have been covered by her paycheck which was to be deposited that afternoon. So those first three negative charges? They’re only negative because of the overdraft fee in the first place.

  10. tokyomonster says:

    This Beth, happens to be my girlfriend, and I’m the one that contacted the consumerist about it. Those of you who are saying that you should keep a ledger are %100 correct. You should do that. The thing is Beth WAS keeping track of her account. If you look at the statement, and subtract that nasty preemptive overdraft fee, the 29.20 would have covered the three pending items that were to clear the next day. The 55 dollars, which was charged either the day before, 9/20, or that day, would have been covered by her paycheck which was to be deposited that afternoon. So those first three negative charges? They’re only negative because of the overdraft fee in the first place.

    (if this double posts, i’m sorry)

  11. snazz says:

    im pretty sure that a debt card takes the funds instantly regardless of how you run the card… you can run it as a credit card, but it is not a credit card and will not ‘hold’ the funds.

  12. olegna says:

    Man, I used to battle my bank all the time about this. They credited me a couple of times, then simply refused to do it any more. (Then I started making more money and now I’m not always riding the line between red and black, which is how this happens).

    Technically, they’re right. Some vendors use systems that treat your card as a debit, and others as a credit. So anytime you use your debit card, you should assume it’s coming out of your account immediately.

    That’s the only way you can avoid this — because if your balance is near zero at the end of every pay cycle and this has happened before it will happen again.

    What bothers me is that banks HOLD. Fuck holding, man. This shit should work in real time. This is the 21st Century, if I can wire money to Nepal in 15 minutes my bank should be able to post my 7-11 transactions in real time.

    And it’s extremely frustrating the way every little god damn thing you do with a bank is consciously engineeredfor easy-to-make errors based on contractual obfuscations to squeeze fees and penalties out of the consumer. I am convinced they put a lot of thought into this kind of stuff. And the best way to deal with banks and credit card companies is to never trust them and always assume they’re tryng to screw you at each and every little thing, period. Always assume the worst and always assume everything is working against you.

    PS – I think using a debit card for EVERYTHING is over rated. I think having 14 transactions that are like $4.31 for a bag of tacos and $3.21 for a Slushee and Doritos, etc. increases the likihood of overdraft if you are near a zero-balance. It’s better to withdraw petty cash. Even now I find it easier to keep track of my finances by budgeting weekly petty cash withdrawals for tacos and Slushees.

  13. I’ve always maintained that I find it ridiculous that they can’t just stop letting us make the charges. You know they’re doing it just to capitalize off of overdraft fees. I was always told by Wachovia that it just “couldn’t be done” because of the way it works with the credit card.

    So I switched banks and, lo and behold, my credit union stops letting me make charges if you go over. The only way you can do an overdraft is through the old fashioned way– you write a bunch of checks and you don’t keep track of em.

  14. missdona says:

    Banks do that all the time with the pending charges.

    Commerce Bank has an overdraft that’s a line of credit. I signed up for a $500 buffer. It works like a credit card with no grace period. You don’t pay for it until you use it, but once you use it, it starts accruing interest right away.

    In a situation like this, it would have debited $100 from the line of credit (the minimum amount) and you would owe, like $100.08 if you pay it back the next day.

    No $34 overdraft charges for me, and it’s a lifesaver in some circumstances.

  15. mactbone says:

    Hasn’t anybody else noticed that the overdraft fee was charged the day before she used the debit card to actually go in the red? She still had 29 and change when they charged her a fee that her remaining balance would cover.

  16. tokyomonster says:

    I happen to be Beth’s boyfriend, and the one that tipped off the Consumerist on the matter. Those of you that are saying that you should always keep a ledger and track your account are exactly right. However, Beth and I ARE tracking our accounts. If you’ll notice, before that preemptive overdraft fee, we would have enough to cover those 3 pending charges that are showing as negative. The only charge that SHOULD be showing up as negative in the pending, was the one for 55 dollars, that was made at midnight thursday night, and DEFINITELY would have been covered by the paycheck she was depositing that afternoon.

  17. Sheik says:

    Even without the overdraft charge she still would have not had enough money in her account for the pending items.

  18. tokyomonster says:

    I happen to be Beth’s boyfriend, and the one that tipped off the Consumerist on the matter. Those of you that are saying that you should always keep a ledger and track your account are exactly right. However, Beth and I ARE tracking our accounts. If you’ll notice, before that preemptive overdraft fee, we would have enough to cover those 3 pending charges that are showing as negative. The only charge that SHOULD be showing up as negative in the pending, was the one for 55 dollars, that was made at midnight thursday night(9/21), and DEFINITELY would have been covered by the paycheck she was depositing that afternoon.(Afternoon of 9/21)

  19. tokyomonster says:

    wow, if my comment that i was trying post shows up 99 times, sorry. I didn’t notice the part where it said it was in the “invitation queue”. Yikes!

  20. Pelagius says:

    That was actually an “Other Customer Annoyance Fee”. Beth was being penalized for being that one person who is always at the front of a cashier line charging $3.21 to her debit card.

    Seriously, try budgeting. Take out some petty cash and use it through the week.

  21. Scott Kidder says:

    I don’t understand the problem… if she didn’t have enough money in her account when she made the charges, she didn’t — and has the fee to show it.

    If she wants a grace period, she should use a credit card.

    s

  22. Mike_ says:

    Credit card transactions come in 2 parts: (1) Authorize, and (2) Capture. “Authorize” means “make sure the account has sufficient funds and set that money aside for this transaction”, and “Capture” means “give the money to the merchant”. For some transactions, like when you order something online, there is a long delay between “authorize” and “capture”, because mail order rules prevent merchants from charging customers before they ship an order. For point-of-sale transactions, the money is “captured” immediately.

    There is a delay between when the charge is “captured”, and when the merchant “settles”, but it tends to be less than 24 hours, because banks view long settlement delays as risky, and charge higher fees for these transactions.

    I am not sure how these processes differ for credit vs. debit, but I’m guessing they’re probably identical, except for debit cards, the money is taken out of your checking account, and for credit cards, it is taken out of your available credit.

    When your bank labels a transaction as “pending”, it could be because the transaction is authorized, or captured but not-yet-settled, or settled and their system just hasn’t been updated to reflect the change. No matter what the cause, you should consider that money spent, effective immediately.

    Question for the tipster: when did the transactions dated 9/22 actually take place? What was the ‘available balance’ at the time the bank processed that check for $150? The reason I ask is that my bank sometimes shows ‘pending’ items dated 2-3 days after I completed the transaction.

    Aside from an uninformative customer service response, I don’t think the bank did anything wrong here. I think Beth probably needs to learn how to use a checkbook and a debit card. Stop spending more money than you have.

    Beth, call the bank and politely ask them to reverse the overdraft fee. Tell them you understand your mistake, and you’ll be more careful in the future. If they refuse, ask to speak to a supervisor. If the supervisor won’t help, close the account and take your business elsewhere. Even if you feel like the bank screwed you, you’ll catch more bees with honey than vinegar.

  23. omicronpersei8 says:

    Just don’t have debits floating against an account that won’t cover them.

    You’re just sticking your butt in the snake pit and waiting to get bit.

    A myriad of things can go wrong. Happened to me once in the same scenario back in college. I was going to deposit a check to easily cover the coming debits. But wait, oops!, lost the check. BING BING BING! Overdraft – Overdraft – Overdraft!

    Since that expensive lesson, I’ve learned that it’s not really that difficult to avoid.

  24. kasumi says:

    Hey-
    This happened to me in the last few weeks. I have two checking accounts. One was running low because of a bunch of $3-$10 transactions (lunch, coffee, etc.). I had plenty of dough in my other account, so I transferred funds immediately after this happened. So my bank was carrying my transactions for 15-20 minutes. Low and behold, they changed the rules about fund transfers between accounts, meaning although they knew damn well I had plenty of money in my other checking account, the transfer was listed as pending. I got hit with $300 in overdraft fees. Total my transactions equalled less than one overdraft fee. They also didn’t pay on a check which was a total pain.

    I admit I screwed up, but it comes down to common sense. The bank’s computers should be smart enough to figure out since the money was coming from an acocunt at the same bank, the money was real.

    I called and complained and got a terrible operator. I used the tactics described here a few months ago (see “customer service ninja”) and sent emails off to some of the bank officers. A secretary contacted me and explained the problem, was sympathetic and refunded 80% of the fees.

    My suggestion is to contact bank officers or regional managers. They usually like to help people and aren’t worried about refunding $34 when it means keeping you as a customer.

    This isn’t about not keeping track of your expenses, but milking customers for fees. I understand this is how banks make money, but the current situation especially with online banking is inflexible. Banks don’t post cut-off times, transactions process differently and not in real time. If I spend $40 at Home Depot at 9AM on Monday, why does it show up in my pending activity window? It should be processed in real time. Debit cards used as credit shouldn’t let you overdraw. When I asked a bank operator about this, her reasoning was, “Its embarrassing to have your card declined.” There is a big difference in:

    A) Declining because you have $0
    B) Declining because some shoes you bought a week a go take so long to post.
    C) Paying $34 for an overdraft of a few cents.

    I took commercial paper in law school, got in A in the class, got the highest mark on the bar in commercial paper and this doesn’t make any sense.

  25. Gesualdo says:

    Credit Unions exist to serve their customers, not their shareholders. I’ve found my credit union to be awesome. Not once have I felt taken advantage of and the interest rates are considerably higher than banks (and no $50k minimum deposit to get those good rates).

    Switch.

    That having been said, why not use a credit card? With rewards programs, you can effectively get 1% off everything you buy. If you don’t trust yourself to be able to control your spending, I’d highly suggest avoiding debit cards too. It seems to me that actually handling cash will give you a better understanding of how much money you spend and help you create a budget.

  26. ikes says:

    pelagius: welcome to the modern world. why carry cash when you can use your bank card, old man?

  27. tokyomonster says:

    Their online bank system is very confusing. If you look, at the end of that day, she had 29.20. Usually that should be the end of the story. But then the overdraft fee kicked in, and made the next three pending items appear to be in the negatives. Again, yes, the 55 dollars WOULD have overdrawn her, had she not deposited her paycheck that day.

  28. Triteon says:

    I assume because pelaguis (olegna and myself) find it very difficult to overdraw cash in our pocket.

  29. Mike_ says:

    I looked more closely, and it occurred to me: Don’t debit cards decline if the account has insufficient funds? If so, those transactions dated 9/22 through 9/25 must have occurred before the check cleared. If my math is correct, Beth’s had $106.73 available to cover a $150 check. Case closed.

  30. FLConsumer says:

    The overdraft most likely came from a hold placed on the credit card…the most likely suspect are the BP/Marathon charges. Hess (and others) down here put a $50-75 hold on card transactions. After some flack about it, they’ve now posted signs which tell people to push the DEBIT button, otherwise they’ll have that $50-75 hold for 7 days. Of course, this is totally dependent upon the gas station’s bank and their policies…which is another reason not to use debit cards.

    Personally, I’d never use a debit card for transactions. There’s virtually no laws protecting you with it, each bank has their own set of rules, and if there is a screw-up, you’re SOL until the problem is resolved. Credit cards are fine as long as you treat them LIKE checks and keep a running total going. Now with the internet and online banking, there’s no excuse to let debt pile up on the credit cards, and if there’s an issue, it’s not my money that’s in limbo.

    I’m also with olegna on this one — what the hell’s up with so many

    As far as banks go, I’ve been with Wachovia for years and can’t say enough for them. Probably doesn’t hurt that Wachovia REALLY likes me and provides me with white glove service, but I’ve never had an issue with ‘em.

  31. zentec says:

    Check 21 eliminated any chance of using float. Besides eliminating the need to transport checks across the country, it also speeds the processing to nearly instantaneously for merchants who have the money to do such transactions. Even those that don’t, it cuts a few days off the time funds actually are moved.

    Debit cards have pretty much been the same way.

    Unfortunately, that speed doesn’t apply to deposits. Which seems odd because deposits are usually checks anyway and one would think a bank would be high on the list when it comes to getting funds moved quickly. It takes 24 hours for my direct deposit funds to show up in my checking account.

  32. Jon Parker says:

    I run a bunch of small charges on mine occasionally. I agree that cash is better for such things, but I run out and haven’t made it to an ATM then I start using the card.

  33. Hasn’t anybody else noticed that the overdraft fee was charged the day before she used the debit card to actually go in the red?

    I did. Apparently it’s ok for a bank to charge an overdraft before it happens.

    I think using a debit card for EVERYTHING is over rated. I think having 14 transactions that are like $4.31 for a bag of tacos and $3.21 for a Slushee and Doritos, etc. increases the likihood of overdraft if you are near a zero-balance. It’s better to withdraw petty cash.

    I’m the opposite. Once I withdraw cash I tend to think of it as already being spent as far as my budget goes. I’m more likely to spend cash that’s left over on something I don’t really need instead of saving it.

  34. Bokonon says:

    Debit cards are advertised as working “just like credit cards.” When you hit your credit limit on a credit card, it declines the charges. Having insufficient funds for a debit should work “just like a credit card” and be denied. The check posted on the 21st; the subsequent charges have later dates–therefore, the overdraft shouldn’t have happened because the charges should not have been there in the first place.

    Also, the overdraft is fraud, as posted on that statement. Chronologically, it didn’t exist until the next day.

    I thought banks were supposed to keep track of money accurately. Oops.

    Worst part is my roommate had some (legit) overdrafts with National City a few years ago. They hit him with 5 in a day, and refused to give him a “goodwill” credit on any of them. He’s a poor college kid. Of course, the bank is entitled to that per the contract, but not showing mercy means that National City are assholes who suck.

  35. Anonymously says:

    I deposited a check into a NatCity MAC machine on a Sunday, Monday was a bank holiday, but they still withdrew the money from the check issuer’s account on Monday, causing an overdraft. Be careful of that too.

  36. brabus says:

    What is smart about using your debit card as a credit card when your balance is so close to zero?

  37. JAFO says:

    If you don’t like the way your bank does busyness, leave them and find another bank! Personally I use a Credit union that posts my deposits immediately and does not allow me to use my debit card if my balance is below $5

  38. Kos says:

    I agree with FLConsumer… I still can’t see any benefit of using a debit card. With a credit card you get the float from when you charge and when you’re billed so you avoid instances like these. I’ve had friends say “Oh, but it is hard to keep track of how much I charge to my credit card,” to which I say BS. Most credit cards have online services and you can get notified through email or SMS with your daily balance if you really wanted to monitor what you charge that closely.

  39. VA_White says:

    A checking account is not a revolving credit account. You should not sign for transactions that you don’t have the money to cover. It’s really that simple. You should count every credit card slip you sign against your debit card as a check that will take X number of days to clear. X = anywhere from 5 seconds to 10 ten days. There is no way of knowing.

    These days, you cannot count on ANY float time on your funds anymore. I have also been a starving student who pared her checking balance down to .29 before each payday but it is possible to survive without floating checks/debits/charges on your account.

  40. tokyomonster says:

    The problem is more that the charge occured before she was actually in the negatives.

  41. timmus says:

    I agree with the “find another bank” comments. I’ve grown weary of listening to complaints about banks do when most of these complainers go right back and continue banking with them. The banks know people will grumble and say “it’s too hard”! and continue bending over for them! Lately the only complaints I care about are those where people want (A) satisfaction and (B) a different company to do business with.

    The last time a bank screwed me over (Bank of America) and demonstrated no interest in fixing things, I was in their office 3 hours later closing out my company’s commercial checking accounts.

  42. He says:

    One real advatage to using your debit card as a credit card is that people can’t steal your PIN during those transactions . . .

  43. amfxc says:

    I bank with NatCity and, looking at my account, I see that pending items are always deducted from the account. I guess that when an item is listing as pending, it’s the same as a hold on your account. The transaction hasn’t cleared, but the money technically isn’t available. Pending or a hold — whatever the bank wants to call it — it’s basically the same thing.

  44. kerry says:

    I’m with rectilinear, btw. At least, I used to be. I’ve got it set up now so that I take out a lump sum of cash for the weekend, but consider it “spent” in my mental budget. Then, when the weekend comes ’round I’ve got this freedom to spend at will the cash in my pocket, and anything leftover basically goes to paying lunch in the coming week. Debit and credit cards get used for purchases too large for the weekend cash (like ‘spensive dinners and such). Best of both worlds, IMHO. Don’t have giants wads of good-as-gone cash in my pocket, but I’ve got enough to spend freely within my budget (so there are rarely charges on my debit card for under $10).
    As for Beth’s problem, it’s that while a bank may not list a transaction as pending until, say, the 22nd, that money was “cleared” out of your account the day the transaction was initiated, possibly on the 19th, 20th, or 21st. It’s the fault of the stupid pending/posted web system that makes for this kind of confusion. Stuff doesn’t show up as pending immediately, but the bank holds your money immediately.

  45. olegna: This is the 21st Century, if I can wire money to Nepal in 15 minutes my bank should be able to post my 7-11 transactions in real time.

    Seriously. The less-than-real-time nature of purely electronic financial transactions is really starting to piss me off.

  46. tjrchicago says:

    What I’ve noticed, from Chase anyway, is that ANY activity from the debit card hits the account immediately and goes into “pending” status. The money is gone right then and there. The status doesn’t change to “posted” until the merchant backs up the charge with their transmission. I’ve seen that take anywhere from same day to 72 hours. My guess is that some of these transactions hit on the 21st, causing the overdraft, and simply have not posted to the account yet.

  47. acambras says:

    I too have had the same problem with Wack-off-ia.

  48. WindowSeat says:

    The bank sucks, but the holder of the account could save herself a lot of grief and keep some “walking around” money on hand. The majority of these transactions are under $10 and aren’t worth the fees.

  49. Anonymously says:

    There aren’t any fees if you don’t overdraft, WindowSeat. Were you referring to some other fees?

  50. SexCpotatoes says:

    my Sociology professor in college worked at a bank before he became a professor, and he let us in on the little secret that the banks essentially use all the overdraft fees to cover the piddly ass interest they pay on all their “savings accounts.” That way, those 11%-18% car, and home equity loans are pure profit.

  51. FLConsumer says:

    I think what people are getting confused about here is how things work when your money is taken out of the account via ATM network vs. Visa Checking network. I dine out quite frequently, and the “hold” goes through immediately on a Visa credit account, and I’m assuming the same is true with the debit Visa accts as well. Usually the holds are for more than the purchase price, but not always.. Then 2-5 days later, the actual charge posts, BUT, during that interim, the “hold” amounts are temporarily deducted from my credit limit. I don’t run my cards anywhere near their limits, so I’m not sure what happens if you get close to the limit, but I’m assuming you’re still not allowed to borrow/use the “hold” money until the transaction hold is either posted or cancelled. I believe this is what happened with this particular statement — temporary holds put them over their limits.

    Kos: I totally forgot about the e-mail & SMS deal. Wachovia does that, but I’ve never used it. I don’t think my MBNA credit card does it (not surprised, as they’re the only bill/account I have where the due date changes every month, bastards)

    To those who can’t manage cold, hard cash… please don’t get a credit card. If you can’t manage cash in-hand, you’re going to have a more difficult time managing invisible cash.

  52. FLConsumer says:

    SexCpatatoes: Maybe the bank he worked at did that, but I’ve never seen a bank (and I’ve been “on the inside” of many banks) which could cover interest based on the tiny amount of revenue raised from overdraft charges. Maybe your soc. prof worked at a ghetto bank with small savings accounts and high # of overdrafts.

  53. Antediluvian says:

    I stopped using my debit card for small ticket items at convenience stores (Starbucks, Dunkin Donuts, Wendy’s) because I had my account info stolen. The hubby noticed it because he’s diligent about online balance checking and wondered why the balance was so low — $900 less than it should be.

    Someone took my account info and used a card with some other name but my info and bought 3-$300 gift cards in California (I’m in Mass.). Two at GameStop, one at Sears. MasterCard says the transactions were legit because the purchaser (thief) had the physical card. Except he didn’t. I believe he used any old card and re-encoded the magstripe, hoping the clerk wouldn’t notice the names and numbers didn’t match the card. The electronic signature doesn’t matter — it might even have matched the one on the card.

    This happened shortly after I started using my debit card for those small-ticket items. My theory: some clerk kept a copy of my numbers or — swiped my card twice: once in the store’s reader, once in their own. Easy way to get tons of card numbers, no one would really notice. These transactions all involved me handing the card to the clerk, not swiping it myself.

    Thankfully, my bank ended up covering the $900 — they reimbursed my account very quickly and ultimately ate the money because MasterCard said the transactions were legit and wouldn’t force the stores to cover the losses. This is a reason to use a small, home-town bank.

    And more importantly, nothing else bad (ID-theft-wise) seems to have happened from this situation. That loud sound you hear is me knocking on wood.

  54. WindowSeat says:

    Greg P: I should have said “potential fees.” I was going for brevity over clarity. It seems like she keeps a pretty slim balance and it would be easy to overdraft if she didn’t pay close attention.

  55. ahcka says:

    I work at National City as a teller. Looking at the online statement, I can clarify a few things.

    Per NC’s agreement with Visa (the wonderful logo on the debit card), all transactions used as a credit card immediately have the money set aside out of the account when the transaction hits the bank. That’s what all those pending transactions are at the top of the printout.

    The date shown on the pending transactions are when they are basically going to finish processing. Too many dependancies to list as to why some take longer than others. But most times it’s 3 days.

    So if you look at the three transactions labled for 9/22/06, they were more than likely sent to the bank before that, probably on 9/19/06. The confusing thing is the running balance on the side showing those funds being taken out for the pending transactions last instead of having them in chronological order as to when they actually came in.

    Depending on the her past with the bank, I would suggest she call the office manager/branch manager of the branch where she opened the account. If she didn’t have any priors, then it’s likely it will be removed. I know we’ve done quite a bit of those for first time offenders.

    As a side note, NC also has a shady practice in their account contract that allows them to pick and choose which debits they pay first each day. Say you have a check for $1200, and 3 smaller checks for $20 each. Let’s also say it’s not quite payday and you have $1219 in the account. What will more than likely happen is, the mortgage check will go through free and clear. You’ll get hit with 3 overdraft charges for the 3 other checks.

    ATM deposits are another problem entirely. Whenever possible, cash checks out before depositing them. You’ll avoid quite a bit of hassle.

  56. uncle-looey says:

    $3.12?? debit cards are tracked. Cash is still king. Even uncle looey knows whwere you’ve been.

  57. North of 49 says:

    I should send in my CIBC statement from last month. We didn’t go to Burger King on Thursday because I knew there wasn’t any money in the account. But we did go on Friday. So, what happened? It posted on Thursday, incurring a less than 5$ overdraft charge. Which is funny, because we don’t have overdraft on that account. We keep on trying to get it and CIBC refuses to give it to us even though we had it on one of our previous accounts up to 6 months ago. So, at the beginning of this month, we get slapped with $10 overdraft charge and interest.

    Yah, I think I will send it in – if I can find the statement. I was monitoring the account like a hawk too and still do, but what I see online vs what the statements show are often different, so I can’t even be sure with monitoring online.

  58. dissolution says:

    I don’t get the American banking system. Here in Canada we have debit cards (aka bank card, ATM card) and credit cards. Separate things.

    The debit card is what you use at the ATM, and you can use it to make purchases at pretty much any store. The funds are immediately withdrawn in either case. If you have $100 in your account and you make a $101 purchase you’ll get declined. If you make a $99 purchase you’ll have $1 in the account afterward. It’s pretty straightforward.

    Then you might have any number of credit cards for which you’ll get an invoice and pay as you choose.

    Makes sense to me!

  59. Smashville says:

    Is it possible that the overdraft fee was applied retroactively? Either way, the account would have the same amount of money (or lack thereof).

    The fact of the matter is that she overdrew her bank account…no matter what bank you use, they’re not going to let you use money you don’t have.

  60. Demingite says:

    A way to essentially permanently avoid overdrafts and — if you choose — credit card interest:

    1. Invest in Quicken or other accounting software.
    2. Always save (and ask for) your receipts, and record anything you buy and all checks you write in the software.
    3. The software will tell you what you can and cannot do relative to courting overdraft or interest charges.
    4. Be disciplined to not spend more than what you actually have.

    A relatively small investment in software, and in self-discipline (re both entering receipts and watching your balances) can have major payoffs in money saved, headaches avoided, and better credit scores.

  61. billhelm says:

    It’s quite simple:

    DON’T SPEND MONEY YOU DON’T HAVE

    The extra charges overdrafted her account.

    There is a point here that banks have a rediculous system, but this person is not getting “screwed” when they continue to use the ol’ check card when they HAVE NO MONEY IN THEIR ACCOUNT.

    Piss Poor financial management is no reason to go after a bank.

  62. Namrepus221 says:

    I think it’s because of that “Check 21″ thing that went into effect in 2004

    Basically you can’t “float” a check any more because all banks have switched over to electronic check clearing.

    http://www.snopes.com/business/bank/check21.asp

  63. FLConsumer says:

    Narmrepus221: Actually, legally, you’re supposed to have the money in the account when you write the check.

  64. Namrepus221 says:

    Right. but you used to be able to write a check if you knew you had no money in it if you had cashed a check prior to that.

    You could write the check and it would take several days for it to clear. But if you cashed a check between writing the first one the money would be automatically deposited in your account.

    When the first one cleared you’d have enough funds in your account to cover it and not bounce it.

    With this “Check 21″ thing that’s no longer possible.

  65. Mike_ says:

    My previous comments were lost in the “new commenter approval delay”, so I hope no one minds if I reiterate what I had to say last week …

    1) The timestamp you see in the activity log doesn’t necessarily reflect when the transaction actually took place. I’ve noticed my bank sometimes dates entries several days after I made my purchase. I’m not sure where that date comes from.

    2) Debit cards (like credit cards) are supposed to decline if insufficient funds are available in the account. Therefore, the transactions dated 9/22 through 9/25 probably occurred before the check cleared on 9/21.

    3) If 1 & 2 are correct, then Beth had $106.73 available to cover a $150 check. The rest of the money in her account was reserved for pending debit card transactions, money that was already spent.

    If the chronology shown is correct, we should be asking how she was able to debit $53.33 on an account that had already been overdrawn for 4 days. This should not be possible, unless you’ve got a line of credit with your bank (which should have covered the bounced check).

    The moral of the story is that it’s very difficult to float checks, and impossible to float debit card transactions. I’m pretty sure National City didn’t do anything wrong here. A lot of conclusions have been jumped to.

    If the bank is at fault, they should be torn a new one. But before we run them through the ringer, someone should look into whether this could have happened in the way I suspect it did.

    -M

  66. smithinmichigan says:

    I had five debit transactions pending at National City Bank, and at 2:00 A.M., my balance was $2.34. By 9:00 A.M., I was charged for a check which cleared FIRST and had not been shown even as pending. I was charged overdraft fees for the five debit items. This happened even though my child support check was direct-deposited the same day from the state and the total balance would have been more than sufficient to cover everything. I closed my account the next day. The bank rep told me that all charges are posted from highest amount to lowest amount, and even though deposits and debits may post the same day, the higher amount caused the first debit and everything else flowed from there.

  67. bmanny says:

    Having worked in the banking industry for the past 12 years, and having had to explain the basic concepts of addition and subtraction to hundreds of people, I can confidently tell you that if you try to beat the banking system, it is going to catch up with you. If you use your checkbook properly, there will be no question as to the amount of funds in your account.
    I can spot the problem on the statement, the running balance is a -77.27, that’s a problem. And yes, when you swipe your debit card, the funds are on “hold” immediately and unavailable to cover any items that may clear the account.
    Use common sense people!

  68. upsetcustomer says:

    Today, I experienced overdraft charges from NC. My available fund yesterday was $105.44 and deposited a personal check for $1,100 at 11:40 a.m. They didn’t credit my deposit until midnight and therefore the checks totaling $739.30 cleared before my deposit which made my account in the red. In order to make my account good, I had to write another check to deposit for $300 hoping that it would be credited for my pending house payment. When calling the bank to verify if that deposit was going to take care of the house payment coming through, they confirmed that the check for $300 would be credited first before any checks coming through or the pending debits. Why didn’t they do that with the $1,100 check? They told me that the deposit for $1,100 had to be verified first before the funds are available it could available that day but likely the next day. This is done through electronic verification and as we all know, computers can be slow. Who’s to know if National City or the $1,100 deposit on Chase Bank, my husband’s account, didn’t have computer malfunctions? The automation systems for either bank could have been a minute fast or slow and who would know? Only the bank would know and they surely wouldn’t admit to it. Why don’t they put the actual time that on the deposits, cashed check or on the bank statement? This would make the bank hold to what they’re doing and no monkey business could be going on behind the scene. I’m now in the process of closing my account since 1985 with National City and going over to Chase Bank where my deposits will be credited immediately when my husband give my that check on the first of the month.

  69. YOTSEE2 says:

    I JUST RECEIVED AN OVERDRAFT OF $34.00. I DEPOSITED THE MONEY ON 10/7/06 & THE BANK TOOK MY HOUSE PAYMENT 10/8/06. THEY CHARGED ME AN OVERDRAFT BECAUSE THEY HADN’T POSTED THE DEPOSIT PRIOR TO TAKING MY MORTGAGE. WHEN I CALLED THE BANK, THEY SAID THAT’S THE WAY WE DO IT, SO I CLOSED OUT MY CHECKING ACCOUNT AN WILL NEVER DEAL WITH NATIONAL CITY BANK AGAIN. THEY ARE THEIVES. I HAVE ACCOUNTS AT 3 BANKS AND 1 CREDIT UNION AND HAVE NEVER HAD A PROBLEM WITH ANY UNTIL NATIONAL CITY BANK. I WILL MAKE MY MORTGAGE PAYMENT EACH MONTH BY CHECK ON THE EIGHTH.

  70. ibalancemycheckbook says:

    Upset Customer and Yotsee2:

    The funny thing about banks and credit unions alike is that they have “end of business” cutoffs. These cut offs usually are in line with when the bank closes. If you deposit money at 6P and business cuts off 5P. No one will run your transaction until 8A when the bank opens in the morning. A bank is never going to front your money, until they have verifed that you are good for it (until they verified your deposit).

    Depending on how the business you are writing a check to does business, those funds can be applied to your account right away. (In Example – Larger retailers scan your check and take the money from your account right from the register) If you have $200 in your account Monday at 5P, deposit $100 in the ATM at 6P and write a check at Target for $310 at 7P chances are you will see an OD Fee. The moral of the story is to structure yourself to not cut is so close.

    It is not NCB’s or any institutions fault that you choose your lifestyle and choose to live so close that you overdraft your account. Many institutions have a free overdraft protection product you can set up to cover your checking account. I put $5 aside per pay period into this account for a year and stocked away $130 to cover any mishaps I might have (we all have made a calc error from time to time).

  71. galileo says:

    What I find interesting in this thread is that we have multiple differing takes on what her balance really is/was/should have been… if she really had the money to cover it all or didn’t… if the overdraft fee was warranted or not. Should banking really be *this* confusing?? It should not be possible to make an entire debate out of a single bank statement. But with a National City one, we have! I am a current NCB banker, and I hate how their system is. I know how to add. I know how to balance. I have a high IQ. But ever thinking that their system can be used in any kind of helpful way is laughable. It shouldn’t be, but it is. And that is unfortunate and reflective of the bank that National City is.

    Ultimately, what reading this thread illustrates, is the gluttonous way that NCB and banks like them run their customers bank accounts. I agree that consumers need to be responsible with their money. But people do make mistakes. And banks like National City in my opinion openly exploit that fact. If you overdraft your NCB account, you will be charged an overdraft fee for every single item that comes through once an account is overdrafted. That can quickly become a huge freefall within even a single day. But how does NCB inform you that the account is overdrafted? By snail mail. They have customers email addresses but don’t use that. They conveniently use snail mail, allowing for plenty of time for overdraft fees to stack up in their pocket. Forgetting a single check entry in your checkbook can result in giving the bank 3-4 days of multiple overdraft charges. While the consumer who forgot to record a check did make a mistake, NCB conveniently structuring things to give themselves 3-4 days worth of overdraft fees is needless and excessive.

    Now, this whole thread has me worried about all this. I actually contacted NCB and just spoke with an NCB customer service rep who stated that she once had a gentleman who ran a small business and missed depositing a check that he normally does. Not realizing/remembering that he hadn’t deposited it this one time, he had 150 transactions run through before he realized his mistake. National City Bank charged him *150* separate overdraft charges and refused to refund a single one. I don’t care who you are, that is insane and exploitative.

    As the world gets smaller and smaller through the internet and e-commerce, smaller companies are disappearing underneath the large ones. And those large companies are getting uglier and uglier. Consumers easily become a dime-a-dozen, interchangeable, and nothing more than a number. Banks used to be about trust. Too few are anymore. I myself will be closing my National City Bank account this weekend and going back to my smaller local/regional bank that I trusted for years.

  72. kevin63 says:

    I became interested in some comments on this forum with National City Bank. National City Bank has been taking money illegaly from consumers and now my attorney is seeking a claim against them for breaking the account aggreement and not following the US Uniform Banking Act and regulations. I think people need to be aware what is happening and now it can be stopped.

  73. kevin63 says:

    I worked for National City Bank about 7 years ago and I know at that time they were looking for ways to charge fees for income. Sometimes banks become too large and when new systems and products are introduced, they sometimes fail to follow account agreements or a US Banking regulations. This happened some of time and we were always coding a fix or changing a policy to follow regulations.

    Don’t assume it’s in their legal right to charge you a fee for certain items. Check your personal account agreement and also the Uniform Banking Act laws and regulations.

    This happened to me when I deposited a check which didn’t get applied the next day. If a check is not available the first business day of the deposit you need to be notified at the time of the deposit. National City Bank will trick and deceive you in thinking money is available and you end up getting overdraft fees instead.

    My lawyer is is filling a claim against them at this time.

    If this happened to you and you have the most current checking account agreement. Page 32 would explain this agreement. The US banking regulation indicates that this should also occur as well. If you deposit slip dosen’t show a hold and the date matches deposit you have a case.

    Good luck and I would suggest you find another bank.

  74. fashionista says:

    I used to be a NCB customer for 10 years. My paycheck was always on DD and even though my account never held more than $100, I was always careful about not overdrawing (I prefer to spend my money on me). I had 2 instances of overdraft this year: the first was over a month ago. I had mailed a check for my car payment and cashed another check at work. Both items were done about 2 days prior to payday but, as luck would have it, both made it NCB on payday. Did NCB refund either NSF charge? Hell no! My paycheck was sitting there in pending status while the checks were actually being put through. When I called c/s, the person I spoke with stated that they have no control over the order in which the transactions post (which is why it’s possible to have the account look as though the NSF charge overdrew it instead of the debit/check transaction). The second time I overdrew the account was this past weekend. This was totally my fault because I had put my cc payment in my other bank account and had changed the bank account online but failed to call my cc’s c/s center and ensure that they were using the correct bank. Needless to say, they took the payment from NCB and NCB promptly charged me $34. On my way back home from Jefferson City, I stopped at a gas station and did a small transaction for $2.08 – thinking that the account had approx. $9 in it. I got hit with yet another $34 fee. When I went into the bank on Saturday morning, I asked if they second charge could be refunded and understood that I was fully responsible for the charge connected to the cc payment. The bank rep refused to refund so I closed my account. Rather than continue to let NCB rape you financially, leave! Trust me, voting with your feet (and your money) is more effective than any any complaint ever could be.

  75. JJ22 says:

    I’ve worked at different banks for over 10 years. Basically, if you’re writing checks and using your checkcard before you have money in your bank account … chances are you’re going to overdraw your account. If you don’t have money, don’t try to spend it! And about banks refusing to refund fees, that only happens when you’ve had a bunch refunded already or you’re treating their employees like crap.

    kevin63 – Try reading their funds availability policy. I bet it’s with your new account papers and plastered all over the bank office. In the midwest, the average bank hold is 2 business days. Have fun paying for your lawyer.

    Galileo – I’m sure one of their customer service reps did NOT tell you about that … a bank rep would never tell you about someone’s bad experience. Those calls are recorded and I’m sure most of the reps would like to keep their job.

    The moral of the story is … don’t spend money you don’t have. And *if* a mistake happens (and it doesn’t happen often), talk to your bank about refunding the fee.

  76. AngryKat says:

    Current Balance: -$98.74
    Available Balance: -$98.74 *
    *Includes amounts available through overdraft protection, if applicable.
    = Check Image


    Date
    Description
    Type
    Debit(-)
    Credit(+)
    Running Balance
    Pending Items
    No pending transactions for this account.
    Posted Items
    05/07/2007 WAL-MART #2426, COLUMBUS SW, OH
    NC CHECKCARD TRANS. Debit $1.57 ($98.74)
    05/07/2007 WAL-MART #2426, COLUMBUS SW,OH
    POINT OF SALE PURCHASE Debit $2.43 ($97.17)
    05/07/2007 NORTON ROAD DRIVE THRU, COLUMBUS
    NC CHECKCARD TRANS. Debit $10.00 ($94.74)
    05/07/2007 CICIS PIZZA #420 OH, COLUMBUS, O
    NC CHECKCARD TRANS. Debit $19.06 ($84.74)
    05/07/2007 OVERDRAFT CHARGE Debit $34.00 ($65.68)
    05/07/2007 OVERDRAFT CHARGE Debit $34.00 ($31.68)
    05/07/2007 NAT CITY ATM DEPOSIT
    1715 HILLIARD ROME, HILLIARD,OH Credit $26.00 $2.32
    05/04/2007 SPEEDWAY 9341 Q64, COLUMBUS
    NC CHECKCARD TRANS. Debit $10.05 ($23.68)
    05/04/2007 OVERDRAFT CHARGE Debit $34.00 ($13.63)
    05/02/2007 MCDONALD’S F17738, COLUMBUS, OH
    NC CHECKCARD TRANS. Debit $10.00 $20.37
    05/02/2007 NAT CITY ATM DEPOSIT
    1715 HILLIARD ROME, HILLIARD,OH Credit $350.00 $30.37

    I know what Beth is going through. On 5/4 I deposited $26.00 into my checking account. I was going to buy 3 phone cards. My sister asked me to go to dinner with her instead. So I went to dinner $19.06,then to Walmart exchanged an item $1.57 differance and bought some food for the week with cash but needed the $2.43 because I was short,then to the drive-thru to get one phone card $10.00. I used my card as credit all 4 times.

    Monday morning I find they took out an overdraft fee !! I called and they said the credit charge for the drive-thru $10.00 and the $1.57 Walmart charge put my account negative. That some credit charges come out of your account right away. They said “always make sure that the money is in your account BEFORE you use your card”. I DID !!! I deposited the $26 on Fri. before I ran the charges. I have always used my card as credit at Walmart and the drive-thru and it’s NEVER come out right away before.
    So why now?!

    If the $1.57 Walmart charge came out right away; then why didn’t the $2.43 Walmart charge come out to ???? HMMM???

    It’s a scam to get money ! Switch banks. I did.

  77. AngryKat says:

    I don’t think my post made sense. On May 4th I had $10.32 in my account. I deposited $26.00 around 7:30 pm which on Mon. would have put my account at $36.32. I ran 4 credit charges totaling $33.06 thereby leaving a balance of $3.26 in my account.

    National City Bank charged me an overdraft fee on May 4th for 2 of those charges ($1.57 and the $10.00). Then on May 7th charged me 2 additional overdraft fees, toataling $102.00 in fees, for my account being overdrawn. Which is due to their fee being taken out on the 4th.

    I was told when I first got the account that all credit charges come out in 3 to 4 days and debit charges come out immediately.

    National City refused to give me back my money so I sought legal advice and closed down my NCB account and went to another bank that was reffered to me through my employer.

    Today I recieved notice that NCB has return 2 of the overdraft fees but are still holding the one; and just tacked on another for the charges that came out on 5/7 !! If they put the money back for the initial overdraft fee then my account was not overdrawn.

    Like I said; get a different bank. Shop around and find one you feel you can trust. Some banks will allow you to overdraw your account by a set limit BEFORE they start charging fees.

    Hope this helps you Beth.

  78. alishia says:

    I have a check that was placed on hold because it was more than $2,700. well when the check was placed on hold my account was $-200. Well the next day the back took the $-200 out of the check which was on hold. then then I made a withdrawl of $65. that was also taken out of the check which was on hold, which was reflected on the account. I was paid from my job about $630. Now that should have put me in the positive with out the overdraft right. Well that is what I thought but not according to the bank. I withdrew $450 and there was $39 also coming out of my account. Well according to the back my total available balance was -15.47 tell me how in the world did they get that????? If I spent less than the $630 I should still be positive SINCE THE -200 was taken out of the on hold amount 5 days prior to me recieving the $630.

  79. alishia says:

    @bmanny: So if the account is negative $200.10 this includes the overdraft fees already, then there is a deposit of $200.50 then a deposit of $639. a withdrawl of $450, a withdrawl of $39.80 what should the balance be????? The bank got -15.47. Now I am not a genious but I am no idiot either but all it should have take to put the balance in the positive should have been 200.11. then the $639. minus $489.80 should have left me with over $150.

  80. natcat86 says:

    Ok, all of these posts complaining about overdrafts are ludicrous. I work for one of these major banks that were mentioned above, and know for sure that any charge you incur was not done out of spite, nor was it done without having any reason. If you deposit a transit check (meaning a check payable to you from a different bank)after, say 2:30 p.m. your bank has most likely cut over to the next business day. That means if you make that deposit on a Monday after 2:30, your bank is already processing for Tues. If you make it on a Friday after cut over, your bank is processing on Monday’s business day, meaning your check will not be available until Tuesday. I don’t see how this can’t make sense. If you deposit a check payable to you written off of your bank, it will be available immediately. Cash works the same way. As for all of you complaining about overdraft charges: your bank takes the end of day post, subtracts any items that have been pending to expire- meaning pending to actually post- and adds any credits for the day. That means, credits that act as cash or on-us checks. It will not consider your payroll from another bank. If that leaves you in the negative, then you sould have thought about it sooner. Some banks will give you some leeway if it’s your first offense, but most banks give you a set amount of refunds before they won’t do it any longer. They figure that you already know how they work, and you’re an adult and should be responsible.
    As for holding large checks- as an employee, I will not lose my job because you want your 3000. 00 available now. Because when that check comes back insufficiently funded, I will not only be hearing from you who can’t figure out why you are 3000.00 in the hole, but I will also be hearing from my manager, my district manager, and HR informing me that I am fired for having such losses as a teller. If you are depositing a credit card check, a personal check from out of state, a check you got in the mail for an unknown reason, some tax refunds, or if you just plain don’t have the funds to cover it were it to come back unpaid, expect a hold and don’t complain. We’re doing it to cover our butts and yours. Just because it was your mom who wrote you a check for 5000.00 doesn’t mean it won’t bounce. And just because it’s an “official check”, or “money order” or “cashier’s check” doesn’t mean it hasn’t been altered in some way unbeknownst to you.
    Oh geez, also, thank us because someone could steal your checkbook or your card, write themselves a large check, deposit it, and you’re screwed now. That’s what holds are for.

  81. Ceruttiv says:

    Maybe if everyone stopped spending the money they didn’t have, no bank would be able to charge them a fee. Wake up & smell the industry. Don’t spend the money if you don’t have it & there won’t ever be a problem.

  82. Ceruttiv says:

    @billhelm: Totally agree. Everyone is so quick to blame the bank, but honestly if you kept a checkbook correctly or even did simple math anyone can save themselves fromthe “big bad bank”. If you have ten dollars in your account and spend fifteen duh there is going to be a penalty.

  83. Ceruttiv says:

    @fashionista: Well lets see how your new bank deals with a similar situation. regardless you screwed up, spent money you didn’t have yet & duh got a fee. Wake up to the industry every bank is going to do the exact same thing, they might refund one to keep you happy, but don’t count on it happening all the time. Bottom line you screwed up your account & of course there is going to be a penalty. Welcome to the new millenium.

  84. Ceruttiv says:

    @AngryKat: Has nothing to do with the bank, when putting something back on your card, or holding the money in your account talk to Walmart.

  85. Anonymous says:

    I had trouble with National City due to being overdrawn and the overcharge. Yes, the overdrawn amount was my fault, and I was charged the usual $36 for it, but the letter they sent me to tell me I was overdrawn was dated the 19th of the month. I received it on the 24th of the month.. 5 whole days .. the post date on the envelope was the 22nd of the month. They held the letter for 3 days before mailing it.. which incurred another $8 charge because I didnt “pay” it in 3 days. (from the 19th).

  86. William David Bucur says:

    Thanks ok just recently they charged us 5 overdrafts. There was a transaction in my account for 254.00 I had the money to cover it in there. While in pending they put a hold on the money. The very next day it did not show in my account. The next day it was back so they put another hold on the money. Meanwhile there were 4 more little transactions coming out of my account. They had 2 holds on my account for the 254.00 which caused the 4 items to overdraft. None of these 4 items were more then 25.00 in pending. They tried to hit me with 4 overdrafts. I called bank and complained. They said they would fix. However that night 3 more items overdraft becuase of the first overdrafts. They did not believe me when I said things disappear from my account then come back the next day or 2. I started taking screen shots of my account. Went to the bank to prove it, after alot of fighting they fixed my account. Just last night my work deposit was in my account already cleared, tday it is gone from there. You have to watch because I was told it is all computerized and stuff does come and go. Try it for yourself take screen shots dailey for sevral days and you will notice things come and go.