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?

[fargon]

Uh Mari, you need to keep trak of your funds. Keryx and I got in trouble, because I made a $25.00 overdraft that after fees and interest over time turned into a $300.00 debt. Use over draft at your own peril.

Love and Kissies fargon

[WabUfvot5]

Now you see part of the reason I never do auto bill pay. I want to authorize everything just in case I need more time or they mischarge me. Banks are just like any other profit motivated entity with a lot of muscle behind it. Everything is setup to make them money. Probably what happens is they update your available balance periodically. So when you pulled the $ out of the ATM it went through because while your balance was really -97$ the numbers hadn't been updated and was reporting something like -50$. I'm sure this has everything to do with a lot of people thinking that if it works they must not be over then get a big bill of overdrafts like you.

I've found the bank always takes money out ASAP but putting money in takes a while to approve. Wonder why that is...

[Beestie]

I understand banking practices. And my wife used to run the web site for a local credit union.

Go to the bank Monday morning with a printed copy of the email from the company that indicated they made the electronic debit and ask them to waive the service charges incurred as a consequence of your reliance on that email. Do not accept no for an answer. Escalate to a supervisor if necessary but remain calm/firm throughout.

You are, in fact, overdrawn but that is not a big deal - contact the company who owes you and let them know the transfer did not occur and the consequences you have suffered as a result of their email. However, your client may have done everything correctly so don't assume they messed up. Once you have determined whether or not they really did transfer the $200, either go back to your bank or request a check.

You didn't indicate an exact timeline for the events otherwise I could provide a more detailed response. But suffice it to say that the bank can (and should) remove any service charges incurred as a result of the misunderstanding.

And, for the love of God, never, ever, allow someone - anyone to have access to your account. As well as I know how all this stuff works (and maybe because of what I know), I STILL send checks in the mail to the utility, mortgage company, etc. Yes, its a pain but I never have problems. I have noticed, though, that a few of my vendors (util companies primarily) are receiving my check then executing a direct transfer from my account to theirs without ever cashing the check. There's not necessarily anything wrong with that but it does mean that the amount of the check will be withdrawn the same business day the check arrives - no more 3-5 day lag.

If you encounter resistance at the bank, just escalate to a manager - the pawns are instructed to take a hard line. The managers reserve the right to be generous to themselves.

[Cyclefrance]

I try to avoid anything that involves a huge penalty like the $20 per transaction charge you have come across.

Your options:

1. Take the time to speak to their help desk - when they can see the way you usually manage the account and that this is an onvious error on your part, you might get them to drop some of the penalty fees - I have managed this a couple of times in the past when I have overshot/missed a payment date on a standard Visa/ Mastercard and the penalty locks in for late payment.

2. Talk to your bank about a reasonable overdraft facility that allows you to go into the 'pink' as opposed to the 'red' - the pink area being at a reasonable amount of interest. Link this to online banking and you should have an easier way to control your balance position.

Don't know if the above either helps or is do-able, in your case, but may be worth a shot.

[xoxoxoBruce]

I have noticed, though, that a few of my vendors (util companies primarily) are receiving my check then executing a direct transfer from my account to theirs without ever cashing the check. There's not necessarily anything wrong with that but it does mean that the amount of the check will be withdrawn the same business day the check arrives - no more 3-5 day lag.

The lag is gone. Under the new banking laws, whether they cash the check or just use the account number to make an electronic transaction,the money moves overnight.
I noticed it when I deposited a check for $18k from a bank in Rhode Island and the money was in my account the next day.
I questioned the bank and they said all transactions are logged throughout the day and all the money moves at midnight, they don't wait for the paper to arrive. I don't know what happens across time zones.

Beestie, the time sequence was from March 17 through March 31. I got the e-mail notification on the 17th that the sum had been deposited. I gave it 24 hours and then got that $20 from my ATM. I knew that my account had been overdrawn the $97.00 because I had gotten notice from my bank that it was when the utility bill went thru. If the check hadn't been deposited to my account, from the information the bank gave me, the withdrawal should not have gone thru. I should have got a transaction denied screen and my card spit back at me.

Paying a $20.00 overdraft fee for a $1.98 purchase is NOT my normal way of doing things. I had been told that the debit card would cease to function at the magic -100 line. Instead, purchases and withdrawals kept going through on it, even at -200 and -300. I found out yesterday when the bank sent me that overdraft notice.

I am really upset with them that they would tell me one thing and do another. I don't see how this is legal on their part. If I am going to get $300 overdawn. At the very least, it would be better to go down and withdraw the entire $300 all at once from the ATM and have the entire $300 to spend with a single $20 overdraft fee, rather than what actually happened. I got to use $100 of that, the other $200 is overdraft charges.

And yeah, since I'm leaving here, anyhow, the other thing I'm going to do Monday is to tell the utilities company that they no longer have my authorization to make automatic withdrawals from my account. They can send my final bill in the mail. In my new place, utilities will be included with the rent. Hopefully, I can find a bank in my new town that has somewhat more reasonable policies. My current bank lied to me and is trying to rake in the profit from its lie re the amount the debit card would let me go into the red.

[Clodfobble]

Does your bank not have the option to check your balance online? It's way faster than using an automated phone system.

Originally Posted by Clodfobble

Does your bank not have the option to check your balance online? It's way faster than using an automated phone system.

In theory, yes. However when I go to check my account online, it refuses to accept my pin number for some reason. I called, went thru telephone hell, got a SEPERATE pin for on-line which STILL didn't work. So, I have to call to find out my balance. Calling to do this involves listening to 4 recorded messages in both Spanish and English and making a sequence of 7 choices. I beleived the outfit that said that they had electronically deposited my pay, and I beleived the bank when it told me the debit card couldn't get overdrawn more than $100. So much for beleif.

[busterb]

I look at my account, at this time once a day. because I have money from insurance co. to fix my house. In case they won’t let me look, you can bet your ass my money will be moved asap. I do most of my bills on line. The only trouble I've had was directv. All most others all direct deduct, only the ones that don't change. No thats not right. The phone, city changes. I don't sign up for direct deduct unless they'll send me a hard copy of bill before.

Originally Posted by busterb

I don't sign up for direct deduct unless they'll send me a hard copy of bill before.

The utilities company told me that they would send me a hard copy before, but they don't. I usually get it after. Oh, this all makes me so mad!

[monster]

Originally Posted by marichiko

I am really upset with them that they would tell me one thing and do another. I don't see how this is legal on their part. .

it isn't.

Call them up, wait until you get to speak to a real person , then explain it. Point out everything you have said here -that you were told a payment to you had been made and were sent a confirmation email (no need to mention who sent the email), you had been told by a member of the bank staff that your card would not let you go beyong your $100 limit (tell them who and when if you have records), that the two combined led to the current situation and that you would have never have knowingly drawn money to cause you to go over your limit and you did everying you could reasonably be expected to to check your information was right. My bet is that if you haven't accrued any such charges before, they'll waive them as by the end of Reason 2.

Cyclefrance, no such thing as pink zone here. Very rare to have any overdraft facility whatsoever. And bank charges are ridiculous. US banking is archaic compared to UK banking. Direct Debit is still pretty new and gets screwed up all the time and has little or no legal consumer protection. There are no such things as check guaratee cardxs -you use your driver's licence and phone #, although that doesn't legally guarantee anything. No-one checks the signatures on credit cards. You need ID to make deposits into your bank accounts, but then you can deposit checks made out to anybody, as long as the have been "signed" on the back by that person.

Nuts.

I miss UK banking, even if it isn't driver-thru and the banks close early.

[xoxoxoBruce]

We can get overdraft protection, however. It's a prearranged line of credit they tap to cover any shortfall. Of course you start paying interest on what they lend you, right away, but it's a lot less than the bounced check charges.

They say my credit is not good enough to get overdraft protection. Apparently, its good enough to run up a $300 deficit with $20 overdraft charges. The US Treasury would be proud of me, I'm sure.

[Beestie]

Originally Posted by Clodfobble

Does your bank not have the option to check your balance online? It's way faster than using an automated phone system.

Online banking is a myth. What you see when you log onto your account is a copy of the actual account data sent to a web server - you are not logging into your actual account. Most "online banking" sites do not include balances - only transactions and the transactions are usually delayed by as long as 3 days.

From what you are telling me Mari here is what I think happened. I think your client really did "send" the money. But, for some reason, the transaction did not go through. I'm guessing that when your bank received notice of the incoming deposit, your permisions were set as though it had actually arrived. But it wasn't for several days afterwards that the bake realised that they hadn't gotten the payment or that the transaction failed. So while the account was credited, the money wasn't there and that is what generated the service charges.

Go to the bak and request an "on-demand" statement and see what it says. From there, figure out what happened. Then, speak to a manager to get the charges reversed.