Does anyone understand banking practices?

I have an account with direct deposit, and a Visa Debit Card. I was told that the card would allow me to go $100 in the negative and then all further transactions would be spit back out at me. Naturally every negative transaction is subject to a $20 service fee.

OK, the plot thickens. I've set it up so my utilities are automatically deducted from my account. I don't get the notification of this, they just do it. I find out what the amount was a couple of days after the fact, This is for water and sewer only - NOT heating, so the sum is relatively small - $40.oo give or take, more in the summer when I'm using water for my plants. This month (March), I was supposed to be paid $200.00 for some free lance work I did over the net. I had a lot of unexpected expenses this month, so the utilities payment put me in negative $97.00 territory. The next day I got an e-mail from the folks who owed me $200.00 stating that this sum had been electronically deposited to my account.

Goody, $100 ahead of the game! Now here is where I deserve a sound beating - I took their word and didn't check with my bank, going thru automated telephone hell to finally get my balance 10 minutes later. The e-mail verification that I'd been paid was good enough for me. Plus, I figured since my debit card only allows me to go $100 in the red, it would spit out any transaction over that. So I went down to my local ATM, asked for $20.00 quick cash and the machine obligingly spit out a twenty which it shouldn't have if I was $97.00 over drawn. I made various small purchases with the debit card, got quick cash twenties twice more, and today I got a notice from my bank that I am now over $300.00 overdrawn. The outfit had never deposited my $200.00 and the bank just let me go ahead and use the debit card at $20 extra in over draft fees a pop!

I was told by a bank officer that my card would only go to negative $100. Period. So how could the card have kept working? Shouldn't the transactions have been denied? I can't do anything until Monday, but I am very confused and upset. I wouldn't have kept using the card at at a $20 fee for a $1,98 purchase. How can the bank tell me one thing and do another?