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Clifford Phillips paid $38 for a cup of coffee. Was it farmed on the moon? Nope, it was overdraft fees. [MSNBC] (Photo: Groovnick)
ok. So he didn’t pay $38 for coffee. He paid normal price + his banks over draft fees because he didn’t understand the following:
A) He can have overdraft turned off and just have his card denied
1) but then he would be embarrassed at the coffee shop
B) He doesn’t manage his money closely enough to know how much he has in his account
C) He didn’t call his bank and ask them to remove the fee (a lot of the times they will)
@Bladefist: He said he would have rather had the embarrassment of having his card denied, rather than get hit by the fees.
But someone has to cue the “he shouldn’t be buying a cup of coffee if he has no money in his account” bit.
@pecan 3.14159265: No, he shouldn’t be buying a cup of coffee if he does not even have the $2 in his checking account required to buy that cup of coffee.
There’s no excuse for not knowing you have less than a few dollars available to spend.
@supercereal: I wasn’t disagreeing, I was only saying that he stated that fact in the article. I agree he shouldn’t by buying a cup of coffee – but that’s obviously not what he felt.
@Bladefist: I didn’t know I didn’t have the money! I do not know my bank’s deposit or withdrawal policies! I just put money in and take money out. I figure I’m fine until I overdraft, but overdrafting makes me a victim so I can’t be to blame!
In a related, non-blaming note, this person should get a line of credit on that checking account. I have mine on my CC, but I rarely use debit anyway. Just don’t treat it like a “real” line of credit like that rocket scientist (literal) a few weeks ago.
@Blinky987: I tried to get a line of credit on my account, I was declined. Having not used credit for anything in my life apparently doesn’t help.
@Bladefist: Well despite the fact that they should deny transactions by default, this is no different than a payday loan. This guy was charged an apr of like 255,500% on that cup of coffee. Any overdraft system the banks use should be counted as a loan. And be charged no more than a 30% apr.
But they are basically trying to call this insurance, when it really is a loan.
@Corporate_guy: It seems to me that, if a fee / charge / whatever is flat, rather than being calculated as a function of the credit extended, it’s pretty much meaningless to calculate an effective interest rate. Of course, it does make for good sensationalist journalism.
Now this is an intelligent idea. Way to think CG, this could probably be investigated by whoever is in charge of banking laws. The classification sure does point to a loan rather than insurance. Way to think, I’m impressed.
@Bladefist: No bank I’ve ever heard of will let you “turn off” overdraft protection.
There are many that will. Have fun dealing with collections agencies though. Oh yeah, you will also get reported to the cops for writing bad checks.
@crashfrog: I don’t have over-draft protection. I’ve never had it. Ever.
@enderx: Unless your statement is only trivially true – you don’t have a checking account with any bank, perhaps? – you almost certainly do have overdraft “protection.” Wells Fargo absolutely will not let you open a new account without it – as I found out when I set up a checking account just for online purchases, where I’d transfer the funds in as I needed them, so internet hackers couldn’t hoover all the money out of my account. Of course the whole idea is somewhat pointless with overdraft “protection”; now they can make purchases on an empty account and drain my bank account $39 dollars faster with each one.
Like I said there’s never been a bank I’ve ever heard of that will let you opt out of overdraft “protection” on a checking account.
@crashfrog: Mine does.
@stopNgoBeau: What bank?
@Bladefist: dunno about you, but at my bank (US Bank), I was told that you couldn’t disable overdrawing on your account anywhere other than at the branch ATM due to the way their electronic debit system was setup. really the only way to prevent it is to know how much money you really have.
@nemamook: Your bank (also my bank until I can verify that my direct deposit has been fully transferred over to my credit union) sucks balls. They initially got my business for 3 reasons:
1. I was lied to and told I could transfer money between my account and my landlord’s account online, when in reality, I’d have to go to a branch to do it (no different from if I wasn’t a US Bank customer).
2. $75 in free groceries because they had just opened the branch inside a new Safeway
3. The bank teller was pretty.
@Bladefist: so.. either you work for a bank,.. or you’re the only person in the world that condones the crooked overdraft policies.. either way.. you’re a tool. die.
@Russ Savage: ODF’s are easy to avoid. Know how much money you have in your account! It’s really that simple. Or, you know, be a simpleton and pay cash. In a similar vein, DIAF.
@Kaellorian: Not that Russ Savage’s comment is worth dignifying and I’m not agreeing with his charming rhetorical flourishes, but in response to you: “Know how much money you have in your account! It’s really that simple.” — you’ve really never, ever made a mistake? A math error, had a deposit problem, shared a joint account where one of you forgot to record a transaction, had something clear oddly?
I keep a $300 cushion in checking (when the register says $0, there’s really $300) for exactly these problems. I’m pretty responsible and careful, but they’ve happened often enough that I’m wary of accidentally overdrafting.
@Eyebrows McGee (on Twitter: LPetelle): like it or not you agree with me.
@Kaellorian: wow.. so now if you use cash you’re a simpleton?
I never get overdraft fees.. because i know how much money i have.. BUT, that doesn’t mean that overdraft protection should be a standard service. it should be offered. and even so.. they screw people with the order of purchases.
banks are scum.. and anyone that defends them is fine with screwing people over. ohh and family guy used to be cool like 6 years ago. your avatar just reflects your intellect level. I hope your aids takes care of you quick.
@Russ Savage: How eloquent.
Still, overdraft policies are not “crooked” in the vast majority of cases. I would guess that most of them occur simply because the account holder can’t be bothered to learn their balance. As in this case, if a person does not have a couple of measly dollars available in their account, then the person deservedly risks facing perfectly legitimate overdraft fees.
@supercereal: “most of them occur simply because the account holder can’t be bothered to learn their balance.”
When they’ve happened to me, it’s because I keep only the cash I’m actively using in checking … the rest is in savings earning interest. (“Just in time” cash management, let’s call it.) I always know my balance. Typically an overdraft has been a math error mid-month when I haven’t reconciled the statements yet (more usual before electronic banking, but can still happen if I don’t see the error because, say, three checks haven’t cleared yet and then they all clear that day and THEN I notice I think I have $80 but I have $60), or a general mistake that occurs when EVERYTHING in life goes to hell all at once and so I have to write a check for an emergency intending to transfer funds immediately and I forget to do so. Or my husband writes a check and forgets to record it, and then I write one on top of it.
Of course, our credit union only charges us $5 for the overdraft transfer of savings to checking, so it’s annoying, but not dire. But it’s easy enough to make a mistake.
We now keep a $300 cushion in checking (when the register says $0, there’s $300 in there) for just these problems, but we still managed to overdraft once since we started doing that. We both on the same day went, “Oh, shit, my bar membership renewal is due like now!” and we both did an ETF (from the state’s website, not our bank’s) while racing out the door — him from his office to court, me from home to class — both figuring the $300 cushion would cover our $289 fee until we had a chance to transfer the money and record the transaction that afternoon, never imagining the other had ALSO left their bar membership ’til the last possible moment. Which, of course, it would have, had we not BOTH ETF’d $289 on the same day. Only cost us the $5 in overdraft, but it was still irritating.
@Eyebrows McGee (on Twitter: LPetelle): So you’re saying he’s right.
@supercereal: they’re not perfectly legitimate if you have multiple bank accounts and forget which one has money in it, and would rather be denied a purchase, than extorted.. i don’t need to be eloquent to debate with bankers like you.
@Russ Savage: Russ, you’re doing an exeptional job of reinforcing the negative reputation of Facebook commenters here.
Do you propose all overdraft fees should be eliminated? If so, how to you suggest banks should recover the cost of those overdrafts? If they don’t charge, they’ll roll that cost over to their other customers. I don’t want to pay for your overdraft.
@Billy Gillispie’s Job Application: I think we’re talking about the so-called Courtesy Overdraft Protection here, where the bank lets you overdraft on a non-PIN transaction when the system knows there are non-sufficient funds in your account.
This is ostensibly to spare you the embarassment and horror of being denied for a cup of coffee, a pack of smokes, etc. but is actually a gold mine for the bank as has been discussed.
This is the “overdraft fee” which should be eliminated by requiring ALL banks to give you the OPTION to ‘opt-out’ of this ‘protection’ which most banks do not (and which keeps getting ‘erased’ from every ‘consumer friendly’ bank bill that goes before Congress.
@New Coach plzkthxbai: I don’t care what you think I’m reinforcing.. it’s about time people get upset about how corporations are treating people.
I don’t want them to be eliminated.. that’s retarded.. i just want them to be opt in.. I’d rather be “embarrassed” in line somewhere, and have to make a quick phone call than get raped. and I want the charges to come out chronologically.. not according to amount. that’s just a sneaky trick. they only care about their bottom line, and they cover it up as a service to you. if it’s a service, then why don’t you let us choose how our services are set up, huh, banks????
@Bladefist: Regarding bullet C in your post; What planet do you live on? Those fees don’t get removed on this one.
@calquist: Same thing happened to me once. Not with cheese curds though, coffee just like in the original story. Except it was twice.
I bought myself a coffee and drank it there in the store. I then decided I wanted another for the road, so I got another. But since I knew I was low on money, I went for the small. Except what I didn’t realize was that I was actually in the negative already. So I paid over $60 for two small coffees. The real kicker was realizing that I would have paid half as much if I’d just ordered them at the same time.
@Bladefist: I think bladefist’s statement is correct except for A. turning off your overdraft. I never heard of a bank doing that, if so please list the bank’s name and phone number.
(I’d like to know, maybe I could get an account.)
Trust me…When I bought items that cost me 4 or 5 bucks, it ended up costing me an additional 33 dollars more.
And what “Billy Gillispie’s Job Application” said…”Do you propose all overdraft fees should be eliminated? If so, how to you suggest banks should recover the cost of those overdrafts? If they don’t charge, they’ll roll that cost over to their other customers. I don’t want to pay for your overdraft.”
Why can’t we the Consumers, just be more careful. It’s our responsibility, right?
its bs, they don’t leave overdraft on by default to save you from embarrassment, they don’t do it for you, they do it because it is highly profitable for them and it is the type of thing that is about as regressive as it gets. the low income are more likely than anyone else to overdraft. its just a given. by default it should not allow you to overdraft. you can order 5 cups of coffee and get dinged 5 times paying hundred+ for your mistake, its a ridiculous abuse that comes from lack of legislation. i think they cracked down on this in the uk.
@diasdiem: I agree completely!
@diasdiem: You can’t argue with that!
Insert clichÃ© Starbucks joke here.
@diasdiem: This must be from Starbucks.
@diasdiem: photo is from Caribou Coffee.
(does not mean that “$38 coffee” is not from starbucks)
I wouldn’t pay $4 for a cup of coffee but, then again, I’m not this dude.
Im not normally one to blame the OP but this was plain irresponsibility. From what I can tell in the article, It’s not like he had a previous debit double dip or something. He just didnt balance his checking account and didnt know he was broke.
he didn’t pay $38 for a cup of coffe. He paid a fine because he can’t do basic math. People if you don’t have enough money in you account DONT USE A DEBIT CARD OR WRITE A CHECK!
@Ninja007: They guy could have overdrawn by one cent.
@Corporate_guy: so? Bad math is bad math. I never have this problem because I always know what is in my account. Every time I get paid I pay my bills and then move everything except for $.01 into my savings. I’ve been doing this for several years and have never had a problem. I do my math.
@Ninja007: LOL, and there it is.
You do realize that sometimes shit happens, right? And that banks like to submit your transactions out of order for ~convenience~
Yeah shit happens. But when it happens in business and you spent money you didn’t have, you get shit on.
The title of this piece is dishonest.
If you want to drive home another example of banks using fees to drive revenue, go ahead. Don’t say that the cop of coffee costs $38.
Also, you already did a similar piece on Wedensday in the sense that you covered the mandatory opt-in program for overdraft fees. [consumerist.com]
And on Monday. [consumerist.com]
@Blinky987: I meant “last Monday.”
@Blinky987: It is perfectly appropriate to say he paid 38 dollars for a cup of coffee. Because that is what he was charged for that purchase.
@Corporate_guy: Show me the line-item receipt where the coffee costs $38.
@Corporate_guy: You sound like the horrible writer of this article. (and all the alarmist garbage here lately.)
His receipt says ’4 dollars’. (or whatever the amount of the coffee was.) He didn’t pay 38 dollars for a cup of coffee. If you can’t see that, you’re what’s wrong with north america.
@enderx: Clearly, you are correct. The rest of it was shipping and handling, brokerage fees, interest and waste disposal of said coffee. Slice it anyway you want but he spent 38 bucks and all he has to show for it is A CUP OF COFFEE.
@Skeetz: Wrong, he bought the cup of coffee, and bought an overdraft fee from the bank.
The bank has no obligation to “float” this guy the money he overdrafted. Their terms and conditions (which he agrees to by signing the credit card slip or entering his PIN) indicate he’ll be charged an overdraft fee if his account drops under $0.
The bank is not at fault here…Mr. Buys Coffee With No Money To Cover It is.
@Billy Gillispie’s Job Application: That doesn’t make me wrong. He still spent the money and all he has to show for it was the coffee. Regardless of where the funds went, he only got a coffee for it. Argue all you want about where the money went but he got a coffee for all his effort.
@Blinky987: Agreed. If I were to get a $100 parking ticket while running into the store for 10 min, I wouldn’t say parking cost $600/hr.
WaMu just did this to myself and my wife. We are getting rid of the account so next to no money is in there. When we forgot to change over 3 things that go out through direct deposit, they hit us 3 different times instead of just denying the claim.
If the banks charge a hell of a lot less, this would be a really great feature. But 35 bucks everytime?
*sigh* Do you guys not understand the alternative to overdraft? Being sent to collection is the alternative. That is much worse.
@TecmoTech: *sigh* How is that the alternative? If you go to the grocery store and realize in the checkout line that you forgot your wallet (or your card is declined) do they send you to collections? *sigh*
Do you not understand the concept of letters or email? That’s what happens when your bill goes unpaid due to a disconnected auto-pay. You get a piece of paper wrapped in another piece of paper with a third piece of paper stuck to the outside in your mailbox. *sigh*
@LegoMan322: Wamu didn’t do that to you. You did that to yourself.
‘you forgot’ something.
Okay, you forgot something.
Your bad! Guess you won’t do that again will you? Though, I’m guessing since you’re blaming the ‘big guy’ for your inability to properly remember your funds, I’m guessing not.
I had a friend pay $38.00 for cheese curds the same way. That story always cracks me up. And he knew he was getting the overdraft fees, but the tempt of cheese curds was too strong.
How is this worthy of its own post, Consumerist? Seriously? It’s like reading an Onion article: “Area Man Charged Overdraft Fees”.
@outoftheblew: Consumerist’s editorial opinion is that any fee charged to a customer is inherently immoral, regardless of context.
It’s my editorial opinion that unjustified whining about issues like this cheapens Consumerist, and makes it less effective when real issues crop up.
@Billy Gillispie’s Job Application: YEAH! Let’s start a consumer advocate site with a twist! Instead of supporting consumers, we’ll take the approach of “Fuck consumers! Yay corporations! Kick the poor people in the teeth! That’s what they deserve for being poor!”
We’ll make millions!
.. Wait, no we won’t.
(Oh, I’m so sorry I cursed, was that inappropriate? Maybe I should be jailed by teh Internets Police.)
i bought a $34 20oz coke once. i was pissed.
@JohnDeere: Which version of “pissed” — American or English? If English, it would really explain things.
@RandomHookup: You win.
This can happen to you even if you no how to do basic math. Mr. Sam rented a tool and the tool rental place put a $500 hold (deposit) on his account. Yes he paid with Visa debit card as we use debit for just about everything because we don’t care for credit (or debt). He didn’t know about the hold and went about his weekend business and ended up with about 15 overdraft charges totalling more than $500. The bank did refund all the charges once we were aware of the problem (Monday). Mr. Sam wouldn’t have cared if he had been declined (really, he has no shame) at some point during the weekend and we could have easily shifted monies around between our many accounts and headed off the major problem. While the bank refunded the charges it still took time and energy to do so.
@SadSam: You should be using credit for things like that. You don’t care for credit, because you only see it as a loan instead of a shielded debit card. You DO NOT have to hold a balance and pay interest on a credit card.
@Corporate_guy: CC companies will simply cancel your card if you don’t maintain a balance, unless you’re paying an annual fee for your card.
@crashfrog: And that’s a waste of money: Paying a fee for a card you never use.
@crashfrog: I have three cards that never carry a balance and don’t have annual fees. I’ve had the oldest of them for 12 years and carried a balance once (the month I got married). The others are 10 and 3 years old and have never had a balance. I’ve never had one canceled on me (knock on wood).
@crashfrog: I also have 3 no-fee credit cards. Two of them I hard ever use. I’ve had them both 18 years and the CC companies haven’t threatened to close the accounts yet. (Not that I would really care if they did).
I might even use the other two cards if they had better interest rates, but they’re not even trying to be competitive, so its their loss.
@Corporate_guy: Not everyone has a credit card. You do realize that if someone has the money, they can use it any way they want, right? Without being worried that it’s going to suddenly be “gone” for “a while”?
I like how you guys expect the bank to magically know Mr. Sam has outstanding items.
Same goes for the guy in the article. Even if he doesn’t want overdraft protection, he will still be allowed to buy the coffee. The bank doesn’t know his outstanding items. For all the bank knows, this is the only transaction he is doing.
@SadSam: Mr. Sam should have read the rental agreement that he signed which tells you a deposite is being taken. Companies cannot take money from your account without permissions, and holds ond funds do not cause overdraft fees (although they may cause decliend cards since they do absorb part of your balance)
I have over draft protection, and while I have gotten fees before, it was my own fault for not watching my balance. Any time it wasnt my fault, and even sometimes when it was, my bank, without question, removed them.
If the intention of this story was to fuel the fire for our new found hatred of banks, this is pushing it. And, I’m not even blaming Consumerist. I have a major issue with MSNBC’s reporting of this situation.
I’ve always been very aware of my funds at all times. My wife has not. When we first moved in together, we ordered quite a few “$50 pizzas”, as I came to call them.
That story is nothing.
I used to park at my work and pay the parking fee (approx $5 per day) with my debit card. Well an automatic debit went through that I forgot about which made me overdrawn. Soon after, all my previous week’s parking charges (4 total) went through, each of them netting me another $25 charge. Total of around $125 in fees for the privilege of the bank lend me a grand total of about $30
The one and only time I’ve been charged an overdraft fee: Just moved and opened a new bank account. I was out at a restaurant a few days later and wanted to treat, but didn’t have enough cash on me. There was a convenience store with an ATM next door so I went to see if the deposit I had made in opening the account had cleared. It hadn’t, and I was overdraft feed $35 on the $1 the ATM charged to check my balance. That was fun.
@wickedpixel: OK, I think you win this little contest!
@wickedpixel: My favorite personal overdraft story:
I’m at my ATM, and the ledger balance is $8, the available balance is $1,100, give or take. (My paycheck has been direct-deposited.)
I even go inside the bank to ask how much money I actually have, and they tell me $1,100.
So I withdraw $20 for spending money, get gas and pick up my dry cleaning. My available balance after the withdrawal, at least is about $1,080.
$108 worth of overdrafts later, I go back into the bank and am told that the ledger balance is what you always pay attention to. Some holy hell and a closed account later I don’t pay anything, but this is one of the big problems with tracking your money via either your bank’s system or even in your checkbook – you’re still in no small part at the mercy of when the bank decides to credit or debit your account.
@wickedpixel: That’s like the American Express commercial where the guy’s Visa gets declined at a big business dinner.
@wickedpixel: See, I feel sorry for you in this situation. You were clearly trying to be safe by checking the balance first, but just didn’t realize about the 1$ fee.
The person in the article was walking the line so closely that even a coffee would push him into overdraft. When was the last time he checked his balance, did he know about any automated withdrawals etc.?
I often joke that I once had a $36 dish of gelato, since it was $6 for the gelato and $30 for the parking ticket, but that doesn’t make it true.
I think overdraft fees are a total scam, mind you, but it’s a scam I have a hard time having too terribly much sympathy for, given that not spending money you don’t have keeps them away. As does, you know, paying cash for something as piddling as a cup of coffee.
@Jacquilynne Schlesier: A nice, rational perspetive…thanks.
Alternate headline: “Man buys cup of coffee he can’t afford.”
@humphrmi: Shut up, that’d be responsible and rational. Not happening here.
@humphrmi: Earning that star today, I see.
You people are so quick to blame to OP. Really, WERE YOU THERE? Chances are, he wasn’t thinking “Well, I don’t have enough money, but I’ll do it anyways.” I’m not saying its OK to knowingly overdraft, but yes, shit happens.
I believe there was a story on here about someone who had a hold on their account and believing they had sufficient money in their account, made a purchase that got overdrafted. Not from irresponsibility, but because they honestly believed they had sufficient funds in their account.
Please tell us who we SHOULD blame.
How about a little personal responsibility?
@Nick1693: Uhm, that’s still the OP. you’re not looking at it the right way. How’s it the bank’s responsibility? Ignorance is a shitty excuse.
@Nick1693: It was a cup of coffee! He didn’t have enough money to cover A CUP OF COFFEE!
When is personal responsibility going to factor into this?
@Nick1693: Ignorance is not an excuse.
@I_am_Awesome: I never said anyone should be blamed, I just said mistakes happen.
@enderx: It’s not the banks responsibility, thought it would be nice to be forgiven now and then…
@pecan 3.14159265: Personal responsibility is a part of it. All I’m saying is that the commenters don’t know what happened and shouldn’t assume that he knew he didn’t have enough money. “When you assume, you make an ass of you and me.” =)
@Billy Gillispie’s Job Application: Never said it was, but I think the people in the comments are a little too quick to jump to blaming the OP and not consider that he may have honestly thought he had the money in his account, which is why I gave the example of the hold.
Banks DO forgive now and then, so if the bank adamantly refused to reverse that fee, my suspicion is that this isn’t the first time this has happened to the OP. I hear this stuff multiple times a day, every single day. Trust me that when it’s something that isn’t typical, we do everything we can to help the customer, but there are a lot of customers who do this stuff fairly often and refuse to take responsibility for their actions.
@Nick1693: If the OP didn’t have enough sense to know he had less than $4 in his bank account, he has no business running around out in public going to a coffee shop. I agree with the others here, he needs to take some personal responsibility… and realize he is an idiot who must’ve failed basic math.
Admitting he has a problem is the 1st step toward recovery…
I went on vacation once and didn’t pay much attention to my bank account and ended up getting a bunch of overdraft fees. I was with US Bank at the time, and the way they charged me the overdraft fees meant instead of $80 in fees, I had nearly $250.
You have an available balance and an actual balance. If anything clears while your available balance is negative, they charge you the overdraft fee, regardless of what’s actually in your account. This way if you have 8 separate transactions at once and only the last one makes your available balance go negative, when all eight clear you will get overdraft fees on all 8 of them instead of just the 1 that brought your account negative.
Needless to say, I will never go back to US Bank after finding this out!
Another good case for not using debit cards. If he had paid with a credit card, he would have had several weeks to make the payment, and, in the event he couldn’t/didn’t make the full payment, the interest charges would have been much less than $35.
Woman charged $100 for library book.
PS: The book was 30 years overdue.
PPS: The book contained the secret to everlasting life.
PPPSSS: The ‘woman’ was actually Hitler in drag.
I had this happen recently as well.
Mine ends up with me being pissed at not only one but two companies.
To start with I was already pissed at my cable company. My card got caught up in the Heartland fiasco and canceled. I always forget which automatic payments I have linked to the card and which I have linked to EFT. Turns out that cable was one that was linked to the card. Yes, I should of caught it myself when it didn’t come out the first month but I didn’t so when the second one didn’t come out the cable company started sending me nasty letters, calls, etc. My POV is that they should of done that on the first one if an ‘automatic’ payment doesn’t pull, why wouldn’t you check at that point? Yes, I know I’m not blame free here but still upset me.
So anyways I went to pay the bill, knowing that I didn’t have any money in that account, but I would come the first, so I’ll just set the payment for that date like any online payment lets you do. Apparently my cable company doesn’t give you that option and at no point do they give you any kind notice that you’re on the last screen and the payment is going to process after this point. So I’m clicking next waiting for the point I’ll get to choose the date my payment is taken and all the sudden I’ve submitted payment from an account I know doesn’t have any money.
“Well shit”, I think. At least I recently set up overdraft protection on that account. It will hit that, I won’t have to worry about an overdraft fee. Get up that morning after starting to worry about the whole thing in the back of my head and check my account online. Sure enough, they did charge me overdraft fees. I have no idea why it didn’t hit my overdraft line of credit I had just set up but I’m going to find out this afternoon.
My sister in law once paid $35.99 for a song on itunes because of overdraft fees.
The story is deeper than the way it was set up and written, which was for laughs and mock indignation. The story should really be about the outrageous fees that banks charge when you make a mistake. They’re like speed traps. Yes, the OP screwed up, but the response by the bank is disproportionate.
I fail to see how this made it on Consumerist. The title is dishonest – I was expecting it to be an ultra-premium gourmet coffee beverage.
Instead, it’s just an overdraft fee.
Nothing personal to Mr. Phillps, but its your fault.
You trusted a profit-earning entity to look out for your better interest. It wont. Banks exist to make money.
Dont trust one single statement, balance, or phone call. Calculate to the penny exactly what you have as you spend it. Ill bet youll come up with a different number than the bank’s time/space balance algorighthm formula will.
Or you can keep buying $40 lattes and do nothing. The choice is yours.
If you’re bad with money, or have very little money, you shouldn’t buy expensive coffee and you shouldn’t order pizza. Pay cash, grow up and learn to manage your finances properly.
Ha, I got it worse than that before, I paid $39 for the “convenience” of them letting me go over my limit for a bag of chips. I knew the card was raked up I just bought a load of stuff online for Christmas and figures it would just be declined. The amount was 50 cents over.
The guy said it was for my convenience over the phone…right! you think paying 39 bucks for half a bag of chips is convenient? you have to call them to turn this “feature” off, and oh did I ever.
Am I the only one who keeps extra money ($250 for me) in my main checking account just in case of math accidents or forgotten withdrawls? I really thought that was the norm.
I don’t include it in the register balance & it has saved me plenty over the years.
I think the number of people financially able to cushion their accounts for such accidents is far, far lower than you realize. I guess it really depends on where you live now days.
$250.00 For real? I’ve got $14.00 until next Wednesday!! Yikes !!!
I don’t understand why the bank couldn’t just reject the transaction on the grounds of insufficient funds in the account. Allowing the transaction to go through and slapping on a fee seems like the kind of thing a loan shark would do. After all, if he doesn’t have enough money for coffee, he certainly doesn’t have enough for coffee+fee.
Better yet, take away the debt card privileges. If the man is irresponsible with his money, than it’s the bank’s duty to be responsible with its money so that the man will learn to be responsible. To take advantage of someone’s irresponsibility is reprehensible.
@HaldenHippolyta: Because banks…are out…to make money…seriously. They don’t care whether you’re responsible for not, they want your money. They get none if you’re responsible. They gamble and hold you accountable for fees and charges if you aren’t responsible, so they hope that you do make mistakes.
Reason why USAA rocks:
Non-Sufficient Funds (NSF) Fee ……………………. $ 29.00
No fee if you use Overdraft Protection.
Overdraft protection either charges your credit card the amount or debits your other account
I agree with Ms. Schlesier. (Hey J! It’s Bob from Fluff.)
She is nicer than I am, so let me rephrase it into Internet: It’s retarded to pay for cheap impulse buys with anything but cash.
The point of this whole story is not that he didn’t have the money to cover the charge, but that he didn’t realize he was “enrolled” in overdraft protection. According to the story, he’s not “allowed to cancel”. I’m not sure if it’s true the bank can stop him from canceling the service; but the whole article is about the automatic overdraft protection service banks force on their customers.
I hadn’t had an overdraft in years, until yesterday. I keep an old checking account around with a small partial direct deposit. I was paying off my Chase freedom card in full, and selected the wrong checking account.
I had the money in the right account, my fault. I can’t believe the payment went through, I never have anywhere near that much money in the account.
I asked nicely if they could do anything with the overdraft fee knowing they can do courtesy credits, and they offered half.
Wow old news is new news.
so he didn’t overdraw his account he just forgot he didn’t have any money – so when the bank paid for it it was out of curiosity….if this idiot makes a story about how we debit his account for terms he agreed to who looks like they are in the wrong the ones who did what they were supposed to and applied it to the account as agreed or the idiot who didn’t keep a register
this is a misleading title and has nothing to do with consumerist. Wow, his bank has overdraft fees and he got one when he bough coffee. That happened when I bought a T shirt last year, why dont I get a consumerist headline?
This happens to thousands of people every day who fail to keep track of their money, instead depending on the bank to do it for them. It’s like an Onion story: “Area Man Bounces Check.”
I thought this would be a funny cartoon, about a receipt and a ton of fees.
Cup of coffee – $3.79
Sales Tax – $.023
Hot product fee – $1.25
Cardboard sleeve fee – $2.85
You know… something funny.
It’s not that simple. We live in Europe and with the exchange rate, we can’t always tell how much something will be. Even when we leave a cushion, the bank comes in, sometimes 5 days after the transaction and charges a ‘rate adjustment’. This last time it allowed 3 charges by debit card- none were overdrafts- and then 5 days after it came back with $5 for EACH CHARGE, taking us down to about $5 balance, THEN they charged the monthly fee. BUT they advance dated the other charges to match the ADJUSTMENT charges so that all 3 of them PLUS the monthly maintenance fee were *each* charged a tidy little overdraft- $96 in total.
I was under the impression that a bank’s maintenance fee can’t be the cause of an overdraft, and I don’t know if that’s what did it, but it was a stinky coincidence and shady in my book.
“he shouldn’t be buying a cup of coffee if he has no money in his account”
I gotta wonder who is over say… 21.. That is bouncing $4 lattes? And if you have that little money in your account why are you buying $4 lattes? Move home.. save up…
@Randy Treibel: “And if you have that little money in your account why are you buying $4 lattes?”
The $4 lattes are why he has so little money in his account! It’s like a snake eating itself.
Coffee made from beans that Kuati Lupaks shit out costs that much…
C’mon Consumerist! I thought this was a site for consumer advocacy, not idiot advocacy?
Yes, when someone can’t do basic math and figure out they have less than $4 in their bank account, yet they insist on using a debit card instead of a credit card, I classify them as an IDIOT.
“Local Bank Screws Man Because he can’t keep track of his account balance and doesn’t read the fine print”
I feel for the guy..I think overdraft fees are another bank ripoff, but on the other hand, if there was no penalty for withdrawing more money than you have, everyone would be doing it all the time!
Of course a bank is going to choose to default overdraft protection to “on”…there’s a lot more money in that then denying a transaction. For the most part, banks are a huge ripoff who pay you almost nothing for the privilege of using your money, but penalize the living crap out of you whenever they can. And bankers wonder why people are angry and bitter toward banks…
This guy should have been watching his money more carefully. That being said, the amounts that banks charge for overdrafts is robbery. I prefer my card to BOUNCE if I don’t have the funds in my account to cover the transaction. I don’t find this embarrassing at all– just annoying. I can deal with being annoyed.
Day one: $5 meal at Wendy’s
Day two: auto-bill pay sends out a payment to my insurance company
Bill hits bank first, isn’t covered – gets an overdraft.
$5 meal hits bank second (even though it was first) triggering another overdraft.
This is ridiculous. If you can’t keep ten dollars in your checking account, you have serious financial problems. I keep money in both checking and savings, but I never let my checking account stay under at absolute minimum $700. Why? So that I never have to worry about overdraft fees.
This guy isn’t a victim at all. He’s an idiot who, like most American consumers, is incapable of keeping track of his finances and making responsible choices.
If he can’t afford to keep a grand in checking at all times, he probably can’t afford to be buying Starbucks (or any other premium/designer beverage) in the first place!
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