North Dakota Court Says Bank Can Rob Customer Of $12K In Overdraft Fees

If you live in North Dakota and find yourself buried in overdraft fees, don’t go crying to the state’s Supreme Court. Judges ruled that a bank was within its rights to stick a hog farmer with $12,000 in overdraft charges.

The AP reports the court ruled in favor of a bank that charged a customer with 842 overdraft fees that added up to the total. The bank charges $100 a day for overdraft balances that surpass $10,000. The farmer sued the bank when it tried to foreclose on her property over a $76,000 debt.

ND Supreme Court upholds $12K bank overdraft fee [AP via Yahoo News]
(Thanks, Mark!)

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  1. Alvis says:

    No sympathy – farmer was overdrawn for 842 days.

    • AnonymousCoward says:

      …and somewhere over $10k overdrawn.

    • trey says:

      842 charges not 842 days… i know… it was difficult to see

      • dangerp says:

        That may be the case, but the linked article says that she accrued the fees between 2004 and 2008. That’s still a long history of overdraft. Much different than say, Wells Fargo’s habit of reordering your transactions to stack up on overdrafts.

        As other commenters below have said, a checking account should not be used in the place of a line of credit.

      • Sammich says:

        Not that the truth is any better…. those charges happened within 1583 to 1642 days (best and worst case given dates in the article), though she wasn’t necessarily overdrawn on every single day of that time frame.

  2. c!tizen says:

    North Dakota, #1 at being North of South Dakota.

  3. NeverLetMeDown says:

    “Rob”? Really? The woman was overdrawn four four and a half years, and not by a few bucks, by thousands. She was using her checking account as a (high cost) borrowing facility.

    • shepd says:

      That isn’t uncommon. My bank told me to do that when I applied for a line of credit. LOC was offered at 23% for $5,000. Or I could have $3,000 overdraft without extra fees at 21%. I had perfect credit at the time (and still do), they were just being stupid. The bank manager realized it and just said for me to use my overdraft, since the rates were so stupid.

  4. jvanbrecht says:

    I really have no sympathy for the lady. 800+ overdraft charges, means she did not have sufficient funds to run her business for a significant amount of time. While I feel for her, and all the effort she put into her business, it comes to a point where one needs to pack up and call it quits. The bank also should have closed the account long ago to prevent things from every getting to this point.

    • The Marionette says:

      I agree with you 100% It’s kinda fault on both sides, as you said the bank could’ve stopped it earlier and the farmer could’ve called it quits sooner. But you also have to remember, charging her overdraft will gain the bank more money if she pays those fees. Regardless the farmer should’ve made their budget better so they wouldn’t get an overdraft to begin with.

  5. Beeker26 says:

    There’s a good groaner in here someplace… let me try a few:

    “Bet she’s no longer living high on the hog now”
    “Wonder if she’s still able to bring home the bacon?”
    “I bet the bank is happy as a pig in sh*t”

    • Mike says:

      She cried wee, wee, wee, all the way to bankruptcy.

      Her account was so overdrawn it looked like a financial pigsty.

  6. AK47 - Now with longer screen name! says:

    $12,000 for 842 overdraft fees works out to $14.25 for each overdraft fee. Frankly, it sounds like she got off light given that $29-$39 fees seem to be much more common.

    I’m also confused as to whether the $76,000 debt was an unrelated loan, or if that was the total amount she overdrafted . . . the source article doesn’t have much more info than Phil’s recap here.

    • TuxthePenguin says:

      Effectively its less than that. You’re forgetting interest – not that a checking account can have that happen, but she was in effect using it as a line of credit.

  7. thompson says:

    This one is pretty simple.

    A checking account ≠ a line of credit, so don’t try and use it as one.

  8. Sammich says:

    I certainly don’t feel sorry for the woman for being charged big overdraft fees for that kind of debt for that long. And any sympathy about being sucked down into that kind of debt went out the window when she sued the bank.

  9. emnik says:

    There’s a lot more information here:

    http://www.leagle.com/unsecure/page.htm?shortname=inndco20100921569

    “In addition to Quality Bank’s overdraft fee schedule, the record also contains Cavett’s bank statements, which show she repeatedly overdrew her checking account and incurred substantial overdraft fees. For example, from November 23, 2005 to September 1, 2006, Cavett’s account was overdrawn by more than $10,000, and Quality Bank charged her $100 per day during this period as a result. When Quality Bank filed its complaint against Cavett on November 21, 2008, the bank statements indicated Cavett’s account was overdrawn by more than $75,000 and had been overdrawn since May 27, 2008.”

  10. chaesar says:

    women are so bad with money

  11. prismatist says:

    Bank is in the right, OP is in the wrong, judge sorted it out properly. Moving on…

  12. pridkett says:

    Rob? Seriously? This isn’t robbery. The woman was almost always overdrawn by very significant amounts and for several years she actually paid the overdraft fees. This isn’t robbery, this is sad case of a woman who seriously could not manage her money. Yes, it would be great to see some compassion for the bank on this, but it’s not robbery by any stretch of the imagination. Robbery is when a bank neglects to credit your account for five days on a large check which causes you to overdraft your account, miss payments, your muffler fall off, your wife run away, and the general end of western civilization as we now it.

  13. FilthyHarry says:

    I don’t understand the headline. Why does it say ‘rob’? Are the overdraft fees fraudulent in some way?

  14. FreshPorcupineSalad says:

    Just a typo in the headline…

    “North Dakota Court Says Customer Can’t Rob Bank Of $12K In Overdraft Fees”

    Fixed.

    • ElleAnn says:

      That’s what I was wondering…. Why didn’t the bank close the account and send the negative balance issue to their collections department? They were letting themselves be robbed.

  15. ma1234 says:

    Ugh. Unprofessional articles like this make me wonder why I even read this blog anymore. The bank is right, the woman is wrong. And thank god for that, because I don’t want to pay for the woman’s irresponsibility.

    • DanRydell says:

      Consumerist just needs an easy way to filter out posts by Phil. The best method is often referred to as a pink slip.

      • DanRydell says:

        I guess Phil can’t be solely responsible though, because someone above him must read and approve his articles (though I’ve always wondered how many typos and factual errors get through the editing process)

    • Whtthfgg says:

      Im usually telling the anti-Phil people to pipe down…but this one is bad….I knew it was his before I looked for the tagline or read any comments….it’s just way out there in sensationalist-world

    • qbubbles says:

      Yeah… it’s Phil. Whatchagonnado?

  16. peebozi says:

    i hope the banks was also awarded the interest they lost for this lady causing their deposit balance to decrease! ecery dollar less they have to cover in deposits robs them of 30 they could lend to americans at 2%-78%.

    remember, every $1 in your account can be lent out 30 times at interest rates ranging from 2%-70%. the banks don’t need the overdraft fees but it sure does support their greed levels.

  17. peebozi says:

    There are so many dopes on here. “business right, individual wrong”.

    she paid the fees then sued because the fees were “UNCONSCIONABLE”!

    Please reply to this if you believe these fees were conscionable.

    • Gramin says:

      I’ve got no problem with those fees. They were clearly disclosed to the customer and she paid them for several years without a single complaint. Additionally, a checking account is not a line of credit. While I hate overdraft fees, the consumer has the responsibility to make sure the funds are available when writing a check or swiping a debit card. If you want to use your checking account like a line of credit, then the bank has every right to slap you with a fee. If you want a line of credit, apply for one.

    • Eyeheartpie says:

      Considering the fees actually average out to less than the national average of overdraft fees, I’d say she got off light. Hence, conscionable.

    • craptastico says:

      of course they were conscionable. $15 per overdraft is just about right, and more reasonable than most. what’s unconscionable is overdrafting 842 times. i guess you think the bank’s responsible customers should subsidize this lady’s idiocy?

      • omg says:

        As I understand it, she was charged $100 per days for a stretch of about 300 consecutive days. Dunno about you, but if my bank charged me $100 a day, there’s no way in hell I’d be able to keep a positive balance after one week, let alone 300 days.

        • Conformist138 says:

          They started that charge AFTER she reached $10,000 overdrawn. She was too far down the well for even Lassie to reach at that point. She’s been overdrawn 842 times in 4 years. At best, that averages to a new overdraft charge every 36 hours!! Seriously, why did she not STOP using the card and just get to work paying it off? Work with the bank? SOMETHING?

          No, normally overdraft fees are ridiculous, but this time it was the customer who was beyond retarded. Yeah, I used that word: This woman sounds flat out stupid to the point I suspect mental retardation. I don’t want to eat the pork she was raising, god only knows how well she did that if she can’t tell a checking account from a line of credit.

  18. Holybalheadedchrist! says:

    The bank should have cut her off a lot sooner, but it doesn’t excuse her willful stupidity. For the non-Nodaks out there, Enderlin is going to be a ghost town sometime in the next 6-18 months. The place is crap, 60 miles from Fargo and about 10 years behind the rest of America.

  19. sopmodm14 says:

    i didn’t know ND joined up with arizona as anti-citizen states ? lol, thought it was bad enough here in NY

    • Gramin says:

      Huh? Did you read the post or article? How is this anti-citizen? The bank isn’t in the business of lending free money to people who overdraft their account hundreds of times. You need to learn to read.

  20. perfectly_cromulent says:

    it really doesn’t make a lot of sense why the bank didn’t act sooner. i’m curious which bank this is…

  21. omg says:

    Wait a minute…there was a stretch of approx 300 consecutive days where she was charged $100 per day, that’s $30K right there..

    Exactly how much were the total overdraft charges?

    It sounds like the bank charged her tens of thousands of dollars, and at some point, the fees cascaded: it’s hard to keep a positive balance once your bank has extracted from your balance tens of thousands of dollars in fees, so fees drain your balance, begetting even more fees.

  22. tz says:

    I agree with many of the other commenters – doesn’t consumerist read the articles they link to, or is the omission of significant facts intentional?

    I forget if it is estoppel or some other term that if you don’t act when something wrong happens, you eventually lose your rights, particularly if it is ongoing. If you object to an egregious fee early (and don’t continue to overdraft) then you have standing. If you say nothing for several years, nada. Same with property – if someone uses part of your property as a path, it can create and “easement” and you can’t after years call it trespassing. You can stop them and have them sign an agreement that they have your permission but they recognize it is their property, but do see a lawyer.

  23. StarVapor says:

    Banks…courts…crime…Really, what’s the difference?

  24. StevePierce says:

    A 67 year old farmer wins the Texas lottery and after taxes takes home $42 million.

    Reporter ask him what he and his family are going to do with the money.

    Farmer takes off his hat, scratches his head and says, “I guess we’ll keep farming until the money runs out.”

    • grumpygirl says:

      Exactly. I think that’s the key point most of the commenters are missing – the customer in question is a farmer. It’s normal for farmers to be in a huge amount of debt at least half the year. Right or wrong, I’ll bet this North Dakota farmer went to the North Dakota Supreme Court expecting them to take into account the economic realities of farming in the 21st Century, and judging accordingly. I don’t know if they did that or not, but I would bet that from a farmer’s perspective, the whole case doesn’t seem as ridiculous as it would from the perspective of a non-farmer.

      I’m not a farmer and none of my ancestors have been farmers since arriving in North America, but I am at least aware that the economic realities of farmers are way, way different than the average American or Canadian whose profession isn’t farming.

      If you’re not aware of this, do some research. (And then be grateful you’re not a farmer.)

  25. thesalad says:

    I’d say that this isn’t too bad of a fee, considering Overdraft is pretty much an unsecured loan.
    Lets do some simple math.. Lets say that the acct was overdrawn by 64,000 (76k -12k in fees)
    Lets use a GOOD interest rate for an unsecured loan of 8.5%
    64k *.0825 = 5280, 842days =~2.3 years so 5280 * 2.3= 12,144
    So looks like 12,000 isn’t too outrageous, it’s actually pretty good, because you’d need to be perfect to get an 8.5% unsecured loan, AND you probalby couldn’t get one for 76K

    Also this story makes no sense.. 842 charges of $100 = 84,200 != 12000