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Tuesday, June 19, 2007

bank overdrafts pending transactions scams fees

I think the title about covers it all. Let me make it clear, I hate banks. 20 years of having checking accounts and I can't stand them. Here is why. Banks are not out there to just hold your money, they are out to make billions off your money. The average American today lives paycheck to paycheck. I don't care what you make. Banks pray on this. They play the odds they know that work.

- ATM Fees
- overdraft fees
- transaction fees
- check sorting

All of the above are what the banks consider just gravy on top of what they already make on your money in terms of investments. If the banks couldn't make a large amount of gain off of all the money they hold for you, they wouldn't bother. (Don't believe me, look at corporate pension funds? Gone they cant make the money and can't afford the loss) Some of you probably ask, "you wouldn't have this problem is you just balance your checkbook." and I would agree with you. Except again, banks play the odds and the odds are the majority of people don't carry checkbooks. Find me how many restaurants today even take a check. Ever write a check at a gas station and see the dirty looks you get. So for right now lets play upon reality and being that the banks know you're going to use your check card.

Right now, every bank out there could turn your "debit" card into a full fledged credit card with a preset limit and every transaction would clear right away out of your bank at the MOMENT you made the transaction. No overdrafts! GONE! Tell me a normal credit card company that pends a transaction much less bother sorting one. Even a debit transaction comes right out of your bank right away. Well sorta, lets talk about that in a minute because that's a farce too. The banks don't want your "debit" card to act as a credit card. They gamble on you to overdraft your account. They would loose billions in revenue every year without it.

Overdraft fees. Every year they get worse. My bank, Wells Fargo, is now up to $35 for an overdraft fee per transaction. you overdraft by so much as 5 cents they will charge you $35. The system that does this for banks is automated. The software and accounting for overhead has LOOONG been paid for. Its gravy and costs the banks practically nothing to do. Its now an extra electron on the screen.

Check sorting - One of my biggest gripes is every bank check sorts. What is check sorting? let me explain.

Say your bank account has $100 in it on Friday and they state that you can shop the whole weekend but they wont update your pending transactions till Tuesday morning. This is what Wells Fargo does. You will show the pending transactions, (on and off) throughout the weekend online. They will even show them in the manner in which you made the charges. Now look below at your weekends transactions...

Friday - Coffee $2
Friday - dinner $12
Saturday - new shirt $5
Saturday - Ice cream $1.23
Saturday - new radio $32.00
Sunday - new tires $64

You understand looking at the end of the day you made one transaction too many. Or did you?
How much did you overdraft and at what point? the one overdraft right? The $64 right? You over drafted on one transaction at $64 so a $35 is feed one time right? Even on Sunday the bank shows you the account in the way in which you made them throughout the day which you assume to be correct.


Come Tuesday all of those pending transaction are sorted from largest to smallest by your bank. Its call check sorting. Banks do it on purpose. They yell you that they are working on YOUR best interest by clearing you biggest transactions first. THAT'S CRAP!

What you end up with ...

$100 in account

- $64 = $36
- $32 = $3
- $12 = - $9 (plus a $35 fee)
- $5 = -$14 (plus another $35 fee)
- $2 = -$16 (plus another $35 fee)
- $1.23 -$17.23 (Another overdraft fee again $35)

You have just now accrued $140 for one overdraft mistake you made on Sunday. Again you might say, well its your fault for not keeping track. I have to disagree, since when does the bank have the right to take your money and play games. Check sorting should be illegal but its not. Every bank does this.

My bank told me, if you want to make sure the money is removed right away then you should use debit. Again, they lied because both Wells Fargo and Bank of America sort debit transactions as well. I have seen my bank take a debit removal out of my ATM where the money no longer existed and sort it ahead of another transaction that didn't exist when I had removed the funds. They play the transaction to suit there needs.

Deposits - The bank tells you your deposits clear before transactions. However my payroll, which is direct deposit the 15th and 30th of every month, hits a 2 .am on those days. Guess what, my bank first tells me they don't control direct deposits but yet my payroll department says they are lying and they have the money from my job 3-5 days in advance and they ARE indeed in control of when the deposit hits. So again, my bank lies to me.

So my point. Banks are there to gamble and they only play the odds that win. I wouldn't even care so much about the overdrafts if it wasn't for the check and transaction sorting. You miss one check or transaction and if its big enough they can hit you against a ton of smaller ones that you already know about. STOP CHECK SORTING !

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posted by Jules at 8:57 AM


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