Bank Of America Uses Temporary Hold To Trigger Overdraft Fee?
Bank of America got so fee crazy last week that it applied a $10 overdraft fee to Christopher's account even though it wasn't overdrafted. I went back and forth with Christopher to try to figure out what BoA could have done to trigger this, but as you can see from the screen cap below, he only had two debits on the day of the event.
Christopher mentioned that there had been a $4.50 debit that had never posted, so I asked him to elaborate:
The 4.50 never posted and would have been dated before on 10/21 depending on if it had been a legitimate charge. The charge was there on the 21st but cleared without posting (temporary hold due to a broken credit machine). It was dated on the 21st.
So if that charge was not a real charge—it doesn't even show up on the 10/22 section of transactions, as you can see above, and it didn't seem to impact the balance—how again did BoA justify the overdraft?
Christopher says Bank of America won't actually investigate the issue and give him a real answer. Instead, they're just keeping him in a "web support" loop that's growing smaller and smaller:
I also find it highly difficult to continue a thread with them as it is limited to 10,000 characters but each time includes the previous message(s) in an un-editable quote in that 10,000 character limit. So after three messages that is full, and I must start a new thread, which then gets the same chain letters, in order.
Update: Several commenters made good suggestions below. To help Christopher and future readers, I'm highlighting some of them here:
lankysob says this is how BoA's Overdraft Protection works:
When BoA approved the Overdraft Protection (which was tied to my BoA Amex card I set up long ago as backup to save me from paying the stupid $35 O/D fees per transaction), it moved $100 from my Amex to my checking account and considered everything cool. When I called to complain and ask why would an account that has more than $0.00 in it ever need Overdraft Protection, I was told that BoA "goes ahead and determines a dollar amount ABOVE $0.00 based on the credit/debit history of the last few credit/debits applied to your checking account, and then uses that number as it's '0 Point' as to when to kick Overdraft Protection into effect for you." I was, understandably, outraged by this and asked "Ok, well where is this magic number you've chosen for me so I know to treat that as my $0.00 amount?" "We can't/aren't able to give you that information because it's not an exact number that stays the same."
Both Hobart007 and MedicallyNeedy suggest that you go into a local branch and speak to the branch manager in person. If it's a first time issue or you can convince the manager it's BoA's mistake, he or she might waive it.
And trillium points out a helpful feature on the BoA website:
A little known of (I know I didn't know about it ) feature on the B of A website is on the left hand side titled "Available Balance History". Unlike the default view this shows the order of which charges have hit as well as holds on the account.
(Photo: P/\UL)
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Comments:
Thats an awfully low balance available on that debit card.... Not saying the OP is wrong.. but seriously... unless that card has a single purpose and you use it only for things like netflix etc and transfer the exact amount of money into that account as needed, then fine.. but if you are using it for lunches and stuff.. going that low seems like its asking for trouble.
I agree with jvan on this one, that's a awfully low balance, and would easily be prone to these kind of issues with who knows what being held for purchases.
We can end this problem once and for all right now. The answer is simple. Shutdown Bank of America and sell off all the pieces on EBAY.
Bank of America does this all the time, which is why I closed my accounts and will never again give them my patronage.
This is similar to what my account looked like when I banked with Chevy Chase. Nothing ever posts when it should whether it is a deposit or charge. It's impossible to keep up with.
Even with all the highlights and sidenotes added for the article I still can't tell what's going on. Why are there two charges regarding overdraft? And even with the $4.50 there would still be a positive balance, yes?
Hm, the online account is confusing. Tell us, what does the OP's pen and paper check register say?
@jvanbrecht: If by "asking for trouble" you mean "making it easier for your bank to screw you," yep.
I've actually had similar happen with Commerce Bank in Kansas City. Basically, the merchant places the charge "request", and then the actual charge comes through on a separate charge request. The money is supposed to be released before the separate request, but if you are already overdrawn for more, the "money" returns, but in not enough to allow the "real" charge to go through without triggering the next overdraft.
Basically, the "credit autorization" isn't the actual purchase, but can still trigger OD fees.
@jvanbrecht: How exactly is that relevant?
B of A owes him a response to his question--they get away with acting like people are LUCKY to be allowed to keep their money there.
I had something like this happen before. i deposited a check the night before and funds had cleared the same say so i paid some bills.
Even though my balance was positive the bills i paid that same day came out of the old balance and the next day when the deposit actually posted they deducted the funds from my predeposit balance.
This put me over my balance for all of 1 sec before the applied my deposit. Tricky huh? I was able to call and have the free removed.
@jvanbrecht: As soon as I saw the screenshot I knew some dummy would bring up his low balance. It has absolutely nothing to do with the point of the article. If we attached 4 zeros to the end of each of those transactions and balances would it really make any difference at all?
It appears to be a charge for the OP's Overdraft Account kicking over the $8.31. It is quite common, for the bank to charge a fee for noticing that your account is too low to cover the bills and transferring money on your behalf from your Overdraft Account.
So, in essence, it is not an Overdraft Charge for going below $0, but a fee for using the automatic transfer service on the Overdraft Account. This should be explained in BoA's fees and services documentation.
@mm16424: the online doesn't seem to make any sense at all. it looks like he had a balance of 8.99, was then hit with a $10 fee for "overdraft protection fee" to take it below 0? it also looks like the 1.40 "keep the change" caused him some issues. Bank of America is terrible. end of story.
Reminds me of the other week when TD went all nuts. I had 2 OD fees, i asked to have them removed and i was +3 bucks? So math some where was not adding up.
@jvanbrecht: Here's a thought: a lot of us have been unemployed, searching for jobs and have no choice but to have low balances.
@craptastico: My best guess is that the op had several charges pending on the 21st that would have overdrawn the account. Money was xferred to cover the pending charges, which cleared, partially, on the 22nd. He then overdrew thanks to the xfer fee.
I feel the open can expect a slate of charges as more pending items clear, which once again demonstrates the value of writing down one's purchases.
@jvanbrecht: Maybe he keeps track of his balance and only keeps as much as he needs in there, so the rest of his money gets their (pitifully low) interest rate? Or maybe he's just not rich. It doesn't matter.
I've never had a single issue with BOFA but then again I keep enough money in my account to avoid these types of situations.
I'm wondering why he didn't just go down to his local branch and get it taken care of. The ladies at my local branch rock. Some of the nicest people you will ever meet.
That happens to me at BoA occasionally. However, the fees do disappear once the temporary holds are gone. I freaked out the first few times, but I've learned to wait a few days, and things tend to straighten themselves out. Don't know if this guy will be so "lucky", but the bank is rarely helpful until charges and fees have switched from pending to posted.
I don't know...I have my IRAs, my personal checking and my business checking with BoA. I don't get charged fees for anything and I have no problems with them. Maybe it's just me.
The point is not the low balance. Times are tough for a lot of people. The point is that a bank USED to be a place where you safely keep your money, instead of under a mattress. Now, appearantly, I have to struggle to keep my money safe from my bank too?
There is no excuse for not having time-of-transaction based fees. In other words:
I have $100 in my account,
at 9:30am I charge $90 to it
at 12:20pm I deposit $300 (balance=$310)
at 1:00pm I charge $302 (balance=$8).
If my check for $300 does not clear, THEN I am hit with an OD fee/penalty.
As it stands, we all know the scenerio:
I have $100 in my account
the next day I see:
Balance 100
Charge -302 (-198)
OVERDRAFT -35 (-233)
Charge -90 (-323)
OVERDRAFT -35 (-358)
deposit +300 (-58)
OVERDRAWN
ACCT FEE -10 (-68)
Why doesn't everyone (i.e. blame the ops) see how completely wrong that is???
@mm16424: Bank of America's online display resequences. The transactions on a given day will appear in this order as oldest to newest:
1.) Any incoming funds: transfers, direct deposits, overdraft protections
2.) Outgoing funds, from largest to smallest
3.) Pending outgoing funds, from largest to smallest
It's really incredibly frustrating, because you can't actually tell in what real-world order things billed or were deposited. Yes, it means the paycheck is "there" at midnight Thursday/Friday so that the rent check of Friday afternoon gets paid, but if you happen to be putting in a lot of swipes (say, if you're running a big loop of errands on a Saturday), you'll never really know what order you paid in.
Seriously people, can we just start using cash again? Bank accounts should not be used like a wallet.
@NotYou007: The employees at my local branch don't comfortably speak any of the same three languages I do. Makes it really hard to get some stuff taken care of.
@jvanbrecht: His balance isn't the issue. There is a piece of family lore about when my dad bounced a check for around 50grand. Money was supposed to be in the account as a transfer from another account. This was in the days before online backing and debit cards. The check for the upcoming large purchase showed up on time. The bank screwed up something on their end and didn't post it to the right account. Luckily he knew the bank prez who handled it as soon as it was brought to his attention. Things happen to anyone.
I really hate the insinuation that because this guy didn't have a big balance he was somehow at fault for what BoA did.
@jvanbrecht: It's his money. He didn't spend more than he had in the account. Why should it matter if he had $0.68 in the account? He still had a positive balance after his last debit.
Spending all the money in a debit account isn't foolish, as long as you don't try to spend more than you have. If it's asking for trouble to have less than a $1 in it in case the bank makes a mistake, the same logic would also state that anyone with less than $81,400,836,908.01 in their account is being foolish as well. Bank errors happen no matter how much you have in the account, and there is no magic amount of money that would be safe from them.
I had something similar happen to me earlier this year with my BoA account. I've spent most of 2009 (from February until just recently) unemployed, so I've carried ridiculously low balances all year as I've lived off of my unemployment benefits and searched and searched for jobs. At one point, BoA "went ahead and activated" (their words) my Overdraft Protection when I still had $17.24 remaining in my account - while, mind you, an umemployment check was pending clearing at the same time. So, not only was my account $17.24 in the positive, it was also pending a transfer of around $800 from my Maryland Citibank Unemployment Account (I have it set up to automatically transfer 100% of funds to my BoA debit account upon receipt of funds in that one).
Anyways, when BoA approved the Overdraft Protection (which was tied to my BoA Amex card I set up long ago as backup to save me from paying the stupid $35 O/D fees per transaction), it moved $100 from my Amex to my checking account and considered everything cool. When I called to complain and ask why would an account that has more than $0.00 in it ever need Overdraft Protection, I was told that BoA "goes ahead and determines a dollar amount ABOVE $0.00 based on the credit/debit history of the last few credit/debits applied to your checking account, and then uses that number as it's '0 Point' as to when to kick Overdraft Protection into effect for you." I was, understandably, outraged by this and asked "Ok, well where is this magic number you've chosen for me so I know to treat that as my $0.00 amount?" "We can't/aren't able to give you that information because it's not an exact number that stays the same."
Long story short, I caught this "error" immediately thanks to BoA's email notification service that sent me an email as soon as the Overdraft Protection was applied, so I was able to - within the next day or so - move the $100 back to my Amex card to pay off the $100 that BoA so kindly decided to move for me. Thankfully, I was only out at most few cents due to the APR accruing for the time it took to re-transfer the $100 back to my card. The card has since been paid down to $0.
As this was happening, I knew I should have shared this with Consumerist, but had forgotten to write in. So, hopefully this information is useful to other BoA customers.
@jvanbrecht:
So what? I keep an "Allowance Account/Debit Card" that gets a Direct Deposit every paycheck of $200...I use this over a two week period, so I know what my "fun/gas/music/movies" budget is over each two week period. By the next paycheck it is almost always around $20.
The only advice I have is to always use your card/pin, so they can't approve it as credit and you cant get killed on a check clearing. I have had to do the whole "Declined card, lower your head in shame and leave store" bit a few times. I would rather get declined as NSF at the register than get a fee the next day.
@KarbonKopy: Who cares how much he had in there? That's not the point...the point is that what happened to him shouldn't have happened.
@Etoiles: In all fairness, the bank can't always tell "the real world order" either. For example, the bank doesn't know about that rent check until it is presented for payment. The only person who would know is you, the check writer, hence the value of a check register or spreadsheet.
What's more, the order of posting is irrelevent if one spends less than what's in the account, and if one only spend money that has cleared.
@primalsilicon: This happened to me too. I charged a Britrail pass ($300) to my BoA card. That company put an authorization "hold" on it for that amount. That means that if the money is there, the bank will "hold" it as a pending charge until the company asks for its release and actually captures the money.
Well, the timing of the hold release and capturing missed by a few minutes and BoA automatically transferred money to cover what they saw as a potential overdraft. The computer does, it's automatic.
I called, they explained it very nicely and removed the OD charge no questions asked.
/Never had any issues with BoA handling my wierd questions and issue.
@qwickone: We don't see the whole screen, nor do we know any purchaes that are pending. While his balance says $23, he may have racked up $35 in pending charges that simply haven't posted.
@squinko: Imagine the form letter.
I am Mr. Xxxx xxxx from Bank of America.....Western Union.... Firstborn.....
It looks like the OP over spent the money, a pending charge still effects your balance and you need to make sure you have enough money. Just because chance made it so the 3rd charge didn't post the same day as the other two doesn't change the fact that the money wasn't there to spend. If there was a pending deposit you might be able to make a different argument about trying to fix it but there is no info on that. The OP would have probably seen the charge regardless of the day it posted
It appears that it is keep-the-change that did it. 22.73-18.05-4.00 = $0.68 But then $0.68-$0.95 (keep the change) = -$0.27 = Overdraft
Am I having a stroke, or is this article a duplicate of itself...within itself?
Is the surface tension of each dupe just too weak to support each individual post?
Or did you guys at Consumerist create your own LHSC, causing the mass of all the Consumerist dupes to grow so dense as to cause them to coalesce into each-other?
...towards the inevitable CONSUMERIST BLACKHOLE!
I'm guessing that the $4.50 reduced his available balance at the time the 10/22 charges were made, because the money was still being held at that time. They charged him the overdraft fee because his available balance dropped below $0. When the charge was removed it recalculated the ending balance after all subsequent transactions, making it appear that he never went below $0. Doesn't change the fact that at the point the transactions were made his available balance presumably dipped below $0. Usually if this is a first offense a friendly CSR will remove the overdraft fee... but times are changing I guess.
@mm16424: Since the false charge was from a broken machine the OP wouldn't have put the charge in a "pen and paper check register". Looks like you're blaming the OP for living in the 21st century. Either way your point is moot since the OP wants an explanation.
@Scuba Steve: Cash doesn't have fraud protection.
And most importantly, Mint doesn't support my wallet.
@Cant_stop_the_rock: This is probably what happened. He got hit with the overdraft because a merchant made a mistake. They corrected their mistake, but their mistake cost him $10.
Time to leave BOA, pronto.
@AJ_Syrinx: I know. I couldn't believe it when she told me, either. It took all I had to calmly (and as un-sarcastically as possible) ask about what my 'actual 0 point' might be. Unbelievable.
And thanks! Though, I'm not fully employed yet, the contract work I'm doing is still better than sitting around at home sending out resumes.
Honestly I'm not surprised at all. This sort of activity is not uncommon with Bank of America, which is why I no longer bank there or continue to use my BoA credit cards.