How can you overdraft when you’ve deposited more than enough money to pay for the charges? Why, when 5/3 Bank decides to only let the first $100 of the check through.
Chris had a balance of $68.08, deposited a check for $619.49 and then made several payments and purchases totaling $180.86. Thanks to 5/3′s new policy, he racked up four overdraft charges. When he contacted executive customer service, they agreed to waive one of the charges, but defended their right to charge fees because 5/3 had recently sent a little notice in the mail along with the account statement.
“My girlfriend and I have just moved and now I have a huge chunk of the security deposit our landlord was expecting missing, and I don’t know what I’m going to do,” writes Chris.
Up to this point, Chris has been able to deposit paychecks at a teller and, “since it’s from another local bank, any transactions that I do on the day of deposit are covered the following day, in entirety.”
Chris’ story illustrates the need, even in this age of online billing, to keep an eye on account notices to keep an eye out for any new fee schemes your bank or other service provider may have invented.
Chris writes, “right now after this matter is resolved I’m planning on closing my account.”
(Photo: Getty)
UPDATE: Under the comment name, “CARDBOARDROBOT,” Chris answers some of your questions and offers clarifications:
This was a local check. It happened to be my paycheck. I’ve deposited it every two weeks at the same 5/3 branch for over a year. Every time I deposit the check, it is made available to cover everything at midnight when they process transactions. I was expecting it act the same way it had for the last year.I guarantee you if this was my first time depositing a check in a few months, or it was an out of state check, or whatever other circumstance it could be, I would have exercised more caution. But why shouldn’t I expect the check to cover everything that was going through that midnight, if it had every time before?
I’ve learned a ton of lessons from the consumerist on managing my money, and actually use Ben’s spreadsheet that was posted a while ago to track my money. Overdrawing is a complete rarity now, and if it happens, it’s something that I’ve clearly overlooked and I assume full responsibility, and never ask to get the fee reversed.
Again, this happened because fifth/third changed a policy. The policy was to then cover ONLY the first $100 dollars of the check. I have adapted my spending around this now that I am aware of it, and have not overdrawn since.
And about their notifications..
They sent out paper notices, apparently, but I just shred my paper statements, because I track everything online. The notices were not included in the PDF along with the online statements.
They also had a bit clearer warning on the page you see when you first log in. I suppose all these years of web browsing has trained me to ignore anything that is bunched in with a column of ads.(their notice advertisement was located just above an ad for a mortgage and a credit card. I just disregarded that entire column).
I feel that they should have something in red, or something more in plain site, or even a pop up window. I’m familiar with web technologies, and know that there are definitely ways they could have improved their notification of this change online.
PS: The ask staples about the .94 cents. I went to make copies, and their machines didn’t accept cash or change any more. Only plastic.
More From Consumerist
-
If The Bank Hands You A Counterfeit Bill, You're Probably Stuck With It
-
Chase Does Us All A Favor, Nixes Overdraft Fees For Purchases Under $5
-
Judge Tries, Again, To Slap Wells Fargo With $203 Million For Overdraft Policy
-
Facebook Wants You To Vote On Policy That Wouldn’t Let You Vote On Future Policies
-
Sovereign Bank Has Kept My Home In Short Sale Limbo For Almost Two Years
@lizzybee: Payroll checks can, and do bounce. I have worked at startups. I know this first hand.
I was moved into 5/3 after they acquired Old Kent about 5 or 6 years ago. I loved Old Kent, my 87 year old grandfather retired from working there and never had a problem, but 5/3 took over and it was obvious from the start that many changes were going to occur. After my first issue with shady fees, I went to them, they immediately tried to discount my issues with “this is standard practice” blah blah blah….I closed up shop and took my money elsewhere. No problems after I left.
@North of 49: Ooh, ooh, or they charge an overdraft because they *might* have gone negative… or they won’t build a real branch, only those crappy in grocery store branches.
Sorry, I really hate banks. Too bad The Consumerist wasn’t about circa 2001/2002, or I would have a geat one to tell.
@ret3: So, it could also be 160%, right?
I like that they would let you spend more than you actually had. That was pretty nice of them.
Try going into a local branch and talking to a bank manager, or someone who is clearly in some sales oriented roll. Stand firm on your argument/position, after all, they did have your money.
I was able to do this at BoA the other day for almost the exact same situation and he was clearly frustrated with the amount of time i was taking away from him closing loans and whatever the hell else he has to do that was more important.
Point being I won for a change.
My first thought is to see if you can convince your employer to deposit your paycheck by ACH. You save a trip to the bank every week, and your money is available right away, banks never place holds on ACH deposits as they are are considered “good funds”.
2nd, any time you deposit a paper check into any financial institution, they have the legal right to “hold” the funds deposited based upon their published funds availability policy. They are required to make $100 of the amount deposited available on the day of deposit, but everything else can be held. Many FI’s waive the hold period for payroll checks from a local company, or for customers whom they feel have a substantial relationship with, such as customers with large balances on deposit, or large loan balances.
It seems unfair that they can hold your deposit, sometimes for a few day. However, FI’s were taking substantial losses from people who would deposit bad checks and then withdraw the funds. If you don’t like these policies, blame all of the consumers out their that ruined it for the rest of us by attempting to beat the system previously.
Get a new financial institution, preferably a credit union. Not accepting the full amount of a payroll check when depositing it is not acceptable. Although I haven’t done that in decades because I’ve always used direct deposit since then.
I would probably also put a bug in the ear of either the Comptroller of the Currency or the Department of Commerce Division of Financial Institutions.
Here is the state’s complaint process. It might be easier to contact them first, just to find out who to complain to.
Disclosure, I used to work at the Department of Commerce. Good times, telling my now wife and her sister how to file a complaint after their mother died, and the bank was trying to rip them off. Railroad retirement instead of Social Security (SS pays ahead of time, RR pays behind, but the manager was treating RR like SS). That b****h got taken down for embezzlement. And I helped!
@whydidnt:
Reminds me of when my dad was forced to have direct deposit for his paycheck (civilian DOD employee), and the bank would actually honor checks and withdrawals from the account, even though technically it wasn’t there because somebody had forgotten to run the computer tape to the bank. We’re talking about thousands of accounts in this area.
@Xerloq:
I have Wells Fargo for my home mortgage -Er, at least for the moment. They ROCK! every time I have had to call them they have been the most professional courteous people.
I bought my current house on the 3rd of November which means I got about a year’s worth of low tax bills courtesy of the previous owner. However since I live in Floriduh my insurance rate also skyrocketed leaving my escrow several thousand dollars short. When I asked about how much the interest charge on this was going to be, the gentleman on the other side of the phone said ,’No interest charge. We’ll pay it up front, and you can make up the shortfall in payments or just wait till the end of the year’. He even suggested putting the money I would have paid ahead of time into an interest bearing account to squeeze a few extra dollars from this free loan. All this from a bank!
I couldn’t be happier with them as my mortgage lender.
Also Washington Mutual has for some reason been holding direct deposits from my account. I am rarely if ever overdrawn, and usually have several hundred dollars in there at any one time. This unsavory practice began several months ago, and I have had it with them. They also will hold several debits, and then process all of them at once in hopes of overdrawing your account, and collecting a fee.
I’m not one for conspiracy theories or anything, but I have suspected for years that POSTING is total bullshit and just a way for banks to squeeze OD charges.
We’re in the 21st century and the age of paperless transactions. You will never convince me that there isn’t a way for banks to confirm checks automatically and virtually in real time.
I mean there’s no friggin reason why a check from the IRS or some other major institution (or even the same creditor, or from individuals for that matter) has to sit around in limbo for up to 2-3 business days.
And these checks should go in in chronological order (when they’re received, even in the same day) not in some largest-to-smallest order.
When I was living paycheck-to-paycheck, little things like the “largest-to-smallest rule” or sitting on my checks for 2-3 days cost me a few fees when I was struggling to make ends meet.
When do you know that your check has cleared? And that your available balance is indeed what you have in your account?
@olegna: You’re on point with all of that. Can’t we get Congress to do something about this?
Not sure what HSBC’s stated funds avail policy is, but when I deposit a check that’s larger than the amount I have in my account, they only make available as much as I already have in my account. (Ex: I have $65 in my acct and deposit a check for $200. They make $65 immediately available and take up to 5, FIVE!, business days to make the other $135 available.) I was told by a teller that it’s so they can be sure that I can cover the cost of the check if it bounced or happened to be fake.
It sounds reasonable, but it still feels scammy to me.
5/3 Bank is a Cincinnati based bank there first branch was between 5th and 3rd in downtown cinncinnati..Ive been a customer of theres for 15 years and they are horrible i hate the bank but there so many its convienent in the cincinnati area. Even b4 this time im gonna tell you about the bank has done that to me many of times. 2 days ago i deposited a check for 400.00 into my fifth third account it just happend to be a day after a national holiday i had roughly 2000 dollars in my accountafter my current deposit but had bills to pay due to there 2 day delay for the chase manhattan bank in which my paycheck was wrote on my account was 117.00 overdrawn…The So called bank charged me 362.00 to be overdrawn 117.00. It dont take rocket science to see thats bank theft..Hypotheticaly if someone walke into 5/3 bank and withdraws 300.00 from my account they have commited a crime but the bank can steal money from your account without facing any reprocussions. So obviously i called the bank and they had in so many terms told me to get over it. When i asked them to credit my account they bluntly told me they would not. I then told them if they wouldnt replace my money i was gonna close out my account after 15 years. The Call taker then told me “Do You Think We Care Weather You Keep Your Account With Us” “We Have Over 4 Million Customers Your Business Will Not Hurt Us.” I then asked to speak with her supervisor and she told me she was the supervisor. Ive since sent an email complaint to the bank but have not got a responce. Seems to be alot of people on here Defending this Bank they must be bankers in Desquise. My Daddy always told me theres 3 types of people you never trust Lawyers,Insurance Agents,and BANKERS im begenning to think hes right…